Real World Numbers About Freelancing

We all hear the complaint, the wailing, the gnashing of teeth, the disbelief. Why the high prices? Why do I have to pay so much for your work? Well, sir/madam, I am an independent business owner, not an employee. With the work I perform, the services I provide, I must make a living. Simply put, I must be able to provide for my home and all that comes with it, my business and all that comes with it, and protections for me and you in the form of insurance and other measures.

Myself.

I’m not a small part of a larger organization. The documents I filed with the Secretary of State and the IRS list me as the owner/manager/CEO. No one else.

But that’s not the primary reason you may think my fees are too high. Sure, I account for the value I bring to your project in the creative fee I include in my project estimate. Wouldn’t you? My creativity, my problem-solving skills, my efficiency, my professionalism, my ability to provide you with the thing you need has value; this is what you’re hiring me for, isn’t it? Otherwise, you could ask anyone to fulfill your request. You probably have a staff person who’s handy with a camera and who might be able to figure out how to accomplish the task. Do you have time for that? Do they have the equipment or facilities ready at hand? Can you spare them from their normal duties? What will it cost you in actual time and salary to shift them from their regular job to this project? What will it cost if you have to do it all over again with a professional? But, that’s another discussion.

Here’s the primary reason you think my fees are too high. This refers back to that single word following the first paragraph and the fact that my business is mostly a Business of One. Kind of like the Army, except without all the support. Here’s a breakdown of real world numbers showing both the actual cost of being self-employed and the assistance provided by an employer. When you look at these numbers, imagine if your employer suddenly decided to stop its sponsored benefits and you had to provide them on your own. That’s me.

If you’re just starting out as as a self-employed person, or considering the jump, look at these numbers and halt your leap for a moment. Have you considered all your costs and expenses and factored them into your fee structure? If you haven’t calculated your cost of doing business, have a look at this online calculator. It doesn’t have all the fields you may need and it may have more than you need, but it will get you started. You can create your own calculator in a spreadsheet using these fields and make it as extensive and inclusive as you need for the independent needs of your own business. Have a look: NPPA Cost of Doing Business (CODB) Calculator

Here are the numbers I was talking about (these are amounts from 2015 employer rewards statement data, your specific numbers will vary). I’ve rounded the figures for visual clarity and ease of calculation:

Let’s begin with a base employee annual salary of $46,000
This is the amount you earn before taxes, whether it’s through an hourly wage or salary. It includes other compensation like paid holidays and sick leave. This is the amount you enter into the CODB calculator as your desired annual salary (or whatever amount you’d like).

If you are an employee, your employer pays for some things and you pay for some things. These are “voluntary” benefits. Your company could take these away:

Employer Sponsored Benefits
Medical Insurance
Employer pays: $9800
Employee pays: $2450
Dental Insurance
Employer pays: $500
Employee pays: $275
Vision Insurance
Employer pays: $0
Employee pays: $160
Life Insurance
Employer pays: $110
Employee pays: $0
Long Term Disability Insurance
Employer pays: $224
Employee pays: $0
Business Travel Insurance
Employer pays: $2
Employee pays: $0
Employee Assistance Program
Employer pays: $20
Employee pays: $0
401K (matching and deferral)
Employer pays: $1400
Employee pays: $3200
401K Contribution
Employer pays: $2300
Employee pays: $0

Total Employer Contribution: $14,356
Total Employee Contribution: $6,085
Total Contribution: $20,441

The government also mandates that employers provide some benefits (these your company can’t take away):

Government Mandated Benefits
Social Security
Employer pays: $2900
Employee pays: $2900
Medicare
Employer pays: $670
Employee pays: $670
Worker’s Compensation
Employer pays: $350
Employee pays: $0
Unemployment Insurance
Employer pays: $260
Employee pays: $0

Total Employer Contribution: $4,180
Total Employee Contribution: $3,570
Total Contribution: $7,750

So, to tally the numbers, for an employee with an annual salary of $46,000, an employer will pay $46,000 for the salary, $14,356 in employee sponsored benefits, and $4,180 in government mandated benefits. The employer actually pays for their employee a total of $64,536.

The employee will pay $6,085 for their share of employer sponsored benefits and $3,570 for their share of the government mandated benefits, for a total of $9,655.

However, the employee’s share ($9,655) comes out of their earnings, reducing their annual salary from $46,000 to $36,345, before taxes, which will take out another chunk for the federal government, state government and, in some cases, local or city government.

But, the self-employed person would actually need a gross income closer to $74,000 (the employer contribution of $64,536 plus employee contribution of $9,655) to cover all the listed benefits and deductions, just to cover the $46,000 ($36,345) annual salary. And that doesn’t account for the higher costs for individual business owners for things like insurance and taxes, and additional overhead expenses like studio rental, equipment, continuing education/training, marketing and promotion/advertising, etc. And this is where the pain resides.

A large company can distribute costs across its operation, especially if it provides multiple services or products. The self-employed creative individual has limited options because they have limited resources of time and individuals. It would be great if I could split myself into three or four pieces, each handling a separate aspect of my business while I concentrated on the most important task. But, because I am a Business of One, I have to set aside time for making calls, preparing marketing materials, preparing estimates, quotes, and invoices, bookkeeping, meeting with attorneys or accountant (which is a cost), chasing down late invoices, researching and chasing down copyright infringement, registering images with the copyright office, researching and developing new products or services, web designing, social media engaging, networking, learning, researching and purchasing/replacing equipment, eating and sleeping (hopefully at least twice a week), all of which take time and are not usually billable to a client. I don’t get paid for the day to day administrative upkeep of my business. If I did, if I wanted to be paid every day of the week, like an employee, I would need to charge you, the client, even more than you don’t want to pay now.

So, when you see the fees listed for the photographer, don’t freak out. It’s ok to ask questions and for the photographer to explain all this, if necessary. Just remember, we don’t have an employer, we’re not a small part of a large company. We have to provide all our own benefits, our own incentive bonuses, our own Christmas party, our own marketing, our own company vehicle and office space, our own existence.

If you like what we do, if you appreciate the value our work brings to your project, all we request is your understanding and that you look beyond price. Because, we provide more than a necessary cost of operations (an aspect of your own cost of doing business), and while we are able to negotiate and hopefully reach a win-win situation, and while we would do the work for free if we could survive doing it (I think I speak for many creative business owners with that thought), we can’t lose money every time we take on a project. We can’t stay in business if we’re essentially paying you to do the work you request.

Don’t Be A Dilettante

There has been and continues to be talk about how the professional photography industry has been “overrun” with amateurs, flooding the market with photographs and driving down photographer income. This is only one part of the phenomenon. Three main elements are 1) technology which allows nearly anyone to make a well-exposed and, if they are competent, a well-composed photograph, 2) the capability to distribute photographs worldwide for almost no cost, and 3) buyers who enjoy increased profits from lower fees paid to individuals who have very little or no knowledge of the photography industry or how to price their work accordingly to make a reasonable profit.

You could distinguish amateur from professional based on a wide range of criteria. Some amateurs are very competent and in many ways operate similar to a professional while others have really no clue or care what they are doing.

One critical factor that separates amateur from pro is commitment. Commitment to stick it through the tough times, to understand the industry, to build relationships with clients, to maintain a certain level of technical and creative skill, to use ethical and moral business practices, to help others become better professionals.

Another term for an amateur who isn’t committed is dilettante, an Italian word which in its first usage referred to a person who loved art. But today, the term is more negative, describing a person who engages in non-serious dabbling within a presumably serious field and is ill-equipped (or actually has no intention or desire) to meet the minimum standards of that field, study, or practice. One of my pet peeves is hearing someone tell me “I don’t want to be a professional” when we’re talking about pricing work. That’s the sign of a dilettante. They’re happy to make a little money from their efforts, but not committed enough to take it further – to learn about the business side of things, to help themselves make more money, for one thing. You don’t have to be a “professional” to act like one and just because you don’t intend photography to be your career doesn’t mean you must give away your work for free (or nearly so) or not understand copyright or how contracts work. Meeting the minimum standards (and in photography, the minimums are fairly reasonable to meet) would help boost the industry, help raise the “standard of living” of photographers across the board.

I wouldn’t presume to call myself an auto mechanic because I have a complete set of tools and know how to replace an alternator belt, and if I did I’m sure auto mechanics across the nation would scoff. I might make a decent pizza dough or cornbread, but I’m no baker. I painted landscapes and abstracts a lot when I was younger, but I don’t claim to be a painter.

I’ve been making photographs since I was young. I don’t have an art degree, but I’ve been a full-time photographer for 15 years and part-time for 6 years before that. I study copyright law and business methods even though it’s not my favorite thing. I’d much rather be out photographing. I’m a member of professional organizations and become involved in their operation, though I’d much rather be out photographing. I spend hours on the computer processing photographs, keywording, uploading to galleries, creating marketing materials, creating invoices, chasing invoices, calling and emailing clients, even though I would really much rather be out photographing. I attend professional education programs and continue to learn online and from others so I can maintain and improve my skill level (this I enjoy, even though I would still rather be out photographing).

I have a college degree and graduate education in wildlife biology and ecology. I worked in that field for over 10 years. I still mention that in my bio and casual conversation because it helps inform others about my background, but I don’t call myself a wildlife biologist anymore because my commitment to that field is much less than it was when I was actively conducting research, working in that field and getting paid for it according to the standards in that industry.

When I was working as a wildlife biologist, people would be envious of my job when I mentioned what I did. They had a romantic ideal of what it was like to be a biologist, imagining how beautiful it was to be “in Nature”, sitting beside gurgling streams or contemplating existence on a mountain top, handling cuddly animals, or having the pick of hunting and fishing spots. Sure, those times happened and it was incredible when it did. But, that was in between days of fighting off mosquito attacks, avoiding sunstroke or hypothermia, getting drenched in freezing downpours, digging a stuck vehicle out of the mud, dealing with the politics of government and private agencies and organizations, egos of co-workers and supervisors, writing reports, writing grants, filling out job applications, packing and unpacking.

The same applies when I tell people I’m a photographer. They imagine the romantic National Geographic travel photographer roaming the world seeing beautiful places, meeting new people, having an ongoing vacation. Yes, that happens, and when it does it’s magical (I’m not a National Geographic photographer – but for an ideao f what it’s like check out this short video about NatGeo photographer Joel Sartore, and his full length video called “At Close Range”). Most of the time, it’s simply work, background stuff. Especially these days when I’m doing all my own marketing, image processing, accounting, doing shows, in addition to being in the field shooting.

Being a professional is not about how much you spent on equipment. It’s not about your level of education, how much you charge, whether you are full time or part time, if you have a studio or work out of your house, although these things can contribute to the appearance of professionalism. It’s the level of commitment you choose which meets or exceeds the minimum standards for whatever industry/career you’re in.

If it falls your lot to be a street sweeper, go out and sweep streets like Michelangelo painted pictures. Sweep streets like Handel and Beethoven composed music. Sweep streets like Shakespeare wrote poetry. Sweep streets so well that all the hosts of heaven and earth will have to pause and say, here lived a great street sweeper who swept his job well.” — Martin Luther King, Jr.

February and March (partial) Photography Class Schedule

Here is my upcoming February class schedule and a partial listing for March. All classes unless otherwise Click on the class title to go to the registration page (will open in a new window).

Basic Camera Operation (2 hrs)
February 4, 6:30 – 8:30 pm
February 13, 2:00 – 4:00 pm
February 21, 9:00 – 11:00 am

Photo 101 (8 hrs)
January 7 – 28, 6:30 – 8:30 pm
February 3 – 24, 6:30 – 8:30 pm
February 4 – 25, 1:00 – 3:00 pm
March 4 – 25, 6:30 – 8:30 pm

Composition 101 (5 hrs)
January 15 – 29, 6:30 – 8:30 pm

Before You Buy (2 hrs)
February 4, 9:00 – 11:00 am

Before You Buy & Equipment and Accessories Combo (4 hours)
February 4, 9:00 – 11:00 am Before You Buy
February 4, 11:00 am – 1:00 pm Equipment and Accessories

Equipment and Accessories (2 hrs)
February 4, 11:00 am – 1:00 pm

The Exposure Equation (2 hrs)
February 11, 9:00 – 11:00 am
February 13, 9:00 – 11:00 am

Light & the Light Meter (2 hrs)
February 11, 6:30 – 8:30 pm

Your Cost of Doing Business (2 hrs)
February 7, 1:00 – 3:00 pm

Copyright (2 hrs)
February 18, 6:30 – 8:30 pm

Personal Digital Workflow (2 hrs)
February 7, 9:00 – 11:00 am
February 21, 1:00 – 3:00 pm

Domain Names for Sale on eBay

I have several photography-related and business-related domains I’m selling on eBay. Here they are. Click on the domain name to go to the auction page.

cowboystockphotography.com
cowboystockimages.com
cowboystockphoto.com

idahoinabottle.com

Four Domain Bundle includes alternates and misspellings (bragging page & braggin page)
braggingpage.com
bragginpage.com
braggingpages.com
braggingpages.com

Two Domain Bundle
flashsolo.com & flash-solo.com

Let’s Break Barriers

Let’s break barriers together. There are many barriers to creative vision, from the seemingly impossible variety of cameras and equipment, to software, missing skills and knowledge, and your fears. I offer a wide variety of photography instruction in a classroom setting, one-on-one, or workshop. You can take a full class or mix and match the things you would like specific assistance with, like aperture’s control of depth of field, basic image processing and corrections in Elements or Photoshop (which also applies to Lightroom users), long exposure, or the business of photography, among others. Gift certificates are also available in nearly any amount if you know a friend or loved one who would like to have more control over their photographs. Feel free to contact me with any questions.
Visit blueplanetphoto.com for details and to register and purchase gift certificates.

Let's break barriers together. Photography classes, workshops, and one-on-one instruction.

Let’s break barriers together. Photography classes, workshops, and one-on-one instruction.

Photography Class and Workshop Schedule

Upcoming Photography Classes for November – February:
Classes Direct link

Before You Buy
Basic Camera Operation
Photography 101
Composition 101
Business of Photography 1
The Exposure Equation
Aperture & Shutter Speed
Light & The Light Meter

Upcoming Photography Workshops:
Workshops Direct Link

White Sands National Monument, New Mexico, March 20 – 25
Oregon Coast, April 19 – 25
Columbia River Gorge, Oregon, April 26 – 28
Yosemite National Park, California, May 8 – 14
Tallgrass Prairie, Kansas, June 3 – 8

Soon to be online:
HDR Photography (3 day workshop), Boise, Idaho
HDR Photography, Portland, Oregon,
HDR Photography, Omaha, Nebraska, April 2014
Waterfalls and Rivers of Idaho and Eastern Washington, May 2014
Acadia National Park, Maine, October 17 – 23

Why complain about low fees?

I can understand (a little) when a new photographer or a photographer not educated in the industry complains about being hassled about the low fees they charge or accept from clients. I get it. Being in business is difficult. It’s not like your “hobby days” when you could shoot whenever and wherever you liked, and if you sold a print to a friend or someone at a show for a few bucks it offset some of the cost for equipment or gas, or whatever. It’s actual work, believe it or not. More work than the typical 40-hr-per-week worker puts in because self-employed persons aren’t just working on one or two or three tasks, but 10 or 20 covering a broad range of skill sets from accounting, management, design, interpersonal relationships and networking, to marketing, computer science and other technology, industry trend monitoring and Oh yeah, photography. It takes a lot out of a person who basically relies on their own knowledge and skill to get through the hoops and barriers blocking the way to a paycheck. So, I can understand how it can be easier to simply accept what’s offered and go a merry way on to the next project without spending too much time or effort worrying about price. Who needs yet another hassle to deal with, right?

There are, honestly, a lot of professional photographers complaining about other photographers accepting low fees from clients. Why is that? Is it because those photographers have been used to receiving the cream and now have to fight over the hind teat with someone who doesn’t know an aperture from a lens opening? Are they jealous of newbies getting work without any effort when they’ve been slogging their bones for decades? Are they afraid of losing their lofty position as “The Photographer”, soon to be referred to only as “photographer”? Maybe. But I think it’s really about the lack of industry understanding on the part of the up-and-coming-new-camera-acquiring population of photographers who have a romantic notion of what it’s like to be a professional photographer (i.e. business owner), but little knowledge of what’s actually at stake when taking that “one-hour” $200 job that actually takes three days to complete.

So, here are some hard numbers to ponder when you’re considering what fee to accept when that potential client calls and they claim poverty or no budget when they tell you what they will pay (take it or leave it).

PricewaterhouseCoopers, in their 2013 – 2017 Global Entertainment and Media Outlook report, says global spending for media and entertainment will reach $2.2 TRILLION in 2017, compared with $1.6 TRILLION in 2012. That includes such things as digital media (cable and satellite television, online movies, games, news, etc.). Related to that, and of the most importance to photographers (especially those in the commercial or editorial side of the industry), is that advertising revenue just in the United States is expected to grow 4.1% to $204 BILLION by 2017 compared to $167 billion in 2012 and internet advertising is expected to outperform traditional print advertising with annual gains of about 14%. Print advertising revenues have been declining, with 2012 seeing less than $5 billion in ad revenue. However, the business-to-business market continues to use about 30% of print advertising.

eMarketer estimated that online marketers would spend over $37 BILLION to advertise online in 2012, with Google, Yahoo!, Facebook, AOL, and Microsoft combined receiving $24 Billion of that total. Growth in online ad spending is expected to be in the double digits through 2014.

Granted, not every company that calls will be a Google or Facebook, but they are paying designers, marketers, illustrators (sometimes), publishers, printers, delivery drivers, copywriters, editors, salespeople, art directors, etc. etc. and photography is being used more than ever in all sorts of ways to be the “face” of a product, company, story. The fee you charge should be appropriate to the value the photographs you provide will give to the company using them. Put ego aside and get out the calculator.

When you contemplate the numbers, the BILLIONS and TRILLIONS of dollars spent in the U.S. and globally on advertising, compared to the effort you put in to develop your skills, purchase your equipment, receive a salary for your work, pay your living expenses and all your other business-related costs and expenses, doesn’t it seem a little unfair that those BILLIONS and TRILLIONS in revenue going into someone’s pocket other than yours, is riding on the backs of $200 and $400 and $1000 photography fees?

Think about it.

references:

http://www.pwc.com/us/en/industry/entertainment-media/publications/global-entertainment-media-outlook.jhtml

http://www.iab.net/about_the_iab/recent_press_releases/press_release_archive/press_release/pr-060313


http://www.emarketer.com/newsroom/index.php/digital-ad-spending-top-37-billion-2012-market-consolidates/

http://stateofthemedia.org/2013/newspapers-stabilizing-but-still-threatened/2-print-ad-revenue-continues-to-decline-copy/

http://www.marketingcharts.com/wp/print/b2b-print-advertising-revenues-failing-to-keep-pace-with-2011-levels-24589/

Domain Names For Sale

I have the following domain names for sale. Group discount, make offer.

cowboystockimages.com $400
cowboystockphoto.com $400
cowboystockphotography.com $400
All three domains: $900

braggingpages.com $125
braggingpage.com $125
bragginpages.com $125
bragginpage.com $125
All four domains: $300

idahoinabottle.com $250

flashsolo.com $250
flash-solo.com $250
Both domains: $400

thequeenstreatment.com $250
thequeentreatment.com $250
queenstreatment.com $250
queentreatment.com $250
All four domains: $750