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I was going to post this at the end of PeteMCs latest thread, but thought this would be better on its own.
Most of us dream of being able to make a living out of our hobbies. Let's say you have the skill, drive & create the opportunities to make this happen. You now need to understand what your Business costs will be for the year, including your salary. This will give you a minimum amount of revenue you must achieve.
From my Mgmt/finance experience in Corporate IT land, the real cost to a company of an employee is double their salary. This is with large economies of scale, so for a 1 man band this could be more or less. I'll try & list what costs will be incurred by your business (others can add if I've missed anything)
Premises
Rental costs
Mortgage costs if buying
Rates
Utility bills
Telephone / Broadband
Insurance
Furniture
Maintenance
- the above is still applicable if you use just 1 room in a house (take a % from house costs)
Studio / location rental (*)
Equipment
All Camera equipment & Accessories
PC equipment, printers & Accesories
Consumables (batteries, printer ink, paper)
Hiring of equipment (*)
Software
Maintenence
Support (eg. PC support)
Insurance
Transport
Vehicle, including maintenance, insurance, TAX
Shoot transport costs - Petrol, Parking / Taxis, trains, planes etc (*)
Offsite Accomodation
Hotels / B&B's etc. (*)
Meals (*)
Marketing / Advertising
Magazines, Radio, TV etc
Internet - Web site Design
Web hosting
Entertaining (*)
etc..
Employee Salary / Benefits
Salary
NI
Pension
Sick pay
Holidays
Training
Other
Accountant
Admin
Hiring of models for shoots (*)
Agencies
(*) - These are likely to be non core costs - eg. only applicable to specific shoots
Note certain items above such as hardware/software purchases can be spread over several years via loans etc.
I know it looks a bit daunting & some people would say all the above is not necessary, but there is a big difference between running a successful business (however small) & being a successful Photographer. One cannot work without the other & from my experience it's very hard to juggle both hats.
Your salary is just 1 part of overall costs. Therefore when pricing jobs for the week ahead, you not only have to cover 37 hrs pay of the Photographer for the week, but all the additional costs above. I won't even go in to continegency for lax periods
Hope the above is of help to some people, or at least a good starting point for discussion. I'm sure those who have run their own companies will have more understanding on the subject, which they could share with us.
Most of us dream of being able to make a living out of our hobbies. Let's say you have the skill, drive & create the opportunities to make this happen. You now need to understand what your Business costs will be for the year, including your salary. This will give you a minimum amount of revenue you must achieve.
From my Mgmt/finance experience in Corporate IT land, the real cost to a company of an employee is double their salary. This is with large economies of scale, so for a 1 man band this could be more or less. I'll try & list what costs will be incurred by your business (others can add if I've missed anything)
Premises
Rental costs
Mortgage costs if buying
Rates
Utility bills
Telephone / Broadband
Insurance
Furniture
Maintenance
- the above is still applicable if you use just 1 room in a house (take a % from house costs)
Studio / location rental (*)
Equipment
All Camera equipment & Accessories
PC equipment, printers & Accesories
Consumables (batteries, printer ink, paper)
Hiring of equipment (*)
Software
Maintenence
Support (eg. PC support)
Insurance
Transport
Vehicle, including maintenance, insurance, TAX
Shoot transport costs - Petrol, Parking / Taxis, trains, planes etc (*)
Offsite Accomodation
Hotels / B&B's etc. (*)
Meals (*)
Marketing / Advertising
Magazines, Radio, TV etc
Internet - Web site Design
Web hosting
Entertaining (*)
etc..
Employee Salary / Benefits
Salary
NI
Pension
Sick pay
Holidays
Training
Other
Accountant
Admin
Hiring of models for shoots (*)
Agencies
(*) - These are likely to be non core costs - eg. only applicable to specific shoots
Note certain items above such as hardware/software purchases can be spread over several years via loans etc.
I know it looks a bit daunting & some people would say all the above is not necessary, but there is a big difference between running a successful business (however small) & being a successful Photographer. One cannot work without the other & from my experience it's very hard to juggle both hats.
Your salary is just 1 part of overall costs. Therefore when pricing jobs for the week ahead, you not only have to cover 37 hrs pay of the Photographer for the week, but all the additional costs above. I won't even go in to continegency for lax periods
Hope the above is of help to some people, or at least a good starting point for discussion. I'm sure those who have run their own companies will have more understanding on the subject, which they could share with us.