Making a Consistent Monthly Income
A few years ago, I met the ever-lovely Jamie Delaine when she attended a workshop. Since then, she’s grown her photography business and helps others grow theirs (she also organized fund raising campaign to build a school in Haiti!). She’s learned a lot over the years and today she’s contributing a blog post to ensure you’re getting paid every month as a photographer, regardless of how busy you are. Here’s more from Jamie…
Making A Consistent Monthly Income as a Photographer
In the summer season as a wedding photographer, it’s go time. Weddings almost every weekend, to-do lists up to your eyeballs, but come winter? You’re working hard catching up on off-season projects and office admin but at the end of the day, your hours in front of a laptop don’t pay the bills. It can be challenging to survive the off-season financially… without knowing your numbers and separating your finances.
1. Know Your Numbers
A. Cost of Goods Sold
Cost of Goods Sold is what every wedding or portrait collection you book actually costs you. For your average booking, make a list of every item included: second shooter, online gallery, client gifts, wedding album, engagement guestbook. Next to each item, list your hard costs. When you have your total COGS for each wedding collection, subtract the COGS from the retail price of the collection.
$3500 wedding collection – $800 cost of goods sold = $2700 net profit per wedding
B. Gross Income
By multiplying your average net profit per wedding and the number of weddings you photograph a year, you’ll find your gross income. $2700 x 20 weddings = $54,000.
This number represents what you make from weddings, after delivering the collection to the client, but before paying your expenses.
C. Fixed and Variable Costs
Every business has a specific amount of income they must generate every year to cover all expenses. I like to call this a ‘break even number’ and it’s comprised of your business’ fixed and variable costs.
Fixed costs include any expenses that do not change from month to month. Examples: Mortgage/Rent, Internet, Business Insurance, Software Subscriptions, Cell Phone, etc. Variable costs fluctuate, for example: Advertising, Packaging Supplies, Coffee/Restaurant Meetings, Education/Conferences, Branding/Design, etc.
By combining your yearly fixed costs and your yearly variable costs, you’ll find your break even number. Your business will need to bring in more money than this in one year’s time to stay out of the red.
D. Your Salary
By subtracting your yearly fixed and variable costs from your gross income (after cost of good sold in every wedding collection) – you’ll receive your salary.
$54,000 (gross income from weddings after cost of goods sold)
– $20,000 (fixed and variable costs)
= $34,000 yearly salary
2. Separate Your Finances
It’s vital to separate business and personal finances. Whether you bring in $15,000 in August or $0 for an entire winter, you still have to pay mortgage/rent and personal bills.
The easiest way to set consistent income is estimating what your yearly salary. If your salary looks like $34,000 – divide this by 24 to find the amount you’ll pay yourself on the 1st and 15th of every month.
$34,000 / 24 = $1417
Whether you’re shooting 8 weddings in a month or zero, you’ll transfer $1417 from your business account to your personal account. (Don’t forget to set aside income tax! Calculate the tax percentage from each paycheque and set up a separate savings account until it’s time to file.)
By taking the time to know your numbers and gain a ‘big picture’ view of your photography business finances, you’re setting yourself up for success… in every season.
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