By Zack Davis – PhotographyConnect.com

More and more we here about “sustainable living” and how living alignment with the planet and a cleaner environment can create a happier life. Well in business, we can also do something to make our lives happier, we can live sustainably with the real costs of doing business.

We all have seen or even know photographers and studios that value their work solely on what it their product costs are, and we all have seen $0.80 4×6′s on someone’s website. Those are the obvious ones, the photographers that haven’t figured out that their prices go beyond what it costs them to make a print. Beyond that though there’s another level of photographers, they’re a group that have moderate prices that are just below what is actually profitable and photographers that even when they posses real talent value their work as worthless because for one reason or another they have created a mindset that it’s not “worth it”.

Business in it’s most boiled down essence requires a very simple formula to make money: All Costs + % of Profit = Cost of Product

Any studio can value any cost in their own way, some studios may select to value their print costs based on a markup from their lab prices and charge heavily for their labor. While another studio may select to charge less for labor and more for products and yet another may select to charge a premium for both. In the end all studios have the same costs no matter if they are at home, a commercial space or on location. Some (not all include):

• Labor (your time has value based on your years of experience)
• Equipment (if you ever want to upgrade, clean or repair your equipment you need to devote some revenue to it)
• Utilities (unless you have created free energy and harvest your water from the rain these are expenses)
• Travel (if it’s five miles or five hundred, every mile is just that much closer to the next fill-up, oil change, tires, breaks, etc)
• Prints (the lab might only charge you $0.50 for a 4×5 and even if you’re charging $20 for it already if your whole pricing structure does not support that price point you could be losing money)
• Computers (you’re going to need a computer upgrade every 18 months to 2 years unless you enjoy watching that little load bar in Photoshop)
• Training (to stay up on the latest techniques and improve your style you’ll want to attend Imaging USA, WPPI and other training events small and large throughout the year)

I was compelled to write this article today when I was speaking with a photographer that had spent half a day capturing images and another quarter day in Lightroom and Photoshop. I inquired as to how much they had charged as we had discussed the topic previously and they were contracted for a full day at $1200. Needless to say I was shocked when they had spent 3/4 of the full day working on the images but only billed the company for $600 (a 1/2 day rate).

When I asked “why didn’t you bill them for your full costs?” and was told “it didn’t feel right, and I want to work for them again” I was stunned. This verysentence describes two mindsets I have seen in more than one photographer, the first being “it didn’t feel right”. I don’t hear “it didn’t  feel right” I hear “I don’t value my time or my work”, “these people hired me and I’m not worth what I said I charge” and than justifying it with a second thought of “I want to work for them again” thinking that because you undercut yourself by over half that they will hire you again simply because you over produced and under charged. While this may seem true there’s two more likely scenarios that will play out instead.

The first and most likely scenario is that you will go out of business. Lets take the photographer above as an example. If you have to make a minimum of 3/4′s of a day to cover your expenses (which include but are not limited to those above) before you can even make a profit  and you only charge for half a days worth of time you just paid that client $200 to let you photograph them and now have to find a way to cover this missing money. It’s unsustainable, because if you are hired by them again and again and continue to be dishonest to yourself about what it truly costs YOU to provide them with your photographic services than you only end up more behind than you were previously. If this client or any other client hires you and you continue to repeat this process of under charging you will go out of business.

The second likely scenario is a second person that thinks similar to you, and ignores their costs and undercuts your pricing. They might be making the same mistake and end up failing like in the first scenario but you’re likely to be out a client. You might think “they wouldn’t hire someone just because they’re cheaper” well think of it this way. Because you have not charged what your work costs, you are unable to serve your client to the level they require. You may not be able to complete the work as quickly as they need, capture the images at the quality or resolution they need, lack the ability to do many things. For one very simple reason, you have lacked the capital to finance the upgrades, education, repairs or new purchases you as a photographer need to deliver a high quality product.

Part of being honest about your costs not only helps you to live happier and actually view your job and your art with joy but it helps you to serve your clients. Ignoring what your costs are means ignoring a portion of your studio, your clients and even your own needs which means you will have to use an outdated camera, old computer, have little or no studio samples, under value your time or be behind in the latest photography styles. None of this helps you, your business or your client, and yes it’s not easy for some people to be brutally honest that they can’t sell their work for $1.00, $10 or $20 and stay profitable. But to be in business no matter your style of photography requires that you are honest with yourself and your clients so that you can be sustainable.

If you read this and find yourself thinking “I do that… BUT!” take a step back, swallow the hard pill and be honest with yourself. It won’t be easy in the short-term, nor will I claim it can be, but it can mean long term happiness for you, your family, your business and your clients.

Read some more – Betsy Finn at LearnWithBetsy.com discusses this topic in her latest article ”Free is the New Paid” read it HERE.