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Author Topic: Cost of doing business  (Read 18000 times)
Yelhsa
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« Reply #20 on: August 17, 2013, 01:34:16 AM »
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BTW, does it take TIME to produce images?  
Yes - it even takes TIME to produce images (Art, Literature & Music too) which no one wants to use too - which is one of the many reasons why it's not about 'your time'.

Produce images (Art, Literature & Music too) which others want to use a lot, by using your time wisely, and charge for the use of your images (Art, Literature & Music too) is therefore what most of the professional associations around the world would recommend you do.

It's just a suggestion - because at the end of the day, it's totally up to you to run your business as you see fit.
« Last Edit: August 17, 2013, 01:35:49 AM by Yelhsa » Logged

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« Reply #21 on: August 17, 2013, 08:31:06 AM »
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Yes - it even takes TIME to produce images (Art, Literature & Music too) which no one wants to use too - which is one of the many reasons why it's not about 'your time'.

Produce images (Art, Literature & Music too) which others want to use a lot, by using your time wisely, and charge for the use of your images (Art, Literature & Music too) is therefore what most of the professional associations around the world would recommend you do.

It's just a suggestion - because at the end of the day, it's totally up to you to run your business as you see fit.

The problem Ashley, is that no two photographic business models are the same.  One size does not fit all.

But one thing is certain, producing images, no matter how you choose to bill for them, requires TIME.

And despite your objections you DO sell your time, and the time of your crew.  Productions cost money.  You simply package those costs and bill them in a different manner.

So yes, its totally up to you to run your business as you see fit....

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Yelhsa
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« Reply #22 on: August 17, 2013, 11:41:44 AM »
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And despite your objections you DO sell your time, and the time of your crew.
You are right - obviously one needs to take one's basic production costs into account, before you begin to negotiate the fee for the use of your images.
But as you can see...


.. the only 'time' that they are being asking to pay for, is the time period or 'Period of use'.
« Last Edit: August 17, 2013, 12:35:47 PM by Yelhsa » Logged

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« Reply #23 on: August 17, 2013, 12:56:31 PM »
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Hi All,

I have to second Yelsha here.

The only time I didn't do a license for a shoot was over 15 years ago. I worked for a relative charged a competitive rate and heard a lot of bi_ching and complaining about it before getting paid six months later.

The problem was that I didn't license the images as it was a relative. Guess what he used/uses and want to continue to use the photos for the packaging of his very successful ice cream product. I think I got scr_wed on that one. Totally. First and last time I ever shot Ice Cream too.

Live and learn...
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Craig Lamson
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« Reply #24 on: August 17, 2013, 06:09:43 PM »
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Hi All,

I have to second Yelsha here.

The only time I didn't do a license for a shoot was over 15 years ago. I worked for a relative charged a competitive rate and heard a lot of bi_ching and complaining about it before getting paid six months later.

The problem was that I didn't license the images as it was a relative. Guess what he used/uses and want to continue to use the photos for the packaging of his very successful ice cream product. I think I got scr_wed on that one. Totally. First and last time I ever shot Ice Cream too.

Live and learn...

Again, very different client and business model.  If an image only has a shelf life of one yer ( its model year stuff, and all theimages are junk when the new models roll around, what good is a "license?
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« Reply #25 on: August 17, 2013, 06:15:06 PM »
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You are right - obviously one needs to take one's basic production costs into account, before you begin to negotiate the fee for the use of your images.
But as you can see...


.. the only 'time' that they are being asking to pay for, is the time period or 'Period of use'.



It's semantics.  You are still billing for your production time, all wrapped up in the "period of use" verbage.

Or maybe you are losing your shirt when you over produce and the client does not buy enough "period of use".

You won't know unless you know the CODB, which includes TIME.


Which if you remember correctly was the entire point of the OP.







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leeonmaui
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« Reply #26 on: August 17, 2013, 07:05:57 PM »
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aloha,

A Pentax 645 35mm FA 3.5 is 1200 to 2000 dollars, that's a really nice lens, its not $5000
I spent a hell of a long time shooting with one body and two lens, and only built a "dream system" when I could afford it. My camera and lens expenses for the past two years is a whopping 0 dollars!
(Ok  i had a little dslr converted to IR so $380, but that was a want not a need :-))

your going to need to turn lots of money prior to getting to 70k profit on your "taxable income" side.
and I'm just saying there are many ways to structure the way you manage your money.

Telling a person there are costs that they need to consider is reasonable and prudent, assigning that persons cost of living to that persons cost of doing business makes sense. Assigning anything over his cost of living does not make sense, and in the context of starting a new business is not very reasonable.

I have shot about 20 days this year, it works for me, But I sell my stuff to collectors not clients.
I don't know what would constitute a good year for a wedding, portrait, fashion, travel, real estate photographer, certainly plugging in simple numbers of cost verses income is reasonable and will give you a general idea of how many widgets you'll need to sell to keep the doors open.
It is brilliant advise to at least show someone what the could be in for!

I continually look at only three numbers in my business now; costs, daily average and trend.
Then I work on plan or change what I am doing to improve those. My business model now looks very different than when i first started, the goals are about the same, but the way I will get to them has matured.   

There intangibles at work in any business, which you are not paid for directly, and these can have great value. Every day you are in business you are building this value!

In reviewing the information, I see less than $1000 dollars slated for promotion. Perhaps shifting the 10,000 dollars invested in extra camera gear to to promotion would have greater benefits?
Again trying to give advise to a new business from your more mature perspective, doesn't always work. 

It is entirely commendable to show someone there are things they need to consider but, I don't thing its a one size fits all by any means and what works for you now and what you need now is most likely much different from what you needed when you first started; Steve Jobs probably couldn't move back to the garage where he first started Apple for instance, but telling the next Steve jobs, it can't be done from a garage is not necessarily true or helpful either.
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Yelhsa
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« Reply #27 on: August 18, 2013, 11:50:25 AM »
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It's semantics.  You are still billing for your production time, all wrapped up in the "period of use" verbage.
So if I produce a set of images and it costs me 1000 to produce them - and 6 different Editors want to use them, for a one time only editorial feature in each of their magazines - over a 5 or 6 year period - how does that work then ?

And if 3 of them are national magazines and the other 3 are just local magazines, how does that work ?

And what if a national company also wanted to use 3 of the images for their magazine ads, brochures and on their website too, for the next 3 years - how does that work ?

Or is that just semantics too - as they will all understand what I mean, no matter what words I use ??
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Craig Lamson
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« Reply #28 on: August 18, 2013, 05:24:10 PM »
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So if I produce a set of images and it costs me 1000 to produce them - and 6 different Editors want to use them, for a one time only editorial feature in each of their magazines - over a 5 or 6 year period - how does that work then ?

And if 3 of them are national magazines and the other 3 are just local magazines, how does that work ?

And what if a national company also wanted to use 3 of the images for their magazine ads, brochures and on their website too, for the next 3 years - how does that work ?

Or is that just semantics too - as they will all understand what I mean, no matter what words I use ??

You STILL build your time in the equation, and yes if you sell them more than once you do indeed make more and it amortizes the cost of your TIME downward.

Regardless you need to know the cost of your TIME when you price that first set of images, and you never know what will sell and h ow many times.

You shoot stock. I shoot model year products.  Your model will not fit mine and mine will not fit yours.  HOWEVER both of us really do bill for our time, its just packaged. 

BTW, I don't shoot day rate, I shoot flat rate,...a specific kind of photo costs x...plus I also bill for production costs like styling and files. But without knowing what my photo and post times COST I can't arrive at a profitable 'X' cost.  Not to mention I do have others competition for the same clients and projects so pricing must be competitive, at least on an apples to apples level. Just one more reason that CODB knowledge.

And  the industry I work in cashed to the ground in 2008.  Massive. When it started to come back the clients simply would not pay pre 2008 rates.  In fact rates were slashed in half, and it you did not compete you got now work.  Once again KNOWING the CODB...or more to the point , what COBD would allow me to continue to work, was what allowed me to create a new business model and succeed, and in fact see an big increase in net, on half the rate.  My TIME was a huge component.

Bottom line, it is just semantics.  You just package your time and it gets amortized differently based on sales.  Rationalize it anyway you like.



 

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David Eichler
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« Reply #29 on: August 18, 2013, 11:29:52 PM »
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You STILL build your time in the equation, and yes if you sell them more than once you do indeed make more and it amortizes the cost of your TIME downward.

Regardless you need to know the cost of your TIME when you price that first set of images, and you never know what will sell and h ow many times.

You shoot stock. I shoot model year products.  Your model will not fit mine and mine will not fit yours.  HOWEVER both of us really do bill for our time, its just packaged. 

BTW, I don't shoot day rate, I shoot flat rate,...a specific kind of photo costs x...plus I also bill for production costs like styling and files. But without knowing what my photo and post times COST I can't arrive at a profitable 'X' cost.  Not to mention I do have others competition for the same clients and projects so pricing must be competitive, at least on an apples to apples level. Just one more reason that CODB knowledge.

And  the industry I work in cashed to the ground in 2008.  Massive. When it started to come back the clients simply would not pay pre 2008 rates.  In fact rates were slashed in half, and it you did not compete you got now work.  Once again KNOWING the CODB...or more to the point , what COBD would allow me to continue to work, was what allowed me to create a new business model and succeed, and in fact see an big increase in net, on half the rate.  My TIME was a huge component.

Bottom line, it is just semantics.  You just package your time and it gets amortized differently based on sales.  Rationalize it anyway you like.



 



I guess Ashley is looking at his time as an investment, so perhaps he is not valuing it the way someone in your position might.

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Yelhsa
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« Reply #30 on: August 19, 2013, 06:20:33 AM »
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Regardless you need to know the cost of your TIME when you price that first set of images

I'm not disputing that one needs to know what things cost you - so would agree that one does need to take the following things into account first...

Pre production time.
Photography time.
Post production time.
Travel time.
Retouching time.
Crew / Assistant.
Stylist / Hair / Make-up.
DVD & back-up.
Prints / Contact sheets.
Insurance.
Location / Studio fee.
Props, Wardrobe.
Rentals.
Sets / Expendable.
Courier / P&P.
Actors / Models.
Travel / Fuel.
Miscellaneous.


.. before you begin to negotiate the fee - as this will determine what your base rate would need to be.

But what I'm saying is: the fee isn't actually for these things - it's for the use of you images, AFTER you have produced them.
So that's what I bill others for i.e. for the use of my images, AFTER I have created them - which are protected under the copyright law.

In other words, they are just paying for a Licence to use my images - AFTER I have created them, as agreed to beforehand.

So if I produce a set of images and it costs me 1000 to produce them - and 6 different Editors wanted to use them for... etc, etc.
Then I would bill each of them for the use of my images, based on the amount of use that each required.
So my starting point - when it comes to negotiating the fee, as to what that amount should be - would be my base rate - as that's the minimum amount, that I've worked out ahead of time, that I need to earn here.

Note: there is no maximum, just a minimum amount - because the goal here is to make as much money as possible from the images that I've created, rather than to just break even.

So yes, it's important to know how much you need to earn to at least break even - but as a professional Photographer, it's the Rights to use my images that I'm selling, not the amount it costs me to produce them or my time.

Big difference - or at least there should be, if the aim is to maximise your investment - which would naturally include both your time & expenses here.
« Last Edit: August 20, 2013, 01:21:38 AM by Yelhsa » Logged

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« Reply #31 on: August 19, 2013, 09:40:58 AM »
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It's so hard to make a point on a forum.
Why bother?
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Craig Lamson
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« Reply #32 on: August 20, 2013, 05:15:05 AM »
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So yes, it's important to know how much you need to earn to at least break even - but as a professional Photographer, it's the Rights to use my images that I'm selling, not the amount it costs me to produce them or my time.



Semantics..you still sell your time.

And WIKI? Really.

Ashley, you are a competent photographer and it appears you do just fine as a business person, "for your business model".  But quite frankly the drum you keep banging is about worn out.  Not everyone, or every market can play by the same rules. 

One size does not fit all. 


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Yelhsa
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« Reply #33 on: August 20, 2013, 06:09:59 AM »
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One size does not fit all.  

Right - so if you happen to be a Photographer who produces IMAGES (pictures, photographs) for others to use - then you would charge those people who want to use your IMAGES (as that is what you are going to be providing them with at the end of the day), for the use of them, i.e. so as they can use them in their brochures or in magazine ads or in newspapers or on Posters, etc, etc, for a period of time, in the various parts of the world they need to use them in.

If on other hand you happen to be someone who produces TIME for others to use - then you would charge those  people who want to use your TIME, for ... I guess it's for whatever they want to use 'your time' for or something like that !!
So in that case, yes, you would divide the amount you need to earn each year by the number of days you plan to work, and then bill those people who want to HIRE you, for each day they want to pay you to do some WORK FOR them, at X amount per day.

Thereby avoiding any misunderstandings down the road, as to what you have agreed to beforehand, for the amount you have quoted.
« Last Edit: August 20, 2013, 11:31:56 AM by Yelhsa » Logged

Craig Lamson
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« Reply #34 on: August 20, 2013, 07:54:55 PM »
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Right - so if you happen to be a Photographer who produces IMAGES (pictures, photographs) for others to use - then you would charge those people who want to use your IMAGES (as that is what you are going to be providing them with at the end of the day), for the use of them, i.e. so as they can use them in their brochures or in magazine ads or in newspapers or on Posters, etc, etc, for a period of time, in the various parts of the world they need to use them in.

Right - So you happen to be a Photographer who makes images for his customers to use..

But instead you :

Bill the customer directly for your time and production costs and you give them unlimted rights to the images

Or:

You bill the customer a "creative fee" that covers your time and you then also add and addition charge for usage, travel, and all production costs.

Or:

You do the above and the client pays the production costs.

Or:

You bill the customer a per shot fee, with an unlimited or even limited usage, plus all production costs and travel.

Or:

You simply bill for your time and give the client a disk of raw images.

Or:

You finance the total production costs and bill the client only for usage.

Or:

Any number of other possible options as dictated by your market and clients ...

One thing always remains...no matter how you package it or word it, you are still selling your time, among other things.

Now if saying, "Rights to use my images that I'm selling" makes you feel better or more "professional", good for you.

One size does not fit all.





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Slobodan Blagojevic
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« Reply #35 on: August 20, 2013, 09:20:44 PM »
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...no matter how you package it or word it, you are still selling your time...

A guy had a squeaky floor he couldn't fix on his own for weeks. Called a handyman finally. The handyman came, walked around for a few minutes, pulled a nail out of his pocket and with a single hit drove it into the floor. No more squeaking. The owner was quite pleased until he saw the bill: $100.

"What!? $100 for a two-minute job!?"
"No, Sir, $1 for my time and the nail, $99 for knowing where to nail it."

The moral? The less you are selling exceptional knowledge, skill or talent, the more you are selling time.
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« Reply #36 on: August 21, 2013, 05:01:56 AM »
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A guy had a squeaky floor he couldn't fix on his own for weeks. Called a handyman finally. The handyman came, walked around for a few minutes, pulled a nail out of his pocket and with a single hit drove it into the floor. No more squeaking. The owner was quite pleased until he saw the bill: $100.

"What!? $100 for a two-minute job!?"
"No, Sir, $1 for my time and the nail, $99 for knowing where to nail it."

The moral? The less you are selling exceptional knowledge, skill or talent, the more you are selling time.

I said

"One thing always remains...no matter how you package it or word it, you are still selling your time, among other things."
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Jeffery Salter
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« Reply #37 on: August 21, 2013, 07:35:23 AM »
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The moral? The less you are selling exceptional knowledge, skill or talent, the more you are selling time.

How does one achieve exceptional knowledge, skill or talent?  I would wager to guess by putting in the time to learn one's craft.  The author Malcolm Gladwell wrote in his book "Outliers- The Story of Success" http://en.wikipedia.org/wiki/Outliers_(book).  That a person must put in at least 10,000 hours to be great at one's craft, skill or whatever.

That being the case you are being paid for not only the present time, but the time you put in to being a professional.

 Craig is correct.  There are many different ways professional photographers charge for their work.  I'm an American magazine and advertising photographer.  When I receive an assignment to shoot an editorial, the editor usually asks for an estimate.  The estimate will have 2 or 3 sections.  Creative fee + Usage + production costs.  Sometimes I simply merge the Creative fee + Usage together.  The type of magazines my work appears in ranges from National magazines like People + ESPN to smaller targeted magazines like Crains.

When my advertising agent in NYC bids me for an assignment, she always breaks it up like this:   Usage + Creative (photographer's fee) + production costs.  The type advertising agencies I have sent bids range from National to regional to micro-local.  Getting ad work is a royal @#%.  (But that's another topic....)

Let's all shoot some great pictures today and get paid.
« Last Edit: August 21, 2013, 08:24:48 AM by Jeffery Salter » Logged

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Yelhsa
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« Reply #38 on: August 21, 2013, 12:19:58 PM »
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 Creative fee + Usage + production costs.  
Jeffery, quick question: do clients pay you in advance for your 'creative fee' & for your 'production costs' or do you have to cover the cost of both of these 2 things, until after you have produced the images and possibly provided them with the images too ?
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« Reply #39 on: August 21, 2013, 03:09:25 PM »
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Do clients pay you in advance for your 'creative fee' & for your 'production costs' or do you have to cover the cost of both of these 2 things, until after you have produced the images and possibly provided them with the images too ?

Good question.  That's where the pill can get bitter....  When I do an advert we request 50% of the production costs upfront.  When I shoot for an editorial magazine, my production expenses are sitting on my credit card or out of my pocket for 30 to 90 days....  It's a crazy business model and very painful to photographers who often have to be bankers to major media companies.

One way of working around this model is to start your own separate  "Production company" to rent gear and production equipment out to other photographers (including yourself...)  In the Miami market where many fashion designers come to shoot their catalogues some photographers rent out there own studio space, rental equipment and even speciality cars for photo-shoots.  
« Last Edit: August 21, 2013, 09:20:55 PM by Jeffery Salter » Logged

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