A common question I receive is how I set up the pricing for my business. I could say “It’s simple! Just do these three things and you’re good!” But, that’s not how it works for everybody, especially not all photographers. This method can also be used for other professions, whether it’s cooking, fashion or graphic design, you name it! So here are a few things I’ve taken into consideration when figuring out the best way to place rates on my business’ services.
How are you benefiting the customer? What are you bringing so “unique” to the table?
The first thing you should ask yourself is “whats my ‘wow’ factor?” For some this is a simple question. It could be their unique sense of art work, a new piece of technology they created, a system they built, etc. But for others it may be a little tougher to decipher what you uniquely bring to your customer. When it comes to discovering your wow factor, finding what you’re good at comes first. For me, I discovered (and still am discovering my wild factor) by watching the work and actions of other’s in the same field as I am. When I found out my own sense of style and what made me happy and pleased me about what I was doing, I realized that nobody else essentially does the exact same thing I do. From brand to business to just a sense of “me” in general.
In capitalizing on your talent, your wow factor is vital. This will be the selling point to your customer’s in deciding whether to choose you for your goods/services or the other guy who they could view as a substitute. What you uniquely bring to the table sets you, your pricing, your brand and your business apart from the competitors. Making sure you know exactly what that is will set you up to know how much you’re worth figuratively and literally.
Know yourself: You can’t deliver what you know you can’t do.
Lets say you were going for a job interview or a consultation for a big job. On your resume you have all of these cool things about being able to code, do special effects, and a bunch of other stuff that you know you can’t do. Your interviewer sees this, gets excited, and hires you on the spot! But on day one, they start asking you to do all of the things you knew for a fact you had no clue how to do. This is a big no when it comes to building credibility, your business, and your brand in general. For anything regarding your business, I’ve found that it is very important to both outline your abilities, and fully understand the expectations of your customer. This will create a transparency between you and your client which then allows there to be an open communication between both parties. If the customer requests services out of your range, it’s not always the best idea to “challenge yourself” to get it done, especially when you are experimenting with your craft on someone else’s dime. It’s always a great idea to expand on your craft and brand on your own time, but when it comes to doing business with others, make sure you are delivering what’s within your means, not the impossible you’re wishing and hoping to make possible.
If YOU don’t take yourself serious, why should I?
A big problem I’ve seen with photographers and just businesses in general is that when it comes to doing business with entrepreneurs, we’re typically not taken as serious as bigger well known businesses out there. This often comes from the lack of professionalism that some entrepreneurs give off which lessens the credibility of whatever they’re selling. This gives the customer the “ok” to not take you or your business serious.
Bottom line, if you want your business to be taken seriously, be serious about your business. There are 7.4 Billion people in this world with unique talents. If you want to be in the business of putting a price tag on your’s its important for people to know that you are all about your craft and the ins and outs of it.
Research, Research, Research
Along with this comes research on your particular field and comparing your business model to those of others who have been successful in your field. With this technique, it’ll become easier to see where you should fall within the price range for your selected target audience. Being that I am a photographer, there are a few factors that come into play when giving a customer a set price on what they are asking me to capture for them. One thing that is important is figuring out your fixed costs. For photographers fixed costs could be the cameras you used to capture the event, the lighting, and lenses. For a chef, your fixed costs could be the food you bought to cook or even the people you hired as sous chefs. No matter your craft, there are always a set of costs included initially that should determine the price you set on your talent.
Nothing in this world is free, your time shouldn’t be either.
Once you find your fixed costs, make sure you add in your time and efforts, then add taxes! As an entreprenuer time is money and every second counts towards expanding your craft and your business. When building a business its important to always cover your bases first (your fixed costs) then making sure you are able to make a profit. If you have established working guidelines with a client, sticking to this agreement will be crucial for both you and them since in hindsight the longer you spend doing something outside of your set parameters is time you could have spent making a dollar somewhere else. If you are giving away time and resources for free, how do you expect to get to the next level? Don’t get me wrong, if the agreement is philanthropic and this is what was originally agreed on them great, good for you and the greater good! But, when it comes to paid events, make sure you are alway sticking to the script. Anything outside of that is either off the table or an additional cost.
Do NOT sell yourself short, you’ll never grow.
Selling yourself short will only lead to failure. Let’s say for instance (using the same exact scenario from earlier) that you are at a job interview and instead this time, you actually can do all of the things stated on your resume. You’ve done your research; you know the market, what you are worth, and you know what prices leave you breaking even. Your interviewer is impressed, hires you on the spot, but the gig or the job isn’t even giving you enough to get to and from the job comfortably. This is an instance in which it is okay to negotiate or simply say no. Some opportunities, although they may sound good, simply are not sufficient enough to cover your basic costs. This means that from these kinds of opportunities you will essentially be losing money, which is what every entrepreneur avoids when trying to grow their business. It is important to make sure that you are always conscious of how this new opportunity you are presented with aligns with your brand, your business model, and the price point you have set to cover initial costs. Anything less than this is simply not worth the risk.
If there are any other tips you all may have, please feel free to leave your responses in the comments.