FAQ: Pricing
A huge thank you to everyone who emailed me with their FAQ’s! I promise I will get to all of them as soon as I can! :) My most asked question is to do with pricing!
Last night I had the exciting opportunity to team up with my oh-so-handsome hubby and teach a business workshop at our house! (for those in Vancouver, we are working on a venue for a Vancouver workshop as well!!!!) WE covered everything about running your business as a business….from pricing, to taxes, managing cash flow, answering questions on registering your business, incorporating, the new PST laws (for those in BC) and much more! I started it off with a talk about my business, what’s worked for me and how I structure my pricing. Here’s a rough overview on what I talked about!
Pricing. URGH. That’s how I viewed it all the time in the beginning and sometimes now. It’s the part I struggle(d) with the most. It’s challenging, there’s no set guidelines that will guarantee work, it’s scary, it’s frustrating, it’s sometimes downright put your first through a wall aggravating!
I was fortunate enough to team up with my hubby last night for a business workshop! We covered all the boring, but oh so important topics of pricing, taxes, business planning, cash flow management, and much more!! It was a blast to work with Marco! :) My job was to cover pricing and most of what I covered I will touch on here :)
When it comes to pricing, I price step. This is an idea that I discovered I was doing before I even really knew what it was! It was one of those happy flukes that ends up working out. Fear is what drove my stumbling into price stepping! I was too afraid to increase my prices by large amounts, so I slowly raised them by smaller amounts hoping no one would notice.
This is the basic premise of price stepping. Raising your prices in small increments to avoid pricing out of your referrals. People tend to associate with relatively the same socio-economic groups and if you increase your prices by too high of a margin, when your current clients refer you to their friends you will potentially be outside their range of what they can afford for a photographer.
The most challenging part is figuring out when to increase your prices. I have heard so many different theories and ideas on when to increase prices but what has worked and made sense for me is when there is a demand. When you are booking clients on a regular basis at your current prices, or especially when you are at a point where you are so busy you are overwhelmed up those prices! You’ve successfully created a demand for your work and are therefore able to charge more of a premium for it!
To give an example from my own business: When I first started and was just wanting to build my portfolio I wasn’t booking anything at all. Nada. So I posted in a local Mom’s group that I was offering sessions for $40 including all their photos to build my portfolio. From that post I was able to book 5-6 sessions. Yes I didn’t make barely any money, but I was charging what would get me working. What would help me gain exposure, and most importantly it got me infront of clients, working with people, and building my portfolio.
Once I posted those first photos from the sessions, inquiries slowly started coming in, so I raised my prices to $80/session. People still continued to book and inquire as I posted more sessions, so I stepped it up to $100, then $150 etc. By the end of my first year I was charging $200 a session. By the end of my second year I had stepped it slowly ($25-$50 per step up) to $350 and by the start of this year have stepped it up to $425/$450 per session.
After every price step I have noticed a slight lull in booking and I definitely have gotten the occasional “darn, that’s more than we were hoping to spend” but I am so grateful to say in the long run price stepping has worked for me! It has provided me with a rough framework for increasing my prices, helped me reduce the fear in raising my prices, and has helped my business grow!
My last two pieces of advice when it comes to pricing are:
1. Don’t be afraid to lower your prices back down. If a price step is too large, or just isn’t working (after waiting it out awhile) don’t be afraid to lower your prices, or keep them the same but offer more within that package. There is no shame in taking a risk and having it fail…that’s how you grow, it’s how you learn. I definitely had a few price increases along the way, or package re-organizations that simply did not work. That’s the worst that can happen! So I reworked them and moved on from there!
2. Don’t get caught up in what everyone else is telling you to charge! I had this problem in the beginning, and even a few times throughout. I would see what other photographers were charging and get nervous, or yes even sometimes jealous. Focus on your own business and what is working for you! Everyone’s business is unique to them, and how they run it will differ significantly. What they charge may not be right for you, or how they work their packages may not be right for your clients. Do what works for you, use trial and error until you figure out your ideal system and run with it! Those who give you flack for that and put you down for how you run your business and for what you charge, obviously have too much time on their hands and aren’t worth your worries!
Again thank you so much for everyone who took the time to write in their questions!! I LOVE getting them so keep em coming! :)
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