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Pricing Questions

I wanted to get into this subject matter during episode three, but what I ended up ended up resulting and I have to say that we did have a framework walking into restart, but we left so much open because we really wanted to respond to what people wanted to know. So instead of me trying teo again talk through another pricing presentation, I decided to answer questions that I was asked that I was going teo address anyway, but now I know that these questions are directly coming from researchers who are watching from online and perhaps even in the studio audience, so I'm gonna start with question number one, I guess essentially I'm wondering about pricing when you were talking about profitability, you weren't factoring any sort of monthly website fees, marketing expenses, office rent, investment in equipment, correct wouldn't all this need to be figured into your profitability as well? It seems if it was, the actual profitability would be much, much lower this man, sir, I think that is a g...

reat question I needed teo first clarify that when we were talking during episode two, we were talking about per wedding profitability, we didn't get into overall business profitability because your total business profitability is something else entirely you might be very profitable on weddings and you might be in debt in your business are you guys following me? Okay because I can't run the numbers for you when it comes to your business and a lot of times what I see is that when it comes tio running your business profitability, it gets a little sticky because people aren't monitoring what they're spending on their business. So at the end of the day, they end up being like, why? Why don't I only have a hundred dollars or why am I in debt or why's that I'm working so hard? And I'm shooting twenty weddings and yet I'm not saying it reflected in my bank account. My first response to that is going to be, how careful are you watching your expensive and how much did you forecast what could possibly go on? So because I can't do this for you entirely, this could be a separate show entirely like we could actually have a full restart day, unjust business profitability. I'm not proposing that we do, because I wouldn't have anybody tune in because it's just a nightmare to work with these numbers, but let's kind of get into what we might be able to expect. The easiest way I discovered to keep track of my business expenses is when I started, I got a business credit card so it's completely separated from my personal bank account as well as any sort of joint bank accounts everything I spend on my business everything is on this business credit card and I'll tell you why but first let's talk about what some of those fees are for my business website fees hosting fees, photography insurance I have a book keeper having accountant, I have marketing expenses which should be my commercial advertising expenses if you advertise rent equipment purchases education this of course going back to creative life courses, holler books or magazines that you're getting as inspiration for your business or even for teo learn your craft workshops or conferences that you're going teo now also have to include your office supplies your auto maintenance as it relates to your business medical insurance, dental insurance, legal and professional fees, postage travel expenses, utilities, software assistance, office cleaning supplies is anybody completely bored out of their minds yet this's so much and we as creatives and artists want to get in and just be like so I have a camera and have a website if I have business cards and I'm totally legit, I wish it was that easy. What happens is that we've calculated what how profitable you are on weddings awesome, but we need to run it against the numbers that it's taking you to actually run your business so as you go through the restart process that's what you're going to have to calculate when you go home a new homework assignment you guys thought you were done with the homework the new homework assignment for you will be to calculate these expenses and then you must keep track of those because I work with the bookkeeper because I work with the a I actually have to keep account of my mileage so every time I'm driving to an engagement session or to a wedding or to a client meeting I have to calculate so boring but I calculate thanks for laughing laura see laura's my bride because she laughs in my awful jokes but you have to keep track of those miles because those air miles and I can write off in regard to my business accounts anything that gets related as a business expense as it relates to my business is written off food that I'm eating on a wedding day I can't write it all off but I can write fifty percent of it off because I'm eating in relation to ah wedding day if I take my client out to eat I can write off fifty percent of that meal because I have explained to my c p a and my bookkeeper that this is how I advertised and this is how I market so everything I spent is going on that credit card but as I started in episode one I said do not go into business for do not go into debt for your business as much as possible stay away from debt because it's very very hard to climb out and if you're constantly working from a state of debt you do not have a career you have a really expensive hobby so make sure t keep that and to keep that in context so my bookkeeper and I sit with my credit card statement I don't sit with him I pay him tio and again I put that into my account and he gives me a profit and loss statement for the month as well as a year to date balance sheet I know how profitable I was for the month I know where I need to pull back and spending and I know where I need to invest before the year's over are we all on the same page? Great question number two I think one girl today had a profitability in a package somewhere around nineteen hundred dollars here she's referring to melissa but when we accounting but we weren't accounting for all the other business expenses well we just got into those so now we know what those are if fifteen to twenty weddings is considered cuoco busy then her yearly income before taxes would be around twenty thousand five hundred to thirty eight thousand and she would be considered a busy working photographer yes melissa was profiting nineteen hundred dollars per wedding but if you recall I heavily suggested that she raised her prices as she progressed remember what I wanted her to do was raise her price is three hundred dollars every three weddings she booked right so I want people to use supply and demand to monitor I never said I never endorsed that melissa keep profiting nineteen hundred dollars per wedding I want to her to keep on raising her profitability and keep her fixed costs the same that was my fault I should have clarified that a little bit more this is what helped me I started off as a bargain barrel photographer thousand bucks and fifteen hundred dollars if you wanted the disc teo but I slowly moved out of being a bargain barrel photographer and increased my profitability as we went on now to me I thought that the flaw was assuming that melissa's prices would stay the same for all fifteen to twenty weddings if melissa applied my method of changing her prices as she progressed she would not be making twenty eight thousand five hundred to thirty eight thousand as the writer suggested if melissa applied my increasing pricing scale she would actually be making thirty seven thousand five hundred two fifty one thousand four hundred that's a very big difference and the writer puts quotes around the word busy when she referred to booking fifteen to twenty winnings how dare you? One thing I want to clarify is that fifteen to twenty winnings might not sound like a lot for a full time working wedding photographer but let's take this out of let's take this out of context and put it in reed let's put this in context and put it in reality as well. Thie average wedding photographer books for weddings a year there are so many weekend warriors that to me if you are booking fifteen to twenty weddings and if you are raising your prices to ensure that you are not just having probable weddings but you are having a profitable business, I tip my hat to you if melissa can book twenty weddings and her year income is fifty one thousand four hundred and she backs out her business expenses and she's profitable both on weddings and in the business bravo you're working towards what you want to do so please don't ever put your idea of what busy is onto other people and she's also a mother of three sorry got a little heat thie important thing to remember is to chart out your expenses in two thousand seven this is the year I wanted to go into being a full time winning photographer I had my expenses charted out and this included workshops it included the gear I needed to buy it included insurance so I went home and absolutely this was so boring this is the minutia of business I got into photography to be a wedding photographer in all of sudden I found myself with a calculator but guess what it was only as a result of making these huge business decisions that I was able to enjoy the left lifestyle and the luxury of being a photographer now once I had everything calculated out so once I calculated I have to spend x amount to buy new gear I want to go to a new conference I want to buy this photography book and I want to go to this workshop and I need to get insurance for my gear these were just a few things that he needed now at the time I didn't have a c p a so that was not part of my costs and I didn't have an office so I didn't need office cleaning supplies so you can amend to wear yours your costs lie right so once you list out everything yu need just to get started as a business person then I want you to calculate your wedding profitability if you tuned into episode two you should have known what your wedding profitability is by now we're on the same page cool once I knew my wedding profitability I was then able to calculate my business profitability so I knew that first year that I was booking weddings I knew how much it was going going to cost me to actually be a photographer I knew how much I was profiting per wedding then I knew exactly how much I was profiting for that year it was only when I had that number that I was able to say I'm now ready to become a full time wedding photographer because I can sustain myself. It was then that I was able to realize how realistic my dream of becoming a wedding photographer is because so often we get into this and I want to be a wedding photographer, I want to travel and then you don't think about all the other costs associated with it now I didn't mention business probability episode too, because I felt like that was a too much of a chunk. I felt like we had gone through a lot that day. I felt like this has been a very soul I hate like soul searching, but it was hard. I really put these three photographers through a lot and I didn't want to come down and say, yeah, your profitable, but guess what? Not gonna happen this year, boo, so we needed to get them to a point where they felt great about your brand. He felt great about your website into really rally around the idea that you need to list your expenses and then you could see is two thousand thirteen, the year that I can do it or do I have to wait till two thousand fourteen? But now you're prepared to even if you cannot, you now have the backbone to say one more year one more season, then I'm in it that's it so knowing your prices can allow you to speak confidently to clients confidently to other photographers. Last question I think there are so many people who get into this business thinking that can make a living at it, and I'm not sure it's as easy as I'm not sure it's as easy to make it your soul career as everyone acts. I know there are people who have been able to be very successful, but I'm having a very hard time finding a balance between my prices need to be just the same business and getting enough clients to hire me. I absolutely understand this writers I never wanted to come across is intimating that starting a wedding photography business was easy if I did come across that way, my apologies in fact running a profitable business is one of the hardest things you will ever do if I led you in the wrist direction my mistake, but hold on for the ride because if you'd gone with us for the three months, you should be feeling a lot better about where you are. I'm going into my seventh season and every year requires the same amount of time every year research requires the same amount of energy and chutzpah to keep my business going it has not gotten easier in my seventh year of business it has gotten harder if you're in this business thinking that it's going to get easier, I have a sad, sad feeling that you're going to be misled. So let me tell you now gets harder, but it's so much more rewarding, you know who you are, you make great friends in the process and I believe that we work hard in our businesses when we have a website that reflects our brand. We are honing our skills to shoot far brand, and we modify our prices to shoot teo for supply and demand. And all of these things are difficult in all of these things. Challenges to intense degree. But wedding photography has given me a voice and wedding photography has allowed me to discover who I am, and wedding photography has allowed me to document moments of absolute love, and I only want the same for you if that is what you want. I'm here as a living and standing testament to say I didn't have it together. I had no money. I put a piece together what I call the marketing strategy years later and he know that it works x I only want you guys to walk away from re start believing, knowing truly that this is what you guys can do.