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I would recommend you read thread on "Understand your Business Costs" before proceeding.
OK, you now understand your full core Business Costs, so therefore have a Revenue Target to achieve. In simple terms if you set to same as your Business Costs (incl your salary) you break even for the year..... less, you lose money.....more, you make more money.
So how does that equate to a weekly target ? Lets start with a target revenue of £100K for the year. Easy you say ...divide by 52 weeks = £1.92K . In theory correct, but in practice you will not be working/ generating revenue each week. Lets say you aim to take 5 weeks hols a year & allow 2 weeks for sickness .....that takes you down to 45 weeks. The target has increased to £2.22K a week now !
So how do you break down the weekly target, to an hourly target, help price jobs. You want to work 37 hours a wwek...so divide by 37 you say to get £60p/h. Once again in theory yes, but in reality you will not be working on revenue raising work 37 hrs a week. We need to break out "Overhead" hours.
In corporate IT land we work on 20% overhead to cover meetings, admin etc. In a 1 man band this could increase dramatically to cover marketing, job pricing, invoicing, paying bills etc. etc. So lets say 14 hours are lost to overheads leaving 23 hours for chargeable work. This equates to £97p/h
OK, so to summarise you have to have 23 hrs of chargeable work a week, at £97p/h lined up for 45 weeks of the year.
If only life was that simple. What happens if you can't get 23hrs work one week ? Options are :-
- Increase hourly rate for work you have, without exceeding competition quotes
- Decrease your Business Costs
- Work more chargeabe hours in another week to compensate
If none of the above works, you have to set yourself a time limit, at which point you have to seriously question running a Business yourself. If photography is your passion, then consider working for someone else on a set salary.
What happens if you have more chargeable work available than 23hrs a week ?
- Firstly pat yourself on your back for being successful
- Outsource admin/overhead work to supplier who charges less than your hourly rate, leaving you to work more chargeable hours withinthe 37 hrs total.
- Contract out some of photo work, ensuring their hourly rate is less than yours, plus they meet your standard of work.
- Work longer hours to encompass work......(only do for short periods otherwise burnout)
- Contraversial one. Increase your hourly rate. You may lose some work, but the customers you retain will think you are worth the rate & possibly introduce you to other clients who can afford that rate.
Note all the above is based on covering "core" Business Costs. Each photo shoot could incur extra expenses (eg. eqipment hire) that would be added to above.
All the above is in simplistic terms & based on my knowledge from a Mgmt/Financial role in a large Corporate firm, plus experience as a Contractor with my own Ltd company (1 man band). Based on this, others with more experience of Proffessional photography will be able to give more acurate advice / comments.
OK, you now understand your full core Business Costs, so therefore have a Revenue Target to achieve. In simple terms if you set to same as your Business Costs (incl your salary) you break even for the year..... less, you lose money.....more, you make more money.
So how does that equate to a weekly target ? Lets start with a target revenue of £100K for the year. Easy you say ...divide by 52 weeks = £1.92K . In theory correct, but in practice you will not be working/ generating revenue each week. Lets say you aim to take 5 weeks hols a year & allow 2 weeks for sickness .....that takes you down to 45 weeks. The target has increased to £2.22K a week now !
So how do you break down the weekly target, to an hourly target, help price jobs. You want to work 37 hours a wwek...so divide by 37 you say to get £60p/h. Once again in theory yes, but in reality you will not be working on revenue raising work 37 hrs a week. We need to break out "Overhead" hours.
In corporate IT land we work on 20% overhead to cover meetings, admin etc. In a 1 man band this could increase dramatically to cover marketing, job pricing, invoicing, paying bills etc. etc. So lets say 14 hours are lost to overheads leaving 23 hours for chargeable work. This equates to £97p/h
OK, so to summarise you have to have 23 hrs of chargeable work a week, at £97p/h lined up for 45 weeks of the year.
If only life was that simple. What happens if you can't get 23hrs work one week ? Options are :-
- Increase hourly rate for work you have, without exceeding competition quotes
- Decrease your Business Costs
- Work more chargeabe hours in another week to compensate
If none of the above works, you have to set yourself a time limit, at which point you have to seriously question running a Business yourself. If photography is your passion, then consider working for someone else on a set salary.
What happens if you have more chargeable work available than 23hrs a week ?
- Firstly pat yourself on your back for being successful
- Outsource admin/overhead work to supplier who charges less than your hourly rate, leaving you to work more chargeable hours withinthe 37 hrs total.
- Contract out some of photo work, ensuring their hourly rate is less than yours, plus they meet your standard of work.
- Work longer hours to encompass work......(only do for short periods otherwise burnout)
- Contraversial one. Increase your hourly rate. You may lose some work, but the customers you retain will think you are worth the rate & possibly introduce you to other clients who can afford that rate.
Note all the above is based on covering "core" Business Costs. Each photo shoot could incur extra expenses (eg. eqipment hire) that would be added to above.
All the above is in simplistic terms & based on my knowledge from a Mgmt/Financial role in a large Corporate firm, plus experience as a Contractor with my own Ltd company (1 man band). Based on this, others with more experience of Proffessional photography will be able to give more acurate advice / comments.
