So.. what's your PROFIT ??? [Archive] - Canon Digital Photography Forums

italianfemmy

29th of June 2007 (Fri), 04:03

I know this will vary from person to person. But... I was thinking.. some people offer so many things in their packages.

So, what's your profit? Not accounting for hourly wage.. just your total amount you make over what you spend.

Example:

Cost to bride and groom $2,000.00

Cost to provide prints, proof book, etc. to bride and groom $500.00

Profit: $1,500.00

th3r0m

29th of June 2007 (Fri), 05:22

I don't know that you are going to get anyone to post their individual profit/mark-up on the forum because it is open to the public (and gives quite a bit of insight into the prices photographers pay for albums, prints, etc). Personally, I typically mark up 100-200% depending on the product. In the beginning of your business however, you have to remember that while you may be making quite a bit, probably very little of it is going to be profit due to the CODB (start-up costs, equipment, etc). Profit wise I usually average in the area of 20-30% .

GilesGuthrie

29th of June 2007 (Fri), 05:31

That's not profit. That's the labour cost. Do you have an idea of what your time is worth? For example, if you're paid $50/hr at a full-time job, your free time is worth around $70/hr. Therefore every hour you spend on the job costs $70. (Think of this as being the cost to you of not lounging around with your friends having fun).

So, if you spend 6hrs at the venue, then 6hrs post-processing, plus the before & after meetings (1hr each), and the time of sourcing the book and building it (say, 2hrs), your time is 16hrs. At $70/hr, this is $1,120. So the costs total $1,620, and the profit is therefore $380.

Except we haven't considered the rolling cost of gear, where you take the cost, and write it off over the replacement cycle (3 years for camera bodies, plus all computer equipment; more for lenses), or the costs of property, utilities, marketing, tax etc.

When I quote people for jobs in my field of expertise, they never understand why the labour charge is so high: it's because I'm doing their work out of hours, in my leisure time. And my leisure time is extremely scarce and therefore expensive to buy.

Before thinking of the cost to the client, sit at your desk, with your gear, and work out all of the costs to you.

walkabout

29th of June 2007 (Fri), 06:42

having just started this year, I work at hour rates likely to be found in third world countries.:rolleyes:
It is diffecult to compare however, when we see prices in USA, we cannot believe our eyes.
You must also considere the clients pays what he wants to pay. If you charge like 100000 $ and your client pays, nice. If you charge 10$ and you're happy, nice.
I think we don't have many investments to make, not like a dentist or such, so setting up business is quite easy. But what we earn this year will not getting us rich, just pays the bills

GertS

29th of June 2007 (Fri), 06:43

What about taxes & insurance? They didn't turn up in your "calcualation".

MDJAK

29th of June 2007 (Fri), 08:44

Profit? What's a profit. Every time I do a wedding, a buy another piece of equipment. I'm in the red.

mark

tim

29th of June 2007 (Fri), 10:13

I doubt many people here know their true profit. I have the report from my accountant from the last financial year, and I can divide it by the number of weddings I did, but i'm not going to share it. Don't forget to take into account equipment purchases and maintenance, accountant, stationary, PC, sample albums, dud prints, delivery/couriers, etc, etc, etc. I think good photographers can expect to be in the black after their third year or so, if they're lucky.

getabetterpic

29th of June 2007 (Fri), 10:29

I've got a related question. What do you guys assume when looking at useful life of your equipment? I guess I could take the projected shutter count on my camera and divide that by the average number of pictures usually taken at a wedding multiplied by how many weddings I do, but that's going to give me a really high number (quick calculation gives me something in the range of 15 years). This doesn't take into account the advances in technology, making it obsolete.

So what do you guys use as approximations? I know GilesGuthrie mentioned 3 years for cameras. What about everyone else?

tim

29th of June 2007 (Fri), 10:32

Lenses, CF cards, flashes : forever.
Bodies : 3 years.

I dunno how anyone can expect to make their entire living in wedding photography, it's a really tough business to be in.

tlc

29th of June 2007 (Fri), 10:51

Lenses, CF cards, flashes : forever.
Bodies : 3 years.

I dunno how anyone can expect to make their entire living in wedding photography, it's a really tough business to be in.

i see david jay, becker, jessica claire, and the others who do nothing but this and i have to wonder... is it location? the stuff these people put out is absolutely beautiful and breathtaking, but... would it still be as breathtaking if they were located say, in cedar rapids iowa or johnstown pennsylvania???

tim

29th of June 2007 (Fri), 11:01

I recently saw images from a wedding taken by a prominent aussie photographer (not yervant) taken in Italy recently, on another forum. He got all kinds of wow replies, the images were good but I regularly see better images on here from Jamie, Toogy, and Lloyd, among others. Settings make a difference, but don't make a wedding. How the couple is together and how they interact with the photographer makes the biggest difference IMHO.

Ronald S. Jr.

29th of June 2007 (Fri), 11:08

How much profit? Well, it's a poor-ish area, so people usually go for my lowest package, which is $1000. Prints will cost me about $200, and consumable supplies will run me probably $50, so $750. Not bad for a few hours work, but not that great, either. I couldn't make a living out of my wedding shooting.

radiohead

29th of June 2007 (Fri), 11:17

I think good photographers can expect to be in the black after their third year or so, if they're lucky.

Sounds about right to me.

I dunno how anyone can expect to make their entire living in wedding photography, it's a really tough business to be in.

Agreed - and it's getting tougher.

liza

29th of June 2007 (Fri), 11:24

tlc

29th of June 2007 (Fri), 11:40

You should be in the black by the third year and well established by year five. There are a lot of expenses other than camera equipment and print costs that people don't consider when starting out, including taxes (set aside about 30%), insurance, advertising, employee wages, rent, utilities, office furniture and supplies, computers, software...

Get the picture? :)

its very frustrating. hard work and dedication is the only way you will make it. i think that is what 'weeds' out a lot of the people who are picking up a dslr and expecting to be buissink over night. they play at it for about a year and then the novelty wears off and reality sets in - costs of insurance, advertising, supplies, etc.

liza

29th of June 2007 (Fri), 12:03

its very frustrating. hard work and dedication is the only way you will make it. i think that is what 'weeds' out a lot of the people who are picking up a dslr and expecting to be buissink over night. they play at it for about a year and then the novelty wears off and reality sets in - costs of insurance, advertising, supplies, etc.

I think you've hit the nail on the head. In the fall, which is my busiest time, I average four hours sleep per night seven days a week. I have to work a full time job 9 months per year and another part time job just to stay afloat. I'm also looking at replacing two camera bodies, adding a 70-200 f/2.8IS, acquiring studio equipment, and building a small (20'x30') studio on my property by the end of next year. Sometimes it seems like I'll never get out of the red. :cry:

Tish

29th of June 2007 (Fri), 12:48

In the US, you can count on taking 50% off the top for self employment taxes (both federal & state, for most states), income tax, local operating taxes, etc. You can't just assume that "well I'm only in the 15% bracket, it won't be that much" as your employer currently pays half of your Social Security tax. As a self employed person, you'll pay all of it yourself. In my county, you also pay two other taxes an employed individual doesn't--a business & operating tax, and a personal property tax on ALL assets used in the business--never mind whether they were gifts, whether they were originally purchased for personal use & converted to business use, or that you've already paid sales tax on them!

In my area, I've been advised that when all is said & done, I need to be taking in about 2.5x what I currently make in my day job in order to cover that income. And of course, it's not just the salary amount I have to replace, but the benefits--insurance, 401K, etc.

Some days I think it's doable, some I think I must be insane for even thinking about it.

Atl-Fotos

29th of June 2007 (Fri), 13:08

To agree with Tim I am in my 3rd yr, but I am married so....... there is no profit.......:lol:

italianfemmy

29th of June 2007 (Fri), 13:23

Well... I understand that there are other expenses. But, do those of you who run your business from your home instead of a studio still pay all the same expenses? Aren't there a ton of things that you can write off to get out of paying high dollars in taxes?

And, I didn't include labor time because it is obvious to me that you have to spend the hours but so does anyone. To me, as a business owner, starting out and expected to run yourself in the ground, profit is the difference between what I spend for products and what I make for services. Because all of the difference would come back to me since I don't have any "employees."

liza

29th of June 2007 (Fri), 14:03

I do run my business from my home. You still have to pay taxes. And you have to be very careful deducting a part of your home as a "home office." That's an extremely audit-prone deduction. It isn't as simple as you think.

sapearl

29th of June 2007 (Fri), 14:16

I'd say there are a few POUNDS I regularly have written off as opposed to TONS. My tax guy gives me excellent advice and always warns me about certain things people try to deduct and shouldn't. That only puts up a flag and gets the IRS's attention :cry: .

I know what I end up with in the plus column at the end of the year - and there always is SOME amount of profit (certainly not enough to take care of a house and family) but I couldn't tell you exactly what my profit is.

Many of those deductions are calculated based upon the square footage of our home office. It represents xx% of the entire house's footage. So, my accountant applies that percentage to utilities, repairs, etc.... and all this gets put on Schedule C of my Fed tax return. So that chops it down even further.

But to answer your question, home businesses really don't have exactly the same kinds of expenses as the brick and mortar places. And anybody who deducts a TON of (questionable) things is living dangerously. There is no easy solution. Businesses are expensive to run and demand long hours when you are your own boss.

And all of this is why there are so many wedding photographers who do so as a SECOND job - we couldn't afford to exist and survive otherwise. Quite frankly, with prices coming down from traditional higher end packages I see this getting even more difficult.

Well... I understand that there are other expenses. But, do those of you who run your business from your home instead of a studio still pay all the same expenses? Aren't there a ton of things that you can write off to get out of paying high dollars in taxes?

And, I didn't include labor time because it is obvious to me that you have to spend the hours but so does anyone. To me, as a business owner, starting out and expected to run yourself in the ground, profit is the difference between what I spend for products and what I make for services. Because all of the difference would come back to me since I don't have any "employees."

howzitboy

30th of June 2007 (Sat), 03:06

I've got a related question. What do you guys assume when looking at useful life of your equipment? I guess I could take the projected shutter count on my camera and divide that by the average number of pictures usually taken at a wedding multiplied by how many weddings I do, but that's going to give me a really high number (quick calculation gives me something in the range of 15 years).

some of our photographers got about 100,000 activations in ONE YEAR on their new canon bodies!
lol i dont think theirs will last 15yrs.

dont forget wear and tear on your car too!

mizuno

30th of June 2007 (Sat), 04:28

i see david jay, becker, jessica claire, and the others who do nothing but this and i have to wonder... is it location?
Those two are not great examples as both of them have income streams apart from shooting weddings.

DJ sells software, Jessica sells bags and I think both have done seminars at some point.

tlc

30th of June 2007 (Sat), 04:57

Those two are not great examples as both of them have income streams apart from shooting weddings.

DJ sells software, Jessica sells bags and I think both have done seminars at some point.

oh, i know, but the marketing of their sidelines didnt come in to play until some time later in their career. jessica only just started selling shoot sacs, but before that, she devoted pretty much full time to weddings, engagements, etc. i just dont see jessica claire being the name she is today, had she been located in boise, idaho, if you get my drift.

my point is, is it safe to say that none of the big named wedding photographers of today came from poe-dunk locations?

sapearl

30th of June 2007 (Sat), 08:43

That's really a hard question to answer, but I tend not to agree with it. In all honesty, who's to say where brilliant creativity and talent can arise? I think it can come from anywhere.

Some seem to think that gorgeous venues and beautiful backgrounds are critical to creating standout wedding work. That's not true. It's very possible with the proper posing techniques, the right camera angle and "shooting crop" and the manner in which you relate to your subject, to produce stand-out work in even the most average of locales. That's the mark of a really talented individual. And as Tim pointed out earlier, we see many examples of that right here in the forum.

.....my point is, is it safe to say that none of the big named wedding photographers of today came from poe-dunk locations?

-Pleiades-

30th of June 2007 (Sat), 08:51

I can't believe how hard it seems to be to run a small business in the US. The government must make it really difficult?

I've run my own (non-photography related) business and if anything the government in regards to a lot of things (including taxes) are a lot kinder to small businesses.

How do you all survive!

sapearl

30th of June 2007 (Sat), 08:58

Always good to hear a success story :D - thanks for sharing.

How do we survive? Well, as many of have said, in a lot of cases or regular 8-5 job M-F "subsidizes" or photography business. I fit into that category. Some of us are married to spouses or have partners wit well paying jobs and good medical coverage. And for most it is just really tough work with not too many vacations to Tahiti :lol: .

Cost of living is also a consideration. Some parts of the U.S. are really expensive to live in, while other areas are much more reasonable. In my area housing is quite affordable compared to say New York, D.C. or LA, but the local economy is fairly depressed so I have to scramble to compete with the modest business out there.

I can't believe how hard it seems to be to run a small business in the US. The government must make it really difficult?

I've run my own (non-photography related) business and if anything the government in regards to a lot of things (including taxes) are a lot kinder to small businesses.

How do you all survive!

mmahoney

30th of June 2007 (Sat), 17:13

I don't comment on my business income or profit in online forums but I will make the quick observation based on some of the posts I've seen .. get an accountant, and quick !!!!

jbstudios

30th of June 2007 (Sat), 19:32

i so agree you need an accountant. listen to them they know your area and are trained in it. You also need to get a very good look into the business side. i am always loosing money =) so not by choice, but i always forget to factor in the cost of equipment, my time editing, etc. i always do for the hours i am there but never at home. every year i raise my prices and i still need more. we cant decide this for you and every area is different. look into what your goal is to make an hour, every hour. figure out how long the average shoot is, the hours you are there and the hours you do at home. your equipment. this is why an accountant would help do you have a clue of how much you are spending? the cost of marketing, brochures, the way you package the end product etc. you have so many things to consider and each area is so different, this is something that is different for everyone. i still dont have it right =)

julie b

italianfemmy

30th of June 2007 (Sat), 19:46

Yet having an accountant isn't free, so that dips even further into profits, right? My pla is to take some part time business classes actually. I think that will be best.

tim

30th of June 2007 (Sat), 21:31

came from poe-dunk locations?

The guys in tri-coast photogarphy come from small towns. On page 2-3 of this thread (http://photography-on-the.net/forum/showthread.php?t=339491) Mike spells it out. These guys are among the best in the wedding business.

jbstudios

30th of June 2007 (Sat), 23:36

taking business classes i believe wont get you anywhere near what an educated accountant will advice you with. i dont even pay 300.00 a year and he does all our personal stuff too. its really not that expensive and its not as much as i thought it would be. we used to pay over 100.00 so for me its worth the extra couple hundred. its worth the nights sleep i get knowing if i get audited i will be o.k. everything is extra money. i think thats what everyone is saying. its not as easy to start up a business. its so many more hours than 40, i thought the same thing in the beginning thats why i started when my kids were so small. hello its a ton of work =)

julie b

tim

1st of July 2007 (Sun), 00:31

My accountant cost me about US$1000 for the past year, but they're still worth it... just. I told them they're too expensive so we're starting to use www.xero.com (in beta) to automate stuff and have me do some of the grunt work.

mmahoney

1st of July 2007 (Sun), 08:18

LOL .. can you imagine this question on an accountants forum:

Hi .. I'm new here and looking for some advice. My cousin is doing her tax return this weekend but is a little short on cash and has asked me to do her return. I've never done a business tax return before but did math in high school and can read my monthly bank statements. Plus a month ago I had to do a pizza delivery to an accountants office and spent some time chatting to the receptionist .. learned a lot in a very short time.

I know that equipment is the most important part of doing taxes, and I have a new caculator, some very sharp #10 pencils, and several sheets of 8X10 paper, along with a desk and a 40 watt lamp. Do you think the #10 pencils are good enough? .. I know that the #12 pencils are a little more expensive .. are they worth it? .. Is 40 watts enough for the desk lamp? .. I can borrow an 80 watt lamp if needed. Maybe even have it as a backup.

How should I dress? .. I'm thinking just a light blue simple button down collar shirt with grey slacks? .. is the button down shirt too modern? .. maybe try a regular collar with a tie? Is a jacket needed? .. I know that how you look is the second most important part of doing taxes (next to the equipment) so I want to get it right.

I know what an important day your audit can be so I really want to be ready .. is there a FAQ anywhere here I can read? .. anyone have any advice before the big day? ... I'm soooo excited.

PS. .. I'll post copies of the return for critique when completed.
Thanks,
Billy

tlc

1st of July 2007 (Sun), 08:40

Yet having an accountant isn't free, so that dips even further into profits, right? My pla is to take some part time business classes actually. I think that will be best.

yep and you'll be headed towards bankruptcy in no time, or, reporting for your audit soon enough! :p

sapearl

1st of July 2007 (Sun), 13:11

Sure it dips into your profits... professional advice from people who REALLY know what they are talking about does not come cheap. But far better to spend wise dollars upfront now, than to make uninformed costly mistakes later on that could cost you thousands, or get you into trouble with the Feds.

We all can give you professional photographic advice and tips and are happy to do so as long as the questions are reasonable. But unless there is a CPA among us, we CANNOT give you the truly professional accounting advice that you really need to do this properly. Classes are fine as a supplement, but they are no replacement for a pro in the field who really knows what he's doing. You need to understand that.

Yet having an accountant isn't free, so that dips even further into profits, right? My pla is to take some part time business classes actually. I think that will be best.

sapearl

1st of July 2007 (Sun), 13:17

Julie makes a wise and excellent point here. It does not have to cost a lot of money to have this taken care of. Our tax guy does it for the entire family... my kids taxes, wife, my regualar job, etc. I figure the portion of time he spends on my photography business is no more $150/yr. I hand him my spreadsheet and receipts, we sit down together for a few hours, and bingo it's done. This also includes a few phone calls during the year.

There's nothing wrong with taking a class to give you some background info. But the close won't set up your business, fill out your business or advise you on properly filing sales tax.

taking business classes i believe wont get you anywhere near what an educated accountant will advice you with. i dont even pay 300.00 a year and he does all our personal stuff too. its really not that expensive and its not as much as i thought it would be. we used to pay over 100.00 so for me its worth the extra couple hundred. .....

italianfemmy

1st of July 2007 (Sun), 13:51

Well, I had no idea it was that inexpensive. I would have thought wayyyyyyy more than that. There's no stupid questions. This just goes to show that. Now, I have learned something very valuable and will be more successful because of it. As for people sharing the dollar amount they pay their accountant, I never asked for that but I appreciate it as it made me more informed.

sapearl

1st of July 2007 (Sun), 13:57

See, even though some of us disagree and may even be disagreeable at times in our irritation - guilty as charged :rolleyes: - we still want to help. Getting an accountant does not have to be that expensive. Likely I get a deal because I give him other business, but he is still reasonable considering the level of service I receive.

Well, I had no idea it was that inexpensive. I would have thought wayyyyyyy more than that. There's no stupid questions. This just goes to show that. Now, I have learned something very valuable and will be more successful because of it. .........

LeesaB

1st of July 2007 (Sun), 14:38

Again, i will reply with this the same way I did in the other similar thread..

Contact your local collage...ask about a small business advisor...You may have to contact several...you WILL have to go sit in on a short 4 or 5 hour seminar and you will get a packet with ALL THIS INFO IN IT...he will become your personal guide to assist you and help you...from that day forth, by appointment...he will tell you what you do need, what you don't, how much it will cost...how much it should cost.

These are government positions that are paid by grants and therefore are located in almost every city...I live in a small town, we have one here, and he helped us in starting our business and gave us GREAT leads and assitance

SO...one more time...call a few local colleges...call the local BBB, call around, find these guys, go to a seminar and learn way more then any of us can help you for your local.