Stop Guessing: The Financial Reality of Pricing Your Photography
Bozeman is a magnet for creative talent. We live in a place that practically demands to be photographed or designed. The landscape inspires architects, and the lifestyle attracts digital nomads. But there is a disconnect we see in our bookkeeping practice every day. We see portfolios that look like National Geographic, but bank accounts that look like a hobby.
The problem is rarely the quality of the work. The problem is almost always the pricing strategy.
Most creative professionals start their pricing journey by looking at their neighbors. You browse the websites of other local photographers. You look at their package rates. You decide to charge slightly less to be competitive or slightly more to appear premium.
This method is dangerous.
When you copy a competitor’s pricing, you are assuming they have done the math. You are assuming they are profitable. You are assuming they are not funding their business with a credit card or a spouse’s income. If you copy a business model that is losing money, you will simply lose money faster.
It is time to stop looking outward at the market and start looking inward at your ledger. Pricing is not an art. It is a math problem.
The Cost of Doing Business
To run a sustainable service business, you must calculate your Cost of Doing Business (CODB) before you ever put a price tag on a wedding or a brand shoot. This is your baseline. It is the amount of money you must generate just to keep the doors open and the lights on.
Your CODB includes two distinct categories.
First, you have your fixed business expenses. These are the costs that exist whether you book a client this month or not.
- Liability and gear insurance
- Accounting and legal fees
- Software subscriptions (Adobe, client management systems, gallery hosting)
- Website hosting and domain fees
- Studio rent or co-working space fees
- Internet and phone bills
Second, you have your variable costs and depreciation. This is where photographers often lose the plot. Your camera body has a shutter count limit. Your lenses need calibration. Your computer will eventually become too slow to process 50-megapixel raw files.
You are not just buying gear once. You are slowly consuming it with every click of the shutter. You must factor in the replacement cost of your equipment. If you need $15,000 worth of equipment every three years, that is $5,000 a year you must earn just to stay operational.
The Salary You Actually Need
You are not a volunteer. You are an employee of your own business.
Many creatives treat their personal income as the "leftovers." They pay their business bills and take whatever remains. This is a recipe for burnout. You need to determine your desired salary first. This number needs to cover your personal rent or mortgage in Bozeman, your groceries, your health insurance, and your retirement contributions.
Be realistic. If you need $60,000 a year to live comfortably, that is a non-negotiable line item in your business budget.
The Tax Reality
In Montana, as in the rest of the US, the tax burden on self-employed individuals is significant. You do not have an employer withholding taxes for you. You are the employer.
A safe rule of thumb is to set aside 30% of every dollar that comes in for taxes. This covers federal income tax, state income tax, and self-employment tax.
If you charge $1,000 for a shoot, you do not have $1,000. You have $700. If you spend that $1,000 on rent, you are effectively borrowing from the IRS. They will eventually come to collect.
The Myth of the 40-Hour Week
This is the variable that breaks most pricing formulas. You cannot bill for 40 hours a week.
If you work a standard 40-hour week, you will spend a massive portion of that time on unbillable tasks. You will be answering emails. You will be marketing your services. You will be driving to locations. You will be updating your portfolio. You will be doing your own bookkeeping.
For a photographer, the ratio of shooting to working is often lopsided. A two-hour portrait session might require one hour of travel, one hour of culling photos, and three hours of editing. That two-hour shoot is actually seven hours of work.
Most successful freelancers find they can only bill for about 20 hours a week. The other 20 hours are spent running the business. If you price your services assuming you will bill 2,000 hours a year, you will fall short. You should calculate your rates based on billing approximately 1,000 hours a year.
The Formula
Now we have the components to build your minimum hourly rate. It looks like this.
- Total Annual Expenses: Add your Business Overhead + Equipment Replacement Fund + Desired Salary.
- Tax Buffer: Multiply that total by roughly 1.3 to account for the taxes you will owe on that income.
- Billable Hours: Estimate the realistic number of hours you can shoot or design in a year.
Divide the Total Needed Revenue by your Billable Hours.
If you need $80,000 (salary + expenses) and you want to account for taxes, you might need to gross $105,000. If you can honestly only bill 1,000 hours a year, your minimum rate is $105 per hour.
This is not your "profit" rate. This is your "survival" rate. This is the absolute floor. If you charge less than this, you are subsidizing your clients out of your own savings.
Constructing the Package
Clients generally do not like hourly rates for creative work. They prefer certainty. They want to know exactly what the wedding or the architectural shoot will cost. This is why you build packages. But you build them using your hourly math.
Let’s look at a standard wedding package.
You might offer 8 hours of coverage. That sounds like an 8-hour day. It is not.
- Pre-production: Client meetings, timeline planning, gear prep (3 hours)
- The Shoot: Coverage plus travel (10 hours)
- Post-production: Culling, editing, exporting, uploading (15 hours)
- Deliverables: Album design and revisions (4 hours)
That "8-hour wedding" is actually 32 hours of labor.
If your calculated survival rate is $105/hour, the base cost of that package is $3,360. That covers your salary, your taxes, and your overhead. It does not include the cost of physical goods like albums or prints. It does not include a profit margin for business growth.
If you are currently charging $2,500 for this service because that is what the photographer down the street charges, you are losing money. You are working for less than minimum wage once the overhead is stripped away.
The Confidence to Say No
When you guess at your prices, you feel insecure during negotiations. If a client asks for a discount, you might cave because you fear losing the job. You think some money is better than no money.
When you know your numbers, the psychology changes.
If a client asks you to lower your price below your calculated floor, you know that saying "yes" actually costs you money. You can confidently explain your value. You can say that your rates are based on the time required to deliver professional results.
You move from a mindset of "please hire me" to a mindset of "this is what it costs."
This shift filters out bad clients. It attracts clients who respect your professionalism. It ensures that when you are working, you are actually building a future rather than just churning through cash.
Your art deserves to be seen. But your business deserves to be solvent. Stop guessing. Do the math. And if the math is scary, that is exactly why you need to see it.