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Thoughts About Value And The Cost Of Doing Business

by 4 Comments

Donald Giannatti shares his views aobut Value and The Cost Of Doing Business.

Recently a photographer shared a little CODB calculator created for other photographers. It was based on time and materials and an hourly rate for the shooter.

I thought it was terrible, and tried to explain why. I thought I was pretty good, but so many folks thought I was saying NOT to have any idea of what your business is costing you that I am taking this opportunity to explain.

Abacus

CODB (Cost of Doing Business) calculations are a good idea to find out what you need to make per month to break even or make a profit. They suck at helping photographers determine their rate. Let me share why.

I do indeed think that knowing exactly how much it costs you each month/year to be in business is a sobering and very powerful base for figuring out costs.

But costs are not value.

Cost are not art related.

Costs are simply price per… hour/piece/day… and do not take into consideration the intangibles of the value of the art.

So knowing that it takes $2167 per month to break even for a photographer is good and solid information.

How one quantifies next either makes it a powerful tool or an irrelevant gimmick.

Do you then plan on 10 gigs at $216.70 to break even? Or five gigs at $432.40?

If you think that is gonna work, I can sell you a bridge that is far more lucrative.

Does it mean that one edtitorial gig that pays $1345 and you are 3/4 to your goal? Or that a nice brochure shoot that nets $4500 takes you through next month?

NO.

Gigs don’t come in like that, and trying to figure assignment work into modules of this and that and some other thing is counter-productive and soul killing.

And it begins to take a toll on one’s bidding process too. Suddenly it is about the metric and not the value.

My work, and your work, has a value attached that is not figured into a CODB way of working. My value add to the work is personal, and it is based on the artistic ability and worth that I bring to the work.

Pricing a 5×7 at $15 is beyond my understanding. My image is worth more than that… i don’t care about the real estate or the square inches of paper it takes up.

Modular and boxed in thinking.

Know what you need to make, then get out there and book the gigs based on the VALUE your work has brought to the assignment.

Not what a CODB analysis says on a spreadsheet. Focusing on ‘sales’ instead of value misses the point.

Value is always more important than price.

About The Author

Donald Giannatti (AKA Wizwow) is a photographer and a graphic designer based in Phoenix, AZ. You may already know him fro mthe great Lighting Essential blog where he discusses style, lighting and “Going Pro”. If not It is definitely worth your time.

Photo (CC-BY-NC) by Andreas Rodler

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  • Kay O. Sweaver

    Please expand on your thesis, preferably with examples, because otherwise this article doesn’t much say.

  • Pag

    One thing I realized recently is that while it’s hard to evaluate how much you should charge, there’s no way your client has a more precise evaluation of the value you bring. If it’s hard for you, and it’s what you do all day, then it’s much harder for the guy hiring.

    In the end, pricing becomes very subjective and an approximate process. Your client has a need and a budget. Answering that need within his budget is what gets you the job, not whether you’ve calculated your CODB precisely. Your CODB is the minimum you can get while staying in business, it shouldn’t be what you’re ultimately aiming for.

  • Michael Turcotte

    Back in the dim reach of time I read a sci/fi story where a minor point was being made by one trader training his apprentice. “There is Value, Price, and Cost. First talk Value, then talk Price.” Cost doesn’t really come into the discussion with the customer. Price your service based on value not how much it costs you.

  • sbode

    Unfortunately there are a lot of photographers out there ( many are startups) that really don’t offer much value at all. Therefore they price accordingly. In a way this blemished photography as a profession since (at least initially) consumers really don’t know who to hire.

    I know a photographer who constantly complains that people don’t value his photography yet he has done little to improve the value of it over the years.

    Value is in the eyes in the beholder. As photographers we need to be sure we have 20/20 vision concerning the value of our own work.

    What you say is pretty accurate.

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