Advice for potential rate/releases

[Drizzt321]

So, I've been doing some live band photography for a while, a ton of one particular artist whom I love her music, and she got me in touch with a DJ which I got some shots, and he's looking to pay me for the full res shots (already offered what I consider a reasonable amount). He also has links within the music industry with some bands, and possibly send me some more work. Yay!

However, I need to define my rates, rather than just play it by ear. Here's what I was thinking of telling him, for me to start at. What do you guys thing? Am I giving too much away in terms of releases?

I was thinking $70 for 45-75 minute performance (plus any venue fees, if required), which includes delivering non-watermarked 7-15 web size (1200px long edge like I gave you) images, and up to 3 full resolution images of any of the delivered images with full release other than a credit requirement for things like magazines/album covers/social media/etc. Additional full resolution would be $15 per image with the same releases.

 

[Mt Spokane Photography]

At that rate, how long would it take you to pay for your gear after you pay for other expenses, gas, your time, etc? Do a ROI, typically, you should pay off purchases of gear in 3 but no longer than 6 months, or your losing your shirt.

 

[Drizzt321]

At that rate, how long would it take you to pay for your gear after you pay for other expenses, gas, your time, etc? Do a ROI, typically, you should pay off purchases of gear in 3 but no longer than 6 months, or your losing your shirt.

Well, I've already bought my current gear. This would all be as a side job/pay for my gear type of thing. No clue how frequently I'd get gigs either, as I have not been promoting/marketing myself much at all. At least currently, maybe I'll try doing something in the near future. Right now I imagine I'd be shooting smaller/emerging bands, not well established playing at large venues and able to afford significantly higher rates. If it was a headliner at the Greek or something, I'd expect probably 4 or 5 times that, at least.

How about in terms of the rights release? Does that seem about normal for what bands would expect?

I'm thinking I'll follow my fathers advice (registered CPA) and get a tax id, a dba, and start keeping track of those sorts of things/expenses so I'm prepared if this starts being even 2 or 3 times a month.

 

[agierke]

in my area i get on average 100.00 an hour to shoot and 50.00 and hour for post production. sometimes that can jump up to 150.00 and hour. that is for event work.

commercial work in my area (market dependent) typically gets a day rate between 1200.00 and 1600.00.


you are under charging....by alot. this may be a "part time gig" for you now but if you have any fantasy of this becoming a full time profession you will need to raise your rates. there are many hidden costs to running your own business by yourself. 100.00 an hour is not uncommon for specialist contractors.

 

[Mt Spokane Photography]

At that rate, how long would it take you to pay for your gear after you pay for other expenses, gas, your time, etc? Do a ROI, typically, you should pay off purchases of gear in 3 but no longer than 6 months, or your losing your shirt.

Well, I've already bought my current gear. This would all be as a side job/pay for my gear type of thing. No clue how frequently I'd get gigs either, as I have not been promoting/marketing myself much at all. At least currently, maybe I'll try doing something in the near future. Right now I imagine I'd be shooting smaller/emerging bands, not well established playing at large venues and able to afford significantly higher rates. If it was a headliner at the Greek or something, I'd expect probably 4 or 5 times that, at least.

How about in terms of the rights release? Does that seem about normal for what bands would expect?

I'm thinking I'll follow my fathers advice (registered CPA) and get a tax id, a dba, and start keeping track of those sorts of things/expenses so I'm prepared if this starts being even 2 or 3 times a month.

I was just giving you something to think about. There is no way you could operate a successful business with those rates. Even if you own your equipment, the day you start a business, you move that equipment to be part of the business and declare its value. The equipment represents a investment and is part of your cost of doing business.

You need to sit down with your father, construct a business plan, and understand what its costing you to do a session, and then how much you want to be paid for your time, your liability insurance (you could be liable for damages in the event of a accident), there are lots of costs to do business.

If you want to run a business, you need to do those things your father advised. If you do not and the IRS audits you, they will tell you how much tax is due according to their estimates, and it will be high.

 

[Drizzt321]

You both have given me quite a bit to think about, especially from the rates side. I don't want to start it out too low, but I don't want to come out being too expensive. All a balance I think.

 

[robbymack]

Biggest piece of advice I can give you is not to underprice yourself to the competition. You run the risk of not being able to raise your prices later. Secondly verify the tax laws in your state. For example in California if you deliver a tangible good (ie prints) then the whole transaction including session fees are subject to sales tax. The last thing you want is a problem with your state tax board or the IRS.

 

[hawaiisunsetphoto]

You're severely undercharging. Think about the actual cost of doing business, in addition to perceived value.

 

[cayenne]

Biggest piece of advice I can give you is not to underprice yourself to the competition. You run the risk of not being able to raise your prices later. Secondly verify the tax laws in your state. For example in California if you deliver a tangible good (ie prints) then the whole transaction including session fees are subject to sales tax. The last thing you want is a problem with your state tax board or the IRS.

I've been wondering about that myself....as I think about someday getting some $$ for my photo/video work.

If you give the results, full rights and all, would that not be considered a 'work for hire', in which case you're not truly selling anything but your time....like if you're contracting to do some computer coding (which I've done before)...I worked on their site, they did furnish equipment mostly....but the code I left there, and I just 1099'ed them for the work.

I have an S corp...so, out of the full bill rate, I paid part of that out as a 'reasonable' salary for the IRS, out of that was paid employment taxes....the balance fell through on personal taxes, but only with fed and state on that.

Anyway, the point is...I never 'sold' a product, I generated something electronic for them. So, if you delivered only electronic images....would that not qualify as work for hire too?

I'm sure it varies from state to state greatly...but was something I was pondering the other day...

C

 

[PeterJ]

One other thing you want to think about is travelling time. What if a regular customer expects you'll do a 45 min gig that's two hours drive away for $70? In my non-photography business I normally charge 50% - 100% of my normal rate for travelling time if it'll be over 10 mins, depending on how much work I'm doing while there.

That seems to be an important thing to make clear and cover if the travelling time will ever be significant compared to the 'work time' as it is sometimes for me.

 

[trojdor]

Everyone has given you good advise. Something to consider is that 'going pro' is not something to dabble at. It's a real business, or it's not a business at all. You've already paid for the equipment you have...that's great. But that gear won't last forever, and you'll need to anticipate replacement costs. Then there all the hidden costs that tend to creep up. Dabbling at professional photography is as practical as being a little pregnant...it's an all or nothing kind of thing.

 

[sanj]

Pls do not undercharge. Request!

 

[Greg_M]

Consult with an accountant to help you with depreciation figures and taxes.
You may want to form an LLC.

 

[robbymack]

Biggest piece of advice I can give you is not to underprice yourself to the competition. You run the risk of not being able to raise your prices later. Secondly verify the tax laws in your state. For example in California if you deliver a tangible good (ie prints) then the whole transaction including session fees are subject to sales tax. The last thing you want is a problem with your state tax board or the IRS.

I've been wondering about that myself....as I think about someday getting some $$ for my photo/video work.

If you give the results, full rights and all, would that not be considered a 'work for hire', in which case you're not truly selling anything but your time....like if you're contracting to do some computer coding (which I've done before)...I worked on their site, they did furnish equipment mostly....but the code I left there, and I just 1099'ed them for the work.

I have an S corp...so, out of the full bill rate, I paid part of that out as a 'reasonable' salary for the IRS, out of that was paid employment taxes....the balance fell through on personal taxes, but only with fed and state on that.

Anyway, the point is...I never 'sold' a product, I generated something electronic for them. So, if you delivered only electronic images....would that not qualify as work for hire too?

I'm sure it varies from state to state greatly...but was something I was pondering the other day...

C

True every state varies but you can probably safely assume california is likely the most liberal in their application of state tax laws so it shouldnt be much more complicated than it is here. At least in California delivery of electronic goods are not considered tangible property. However lets say rather than emailing a photo to a client you give them a thumb drive or cd. The thumb drive or cd is considered tangible property so the entire transaction would be subject to sales tax. You can go through a convoluted process of having them document returning the thumb drive or cd to you within a specified time period to avoid the tax issues, but it's easier to use email in my opinion if you aren't going to be charging the client for prints.

 

[Greg_M]

If you have any income (over $600), you will have to pay Income Tax. If you do not, you may be found guilty of income tax evasion and not only have to the tax you should have paid, but penalties and interest which may equal the original tax. The tax codes are way to complicated for someone who is not schooled in them. Get yourself an accountant and let them worry with it. Then you can do what you do best and not have to think about book keeping.

Either it's a business or it's not.
Probably you will be shocked by how much tax you have to pay to be in business that you never even knew existed. Here in WA you have to pay a tax just to be in business. It's called Business and Occupation (B&O) tax. People who do not run a business have no clue as to how many taxes and hidden costs there are in a business. There are also benefits in the form of deductions which an accountant can advise you on (like transportation costs for one) as a deduction.

I ran a machine shop for a few decades and chose to not have to occupy my time and brain power with book keeping. I was only audited once by the state and I simply informed them that I had no clue about book keeping and asked them to contact my accountant which they did. I did not have to deal with any of it.

I find that lack of stress worth the cost of the accountant

 

[PackLight]

First off, I am a self employed indidvidual however I am not a pro photog. I would love to be but it would be severe cut in pay.

But to give you a few things to think about.

Since your Dad is a CPA talk him in to doing all the tax part of this for you for free. Otherwise you would be working to pay his $150 an hour bill and believe me, you are charging no where close to enough to pay a CPA.

Food for thought. You have to charge for your equipment, like others have said it doesn't last forever. To put it in perspective for us laymans, if you have a 5D III and its life span is 100,000 shots it would end up costing you about 3 1/2 cents a shot. For a session with 300 shots that is $10.50. That doesn't incldued maintenance, lenses etc, so it could easily get up to $20 or so in wear and tear on your gear for just a small session. Take this in to account, figure that a certain part of your fee to gear.

Milage, you should get 45 to 50 cents a mile minimum for driving. Wear and tear on the vehicle, fuel etc.

Travel time, 1 hour of work cost you 2 hours if you are 30 minutes away. Build that extra in.

Finally I would look at this, if your getting in to the show for free. If they are providing your drinks. If you can pick up hot chicks because you are the photog on site. Then I think if they pay you $70 it might be about right. Maybe even to much

 

[unfocused]

Lots of good advice here.

Since you have ready access to a CPA, you are very fortunate because he can help you with a sharp-penciled approach to what is realistic. That's something that too few small business people consider when starting out and why so many small businesses close down the road.

Of course you have to balance out your need to make a profit and the ability or willingness of your clients to pay. It's very easy for others to say that you should be charging more, but very hard for you, at this point, to turn down opportunities to learn and gain experience because your clients can't or won't pay what your services should be worth.

Ask yourself if this is a hobby or a business. Right now, you are charging hobby rates. Are you content to continue charging hobby rates knowing that it is unlikely to ever lead to earning enough to operate a business? Would you be happy joining your Dad's accounting firm for your day job and then continuing the photography work on weekends and evenings?

Your Dad will have better advice, but here are a couple of quick exercises: Let's say you continue to charge $75 for a live shoot of an hour or less. Multiply that by how many shoots you can reasonably do in a year. Three gigs a week, year round, at $75 each – that's less than $12,000 gross.

Now, what's the most you realistically believe you can earn in the foreseeable future? Let's say you could get $500 per shoot and score the same three jobs a week. That's pretty aggressive, but even at that rate, you'd be grossing less than $80,000 a year. That's a living, but it is never going to make you rich.

Finally, something to consider. If you really feel you cannot charge more than $75 a job right now (possibly your clients can't afford any more than that), consider setting a higher, more realistic rate and offering a discount of some sort. That could give you some headroom in the future. "I'm planning on turning pro next year, but right now I need to build up my portfolio, so I am offering a special 'starving artists' discount. The catch is that I retain the rights to the photos and I'll need a signed release from all band members. You can use the pictures to promote your band, but not to earn money from t-shirt, poster or other sales. I will sell you the rights to all the pictures, but that will cost you quite a bit more."

 

[Drizzt321]

Lots of good advice here.

Since you have ready access to a CPA, you are very fortunate because he can help you with a sharp-penciled approach to what is realistic. That's something that too few small business people consider when starting out and why so many small businesses close down the road.

Of course you have to balance out your need to make a profit and the ability or willingness of your clients to pay. It's very easy for others to say that you should be charging more, but very hard for you, at this point, to turn down opportunities to learn and gain experience because your clients can't or won't pay what your services should be worth.

Ask yourself if this is a hobby or a business. Right now, you are charging hobby rates. Are you content to continue charging hobby rates knowing that it is unlikely to ever lead to earning enough to operate a business? Would you be happy joining your Dad's accounting firm for your day job and then continuing the photography work on weekends and evenings?

Your Dad will have better advice, but here are a couple of quick exercises: Let's say you continue to charge $75 for a live shoot of an hour or less. Multiply that by how many shoots you can reasonably do in a year. Three gigs a week, year round, at $75 each – that's less than $12,000 gross.

Now, what's the most you realistically believe you can earn in the foreseeable future? Let's say you could get $500 per shoot and score the same three jobs a week. That's pretty aggressive, but even at that rate, you'd be grossing less than $80,000 a year. That's a living, but it is never going to make you rich.

Finally, something to consider. If you really feel you cannot charge more than $75 a job right now (possibly your clients can't afford any more than that), consider setting a higher, more realistic rate and offering a discount of some sort. That could give you some headroom in the future. "I'm planning on turning pro next year, but right now I need to build up my portfolio, so I am offering a special 'starving artists' discount. The catch is that I retain the rights to the photos and I'll need a signed release from all band members. You can use the pictures to promote your band, but not to earn money from t-shirt, poster or other sales. I will sell you the rights to all the pictures, but that will cost you quite a bit more."

Well, right now I am charging hobby rates, or at least rates where I'm not doing it full time. My Dad runs his own, semi-part time practice, and it's back home which is 3000+ miles away. Leaving that aside, I do software development, and I'm quite well paid. I'm not thinking (at this time) to turn this into my full time job. But, if I can get a couple of grand a year, or more, and buy an extra lens or two and be able to offset the money earned against my photography purchases, that'd be pretty nice. And as time goes on, if I'm getting 2-3 bookings a week constantly and booked out a few weeks or more, I'd certainly look at upping my rates some. Supply and demand, right?

Good point on the rights, I should have to 2 parts, first is normal, promotional materials (flyers, web, etc) and a higher rate for sellable items (t-shirts, posters, etc). Hmm....gotta think on that a bit more.

 

[PackLight]

An amature that just wants to make a few bucks so he works cheap, is the same guy we hear some Pro's complaining about all the time that they think mess the market up and take work away from them.

 

[Drizzt321]

An amature that just wants to make a few bucks so he works cheap, is the same guy we hear some Pro's complaining about all the time that they think mess the market up and take work away from them.

If I wanted to go cheap, I'd say $50 and I'll give you everything hi-res and do whatever you want with it. I honestly don't know what the normal, fair-market rates would be, which is why I asked it here.