I decided to move the updates from the post on “How Much Money Do Commercial Photographers Make?” here and add a few more that have been submitted:
My individual gross revenue* from assignment and stock photography was $362,000
I had $57,000 in out-of-pocket assignment expenses*
I had $120,000 in fixed overhead* costs
My net profit* on my photography was $185,000 ($362k – $57k – $120k)
I’ve been in business for 24 years (started out as a photojournalist working for newspapers and wire services, now I shoot portraits for magazines, corporations and ad agencies). I share facilities, staff, equipment, supplies and insurance with a number of other photographers. The number I quote above was my share of the fixed overhead.
While it’s useful to know what “the budget” is for a particular project, and to know your “cost of doing business” as background when you’re putting together an estimate for a job, those numbers don’t have any impact on the value of a project for a particular photographer. They simply determine whether the photographer is going to be too expensive for the client, or whether the job is going to be too cheap for the photographer.
The value of commercial photography is dynamic. It changes moment to moment, and varies widely depending on who the client is, how unique the photographer is, how busy the photographer is, how badly the client wants that photographer, how badly the photographer wants the project, how much time, energy, and money it will take to accomplish, and of course what the usage is. A smart photographer is going to take a fresh approach to each estimate, just as they would expect to take a fresh approach to the assignment itself.
gross revenue* is the total amount of money you collect in a given tax year
out-of-pocket assignment expenses* are your actual costs for subcontractors, travel, props, rentals (that are specific to an assignment)
fixed overhead* are the costs for your rent, utilities, business insurance, supplies, portfolio, advertising, accountant, etc.
net profit* is what’s left over after you pay all of your business expenses in a given year – it’s what you pay income tax on
2009 kinda sucked, I made 30% of 2008!
My billings were $90,000
My net was $54,000
I am an advertising & editorial photographer, lifestyle & portraits
stopped assisting in 2002, so been in biz 8 years.
2010 is starting out much better……… knock on wood.
as a commercial photographer who has made between $600,000- 1,000,000 in fees every year for the past half dozen years, i think there are aspects of how you run your business to keep it lean and minimize overheads. as previously talked about, running a corporation allows you to fund and write off capital investments, cars, flights, employees, production and even some ‘entertainment’ pre tax. so it becomes very difficult to judge the true bottom line of where your company expenses end and where your personal income begins. the lines are perfectly and legally blurred. so determining your actual salary is not an exact science.
again, as stated, we all try to make it look as though we make as little as possible and write off as much as is legal, but be for warned, when you then go and try to buy your 2 million dollar dream loft in tribeca, it will really work against you as although your company has billed much, your personal salary will appear to be much smaller. this is a good catch 22.
keeping it lean and not ‘doing an annie’ is critical. for example, i run a still life studio where we have preagreed flat rate fees on studio, cameras, digital capture. so if i use 1 flash head or 20 it is the same price. clients love it cause there are no surprises, but i love it cause there is no cataloging of what was used. no studio manager spending endless hours logging in equipment and then making invoices. people cost money.
i also suggest not doing your own production. in my experience, there simply is not enough of a margin to be made (if at all these days) in doing production and it is a waste of a photographers time to attempt to suck 10-15% out of a budget. you are a photographer. be a photographer. if you are making 50K fees on an ad job and the production is say another 50K, it is simply not worth trying to make another 5K out of the production. as you are holding a lot of overhead which if it goes wrong and/or over budget, you and your business will be held responsible. not to mention the headache. production is for producers.
I am a commercial photog in Brooklyn shooting editorial, publishing, some advertising and now doing video producing with partner. I have been in business for myself for 6 years. I do not have a studio, or employees, so overhead is fairly low. I still feel like an “emerging photographer” :) This year has been better a bit because of video work, which is new to my business.
2009 – gross fees: $113k, net will probably be 40-50k – hopefully I can get all my deductions so I am not taxed crazily. I am not incorporated. The past few years have been approx gross 70k fees and net 30-50k.
Photographer 1, fixed overhead seems huge. 120k for rent and a staff shared with other photographers?!?!? There has to be a way to cut that way down…
With out knowing the market they are in, that could be cheap! Primary, secondary, and tertiary markets all have different Costs of living. Add to that, 1 primary market can be different from another.
Just look at what square footage costs in Manhattan compared to LA.
And, we don’t know the size or experience of the staff being shared, nor the number of photogs splitting the bill.
Why does all this remind me a little of one of those ishotmybeaver amateur porn sites? But without the beaver reward.
Just thinking more or less the exact same thing. I guess it drives the hits. Or maybe it’s the Cosmo/Men’s Health model – sex positions your partner will enjoy/how to lose weight in 30 days.
Coming next week: 1 more anonymous photographer tells us his income 4 years ago! Quick, everyone discuss the changes in between.
I want to know how to get the attention of those that hire commercial photographers. What stock agency are you with?
Thanks for the interesting look at the subject of photographer’s income and for the follow up. During challenging times like this it’s good to know that with hard work, talent and patience there is still potential for a photographer to make a living doing what he or she loves.
Now we’re getting somewhere. Finally a few numbers that sound more in line with us regular types. It would be instructive to see how the businesses are set up. The last indicated sole-proprietor which is how I file. My accountant has repeatedly advised me against LLC or other such permutations.
Photographer business advice– Get a good accountant. A good one is not someone who only gives you good news!!!
Hey Paul! funny seeing you here lol..
(I’m an ASMP SE member in ATL, I doubt you know me lol)
Great to see these kinds of real world numbers… but hard for someone like me (one who has yet to do any significant business) to relate.
Why were you advised against LLC?
Not really sure why your accountant advised against protecting yourself from lawsuit. You might want to find someone who specializes in our field.
I just wonder how many have done a very thorough business plan/then if it has been a while why hasn’t it been updated. If a plan is over, I would say four years, then it needs to be updated. When you do the market analysis you should have an idea of whether you are operating efficiently or not.
I think the first guy has tight control on his expenses and also part of his expenses could be dividends paid. The net is nice number but is it after taxes?
I look at photog #4 and all I see is someone that needs to have more control since he is not sure he will be able to deduct certain expenses. A relationship with a good accountant is important. Then again if business owner uses a program like quick books why wouldn’t the deductions be there? Also photog #4 may be able to make more with a studio. I am just guessing at this point, I would think that at least where there is a coop studio available it might be something to consider, and for all I know he may be doing just that and it may be time to find his own. JMHO.
I say all this after attending the California Pro Photo Expo meeting and seeing a small smattering of the competition. I think there is a lot of business out there that can be won by exceptional craftsmanship, and great marketing. My weak point is marketing, I am fortunate though to have someone that is great at marketing, and I can learn to be better at it.
Thanks for this post. It’s funny how little discussion exists out there regarding $$$
I think having yourself as an LLC or a S corporation is important. My accountant had me change over to an LLC so I can contribute more to my retirement account. My financial manager set-up a “my 401” account and I’ve been maxing out every year at close to 50K in contributions. That is divided between the LLC contribution and personal contribution. This has been a major success for me.
Also, young guys and gals, start contributing to your retirement accounts now. Every penny that you can even if is just a ROTH account. Time is your greatest ally when planning for the future. If you want to go low cost look at the Vanguard funds.
@Bruce, LLC depends completely on the state you operate in.
For example, California literally despises LLC and makes you pay for it through extravagant taxes and paperwork.
A few years ago, the operating tax alone was over $1,000. To me that’s a new shiny toy. Can’t imagine what it is now with all of the tax hikes in California. I’m sure this isn’t the only state who won’t recognize LLCs too.
I live in the East and my state is a little more pro business than California. My yearly cost for my LLC is $100.00. There is hardly any paperwork associated with the LLC. However, I do have personal property tax to pay and a gross receipts tax payable to my county but that would apply to an S, LLC or sole prop.
Each state is different. Just because California is difficult does not mean that it is not worth pursuing. Putting 52K away a year for retirement sure beats less than 20K in a SEP.
I’m glad you keep posting these, Rob. There’s a good lesson in there, that even in these so-called “tough times” photographers can still make an assload of money (compared to regular working stiffs who hate their jobs). Maybe if more people see this the panic will die down a little and all the jokers out there will stop desperately trying to underbid one another.
@Anthony, I concur with your point on photographers underbidding each other. In a down market too many photographers panic and rush to undercut the competition. This results in the devaluation of what we offer as services.
If you give a client a big discount in a bad economy or for any other reason they are highly unlikely to offer you an equal increase in your fees once the economy gets back on track. There has to be give and take, fair compromises must be made during tough times. Communication between photographer and client is key but somehow we don’t seem to have that kind of communication between photographers resulting in ridiculous underbidding.
James Warden as best as I can remember, my gross sales numbers are at a level that in the long run will cost me more for reporting and accounting than the benefit I can get from LLC or S.
It is apparent from the other responses that the decision varies from state to state.
@Paul O’Mara, My accounting costs as an LLC are no more than my accountant charges were as a sole prop.
@Paul O’Mara, Yeah it can add up. In Illinois it’s $750
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Is there a photo editing program that contains templates, frames, filters, etc. that I could use to enhance my own photos before I sell them. I have Microsoft Digital imaging suite, but it retains all of its copy rights.
Thanks for your help.
Christy in Maryland
Anyone have advice for a young fellow wanting to make a living in advertising photography. He has a certificate from New England School of Photography and has been working for a studio doing wedding shoots and various other portrait-type work. Considering applying to Academy of Arts U in San Fran. Is it worth the huge debt he will build up? Will this school help him achieve his dreams?