Hi, I'm susan stripling and this is thirty days of wedding photography thank you so much for being with us so far we have a long way to go from here, but today is going to be a great day, so I'm glad you're here with us. If you've been with us so far, you'll have known how to set your business up, how to make smart legal and financial choices, the people that you might need to help you along the way and then that very difficult intangible how to find your very first wedding client what I'm here to talk to you about today is pricing the very difficult and elusive art of how you get started with your packages how you figure out what is smart in terms of profit, how you figure out what your mark up is going to be, and then once you figure all of those things out, how do you even start putting packages together? How do you know what clients want and where do you go from there? So understanding as I've mentioned before, that I am neither an accountant nor a lawyer, nor do I have any type of...
mba in business. I do have thirteen years of being a wedding photographer behind me and I can share with you what's working for me what's been helping me and what's caused the most growth for me and my business now I understand that all of this might not be applicability to you so feel free to take what you need and discard the rest but hopefully something that I tell you today might help you become more profitable or might help you look at the way you're structuring your finances and your pricing and your package is in a way that is more streamlined and easier to handle and in the long run more profitable and better serving of your clients so let's get started the first thing I want to talk to you about is the things that you need to know before you actually start putting those packages together and the first thing is the cost of running your business I will help you with that in the slides to come so that you know how to do that but the first thing that you really need to have a handle on whether you've been in business one year or twenty years is what it actually costs to run the business that you have what does it take to keep susan stripling photography up and running financially day to day month to month and year to year the other thing that you need to know is what does it cost you to shoot a wedding from the second you leave your house to meet with your perspective client for the first time all the way through delivering that final delivery ble to them what does it cost to shoot and produce a wedding for a paying client? The other thing that is slightly important to know is what your cost of living is now that doesn't necessarily have anything to do with the cost of running your business. In fact, it has nothing to do with the cost of running your business, because, as we've discussed already, your business and your life are two completely separate different entities and should be treated as such. So not only do you need to know the cost of running your business and the cost of shooting a wedding, but it's also really important to know your cost of living, knowing your cost of living will determine how much money you need to make from your business in order to live and knowing the cost of running your business will also make sure that not only can you pay yourself what it costs for you to live, but you could also make enough money to keep your business moving. So let's talk about what all of those things in tail and because I am a little bit of an over organizer because I really like to run numbers and I really, really like toe work at them, I made you a handy dandy pricing calculator, um you receive this with the purchase of the course it doesn't have my numbers in it which are completely not helpful to you it will be blank so that you can fill in your own but this is what I've devised to help me figure out my expenses every single year every single month and every single day that I continue to run susan stripling photography I revisit this multiple times a year every time a bill goes up every time a payment goes down every time I add on a new cost or a new dance class for my daughters or anew advertising expenditure I come back over and I revisit this pricing calculator so that I can rerun all of my numbers now while a lot of people really do like to do this on paper and you can sit down and you can write it all out if you are more computer savvy if you prefer numbers or excel you khun build a very simple pricing calculator yourself on your computer that will take all of these numbers and make you tallies and put in your math yourself when I very started doing this many many years ago I simply just did this with note pad and pen and calculator in hand it was helpful to look at my numbers right them down manage them out manually but now because my numbers for the most part your tea your stay very, very very similar I made myself an excel spreadsheet so that I can just plug the numbers in and let it run the math for me so let's start first with the very first thing that I mentioned in the last slide which is the cost to run your business now these are the things that are separate from your life entirely it doesn't matter what I'm paying for my home utilities or what I'm paying for my car insurance or what I'm paying for monthly medical insurance when you're looking at my business this is what I just simply costs to be susan stripling photography for an entire year I started the very top with mortgage and rent now my morgan and rent are zero well, some of you might be saying but you have to pay rent on your apartment and don't you? That doesn't make any accents but I don't own a building for my business and I don't rent a studio again we're talking about cost of running my business I run my business out of my home therefore I don't have a mortgage or a rent cost now I understand a lot of people are probably saying but hold on just a second you live at home and you work at home, so can't you deduct ah portion of your rent or your mortgage for your business because you do work at home now? Yes I could I have a room in my home that is dedicated only to business, I have an office that isn't used for a bedroom or a guest room or anything. It is simply an office. I go in and close the door that's my headquarters now I've spoken at length with my accountant about whether I can or cannot deduct a portion of my monthly rent to pay for that space, almost like I'm renting space from myself when you are a home based business. One of the red flags with your taxes, with your yearly expenses to the irs, one of the red flags has been writing off a portion of your mortgage or your rent. As office space, we looked at my numbers, we looked at what I was paying in taxes, and it simply didn't make sense for me to try to take a deduction for the space that I was using in my home toe work in because of the red flag that it might have raised. Now I'm not worried about raising flags. I don't have anything to hide in my accounting or my business practices, but the last thing I want is the irs to come back to me and say, hey, you claim this amount every single year for your home based business that seems very fishy let's talk more. So at this point in time I am you know, I don't take that deduction that doesn't mean that down the road maybe if I have a bad year or maybe if I need teo find a few more deductions for the year that we might use it, we've kind of been saving it up if we need it, but for now I don't take any portion of my monthly rent as office space, so my number is zero new equipment, these air, all of my numbers from two thousand and thirteen I got all of these numbers by going into my quickbooks, which we will talk about about how I sort of run the accounting side of things and quickbooks I literally ran my expenses for the year and looked at every single line item to realize what the numbers are. Last year I spent eleven thousand six hundred and thirty dollars, in new equipment. Now I took that number and I compared it to two thousand twelve I compared it to two thousand eleven I compared it to two thousand ten I went back and I looked to see if that number wass an average now some years I spent more the year I converted from canon tonight con I definitely spent more some years I've spent almost nothing where I don't buy a new camera body or I don't buy a new lens or anything like that but my average was actually in two thousand thirteen, when I spent about eleven grand, and then I went back and looked at the previous years. That was a pretty good average of what I spent on a yearly basis for a new gear stepping downwards advertising. I spent almost thirty thousand dollars last year in advertising. That number is high in years prior, I had spent much less in advertising, but because I'm doing some new things because I'm trying to get my name out in some new ways. The thirty thousand that I spent in two thousand and thirteen I felt was very indicative of where I was going to go in fourteen and fifteen. So instead of looking for an average of what I'd been spending an advertising over previous years, I decided to go with that number. For example, I took out an ad in new york weddings magazine, I took out a full page ad that's, not inexpensive, but I plan on continuing that ad for at least another year. Teo be able to really tell if it's working, you can't just go in tow one issue engage whether it works or not on one issue of advertising, so I kept the number a little higher I would like to keep that ad going. There are several other advertising ventures that I'm going after that I would like to keep going I have no problems telling you what I'm doing now I have no problems telling you what I've done before but as a business person that would be very very foolish to tell you where I'm going because I don't want you to get there before me so in advertising I feel like that's a very comfortable number for me every year and then we just simply start stepping down office supplies and I'm not just talking about pens and pencil and paper I'm talking about all of the various things that you buy to keep your business going repairs that's another thing that you need to consider when you're looking at your cost of running your business you've bought all of this gear chances are you going to drop it or break it or it's going to get old or it's going to need to get looked at do you send your gear in every single year to be looked at or repaired or have your sensors clean you know maybe you don't spend nine hundred dollars a year on repairs but I have so much gear and I use it so often and I shoot over fifty weddings a year and I'm really hard on my equipment so having a budget for repairs is a very very important thing now in two thousand thirteen my education number was zero I didn't go to a workshop, I didn't spend any money on any educational things that doesn't mean that I'm not going to do it this year and it doesn't mean that I'm not going to do it next year. The education that I did in two thousand thirteen wass watching creative lives when they were out when they live stream it wass talking to my friends it was a very big year of business development in creative development or I didn't per se attend workshops that cost money I was doing mohr calling up my best friend who's, a wedding photographer and talking about what our plans were for the year and for the future I have no problems adding back in more education money in the years to come and in yours prior I had spent money on it this is why I also have that this in a savings account that I talked about if I have budgeted zero for education but something comes up and I really want to go to a workshop that's expensive I know that I have the money set away, but if I feel that it's a worthwhile investment, I can go pull that money and use it for that workshop software photoshopped light room, creative cloud something new fundy album builder something that's going to come out that I have any have even heard of yet that is figured into software it's figured into anything that I do software wise that requires an update it also covers e junkie, which is the portal that I used to sell the think books that I write it's everything that has anything to do with software and I don't lump it into any sort of equipment because it is a completely different animal when it comes to things that I buy coming down further legal and accounting what I pay my accountant every single year to prepare my taxes for me, it's fifteen hundred dollars that's something that I need to have in my budget in my line items of my budget because I need to know that that fifteen hundred dollars is coming in april or october if I file an extension and also if I have any problems and I need to reach out to him and have him help me. But I have a budget for talking to an accountant estimated taxes in two thousand thirteen I paid eighty six thousand dollars an estimated taxes now there's two ways to look at it one way is if I wasn't taking good money, my taxes wouldn't be that high the other way to look at it is to just cry because that's an awful lot of money, but I put my estimated taxes in the cost of running my business because I want to know what I spent last year because it's a good indication of what I'm going to spend the next year, some people prefer to pull out their estimated taxes and simply look at it when you're building your packages as part of what you put into every single one of your packages I like looking at it is a hard line item for the year because I have been doing this for years because I have been seeing my business growth four years. I can estimate what I'm going to oh in taxes every single year, but that's sad. So let's move on travel, utilities, utilities that I use for my business, not paying my home utilities, postage and shipping every single time I ship a think book toe a photographer or an album to a client? Yes, the reason find my postage and shipping is so high is because I do sell printed versions of the books that I write and I have to pay to have them shipped out. And while yes, the postage and the shipping our figured out into the cost of every package, I still like to know it as a line item. Bank service charges not that expensive, but it's still one hundred and fifty bucks that I'd like to know are coming. Industry association fees paying for people a continuing to be a w p p ay member. Anything that I pay for as a dues or subscription basis is listed in my cost of running my business insurance, anything that I pay insurance wise above and beyond. You know, my renter's insurance, which is not listed over there. It's listed on my cost of living. But business insurance, anything additional that I have to do any anything that I might have to pay my insurance company above and beyond. If I have a venue who wants to be listed as an additional insured, that costs me a little extra money, I need to have that figured in gifts. I do have a line item for gifts. I like to be able to send gifts to my clients. I like to be able to send gifts, toe wedding planners and coordinators and venues and vendors on I liketo have it in my budget as a line item so that I don't have to worry about it. Did I work with a planner? That was really fantastic, and I want to make her an album, and I want to send her a box of macaroons and some flowers I know that I can do it because I have it built end. I also have built in meals and entertainment. I know that you cannot deduct one hundred percent of that, you can only deduct fifty percent of it, but I still take clients out to eat. I still take my assistant out to eat before events. I still do travel where it is sort of important that I eat food and I have that down is a line item and I have been very generous with these numbers. I don't want to skimp on these numbers because I don't want to look back and realize that I'd underestimated anything. In fact, I want to overestimate what I'm going to spend in each of these categories, because at the end of the year, if I've overestimated, I've got money left over, which is fantastic, but if I have underestimated, I don't have enough money to keep my business moving. So when you look at your total yearly expenses, my total yearly expenses air pretty darn high. Now looking at all of this, my biggest expense is my estimated taxes, there's not a whole lot I can do about that. I can't really cut that expense down without making less money, which why would you want to do that? But my total yearly expenses are about one hundred seventy six thousand dollars to run my business. Now yours might be more than that. Yours might be less than that. You might be a new business so that your cost of running your business every single year is almost nothing, but that doesn't mean you shouldn't know this, and that doesn't mean you shouldn't be doing this from day one from the very beginning. So as your business grows, this becomes habit to you, so I've talked to you about needing toe know the cost of running your business now, let's talk about the cost of shooting the wedding that's my middle graph here now hard costs for shooting every single wedding I pay my assistant three hundred dollars if a wedding is eight hours, she makes three hundred dollars if it is above and beyond eight hours. If it's nine, ten, twelve, fifteen she, of course, makes more money. She, of course, makes over time. I tried to take care of her as much as I possibly can sometimes if the wedding is very difficult, she makes a little extra pain and suffering money, but when I'm looking at cost of shooting a wedding, I'm looking at your average everyday ate our wedding, my smallest collection that I have starts at eight hours of coverage, so for an eight hour wedding, I am paying my assistant three hundred dollars now. I outsource my post processing I work with a company called sidecar post they've been here on creative live and taught before jennifer from sidecar post is going to come back and help us with the workflow days in this thirty days, which is really fantastic, she's extraordinarily talented, but I did reach a point in my business. We will talk about when that point came, where I needed to start outsourcing my post processing of my raw files. As I've mentioned, I work from home, it is just me, I'm all by myself and I shoot fifty weddings a year there does reach a point where I cannot handle the post production of all of those weddings by myself and where when I ran all of my numbers, I can make more money in the time that I would be post processing by working on other ventures by working on better serving my clients by working on networking with other event professionals. Then I'm spending on the post processing itself, so for an average eight hour wedding, it varies because we do play paper image, but on the high side because I always want to estimate on the high side, I don't want there to be any surprises, it cost me six hundred twenty five dollars. To send my images out for post processing that some of you might be saying, my god, six hundred twenty five images there's one hundred twenty five dollars for post processing like that's, completely insane there cos that will do that for you for, like, one hundred fifty dollars or two hundred dollars. Yeah, I know I tried them and they couldn't do it six hundred and twenty five dollars per wedding tohave it processed to perfection every single time by the same person every single time is worth its weight in gold. I am very glad to pay for that and no one paying for premier service. I know I'm paying for premier work, therefore it comes with a premiere price and it's something that I'm very comfortable with. It cost me seven dollars per wedding to proof it online. I work with zen folio, they are the company that I used for online proofing, and I've averaged out at fifty weddings per year. When you divide the business plan for the year, it cost me seven dollars wedding to put a wedding online pre event dining is sixty dollars now that might seem ridiculous. Prevent dining. What are you talking about before every single wedding? If we are able, I take my assistant out to lunch with me or breakfast, depending on where we're starting and yes is it fantastic to sit down with her and have, like, a really great meal and to chitchat about what we've done throughout the week? Of course it is she's my best friend, she is a dear human being. I like going out to eat with her, but the point of the pre event dining is not just to sit around and gossip and chit chat it's to go over the timeline of the day it's to re talk about any issues that might be coming up on the wedding day itself, and it is literally kind of a pre event huddle, so I have that built in no, of course it doesn't always cost sixty dollars, but if you're shooting at the four seasons and I want to eat on site, I need to estimate on the high side what it's going to cost to take her out for our pre game get together and I need to build that in and parking generally, I pay about forty dollars, to park, sometimes it's free, sometimes it's one hundred dollars, the average of what I paid in two thousand thirteen to park at an event with forty dollars, so that's, what I'm going to put in there, I know a lot of photographers that require their clients to reimburse them. For parking that's something that's just always made me very uncomfortable, so I went ahead and I built it into every single thing that I do so that I know that I'm being compensated for that. Now when you add all of those things up, the cost to shoot a wedding is a thousand dollars one thousand thirty two, to be exact. Now do I have my time in there? I do not, because I figure that in later these air, the cost to shoot a wedding that have nothing to do with me one thousand and thirty two dollars in hard costs to get a wedding out the door now moving onwards for that, you've talked about what it costs to run your business. We've talked about what it costs to shoot your basic wedding time on ly no products, nothing else is thousand dollars. Now we move on to your cost of living. A lot of people actually don't have much of a handle on what their cost of living is. I know friends of mine who say, you know, yeah, I really don't know what I pay in utilities a year, I just kind of pay them. If you have no idea what your cost of living is, go back into your bank account. Ah lot of online banking options I know with my bank I can look at what I've spent throughout the year if you're looking for an app or a service to help you with this I know a lot of people who use meant I've never used it because I have kind of a different system for how to do it but meant will let you linked to all of your bank accounts and all of your credit cards and then it will show you what you've spent in each one of these categories based on the places that you shop at it will tell you how much you've spent in food for the last year in the last six months, I continually revisit these numbers throughout the year so that I make sure that they are correct and then you're looking at just your basic everyday cost of living you have your mortgage and your rent and yes, I know it's forty five thousand dollars I live in new york city there's nothing I can do about that um my utilities what I pay foreign food, I don't have a car loan but how to carlo and it would be there paid off my car have debit card debts or credit cards or student loans and I'm not saying that to brag or to sound like, oh, I have no debt, I've had debt, I've had credit card debt, I've had car payments I don't anymore because I started working with people who would help me handle my money better and get out from under debt I've been completely debt free for six years and maybe you are and maybe you're not and if you're not that's okay, but know what your debts are and know what your payments are so that you can accurately make sure that you have enough money every month to cover them moving on down I've included in here my personal savings for the year and how much I save per year for my kidscollege funds now if I'm having a good a good year, these are the numbers that I'm trying to hit if I'm having a bad year these are the numbers that are going to be the first one to get shaved down but I want to figure this out into my yearly expenses because for me saving for the future and saving for my children's college educations is not negotiable coming on down just traveled throughout the year clothing throughout the year entertainment throughout the year this isn't just me I have two daughters a husband in two stepdaughters I have a lot of people to take care of I have all of this figured out it's all estimated on the very high side the very high side so I figured that my total yearly expenses are about two hundred twelve thousand dollars which is did absurd, right like that's a really high number going to talk to you about the height of these numbers in just a minute, but allow me to keep going, then we come down here to what do all of these three things mean, and how do they come together? This is my how much per wedding number, and I'm telling you, the first time I ran this, I ended up in tears. You might to take the number of events that I would like to shoot per year for me, the number of events I would like to shoot for years forty five don't shoot forty five I would like to shoot forty five now cost to shoot weddings, times number of events that thousand thirty two dollars times those forty five weddings that I'm going to shoot it's gonna cost me forty six thousand four hundred eighteen dollars to shoot all forty five of those weddings. Add my yearly expenses to run things, so take this forty six and add one, seventy six from my cost to run my business. Then you come in here and you add your cost of living. Once I add all of that together, the cost to run my business, the cost to live and the cost to shoot every single wedding, I have to make almost a half million dollars every single year. So then you divide that by the number of events, and I have to make ninety six hundred dollars per wedding to cover all of this. I'm not joking when I say the first time I ran all of these numbers, I ended up in tears ninety six hundred dollars a wedding is insanity. So what do you do once you have all of these numbers? Where do you go from here? They're well, my numbers are not open for critique, and I know people like to armchair quarterback and I know you like to backseat drive and I know that some of you have looked at all of the numbers on my spreadsheet and said, this is ridiculous, that's ridiculous. You pay too much money and rent you pay too much money for that, you save too much money. That's not open for critique. I live in new york and I don't live in a very big place and it's not very fancy, but it's still really expensive and I have to live in new york. My children live in new york that number's not open for critique. I don't want you to sit here and just go. Those numbers are so high, she's ridiculous with her money, she doesn't budge it correctly, I can't listen to her, these are the numbers that are in my ideal world this is what it costs to run my business the way I want to run it and that's what it costs to live my life the way I want to live it I don't want to be a slave to my business I want to have fun I want my kids to take dance classes I want to save for the future so those air my ideal numbers and I am comfortable with them so you know is sitting at home and saying she's doing it the wrong way run your numbers first every single person that I have advised to run my numbers has been shocked at how high they actually are and sometimes how little control they had over them and how little they knew about what they were spending in a lot of different ways and this is how I see a lot of photography businesses fail which is not only not having any sense of what it costs to run your business but no sense of what it cost to shoot a wedding and literally no clue what you're paying and living expenses. So that said what if you can't make that number per event and I'm going to tell you right now I can't make ninety six hundred dollars every single wedding I shoot I just can't it is an impossibility I know some people who can the clients that I service the market that I handle I cannot reliably I predict that I can shoot forty five weddings a year at an average of ninety six hundred dollars per wedding I can't do that what do you do if you ran them run the numbers and you come up with the problem that I came up with, which is I can't hit those numbers so what do you do? What do you do if there's no way in the world you run these numbers and you say I'm gonna shoot forty five weddings a year but then you get into your market and you start understanding your market better and you realize that you can't shoot forty five wedding is a year in florida I couldn't shoot forty five weddings a year there weren't forty five weddings for me to shoot and when I was traveling for every single wedding like I was when I lived in florida, I just couldn't do forty five moving to new york I know I can do forty five I can shoot fridays, I can shoot sundays I can sometimes have a nice midweek wedding, but what do you do if you look at those numbers and you realize that the numbers that you want to shoot or not the numbers that are kind of viable for where you're living the first thing that I would do if these numbers hyperventilate you you can't make that number per event, you can't shoot that many events go back to your expenses and look at what you can cut if I looked at ninety six hundred dollars per wedding and I said there's absolutely no way that I can do this this is completely ridiculous. The first thing that I would do would be to go back and look where I can pare down am I living in a place that's a little beyond my means? Am I spending too much money for my telephone or my spending too much for my my insurance? Could I possibly get a better deal? Could I get a better deal on my rental insurance? Do I really need to buy that much equipment per year? Do I need to spend thirty thousand dollars in advertising? The first thing I would advise you to do is go back in to start crunching down your numbers from there. The reason why that ninety six hundred dollars that ninety six hundred dollars per wedding number no longer really frightens me is because I don't rely simply on weddings for my income every single year. There are other things that I do to make money I diversify, I'm here, I'm teaching for creative live I speak at conventions, I offer private mentor shit that's I run workshops, I write books, I do other things to bring in money just because you hit that number for the amount that you have to make per wedding per year, that doesn't mean that you have to only shoot weddings. I know a lot of people who divers spy into children's portraiture as well, who shoot boudoir who do commercial work just because that's your number per wedding, that doesn't mean that that's all you have to rely on for a long time that wass all I had to rely on, but when I lived in florida, my expenses were much less so I didn't have that terrible pressure to hit that incredibly high number. So for me, I found ways to diversify. Now I'm not going to sit here and say, I'm going to stop shooting weddings, I'm going to teach and that's going to make all of my money because if I'm not out there and I'm not shooting weddings and I'm not taking care of clients and I'm not continually educating myself as a photographer, I am no use to you in any way whatsoever as an educator, so I am always out there shooting weddings, I will be shooting weddings until I retire. I have no plans on stopping, but I did look at that number, I realized it was a little high and I did two things the first thing that I did was I up that number from forty five to fifty that brought in some extra income that helped me out a little bit more, then I started diversifying and doing other things. Raising your rates also takes time when you're looking at the amount that you're making that you need to make per wedding if you're one year in business, if you're two years in business, if your five years in business maybe you can't start at ninety six hundred dollars per wedding, it takes time for your experience to catch up. It takes time for your work to improve. It takes time for you to be able to command a higher price tag so that's something that you need to bear in mind that the growth of your business financially is going to take time and again, as I mentioned over and over and over again, there are no ryker fast roots, there's nothing that I can teach you today that will allow you to double the amount that you're able to charge for a wedding tomorrow. There's just simply no way these things take time, but being very cognizant of what your numbers are and what you need to bring in and what you need to put out, we'll help you, even if your one year in business continued to be smart financially and pricing wise down the road.