Or: Why Self-Employed People Don’t Get Benefits
Running a small photography business is expensive. Especially in Portland.
I recently had a customer come in to the studio and ask about our print prices. He was genuinely curious to know what went in to our calculations of the price of an 8×10 print. It was a great question.
The short answer is: We don’t have a bankrolled employer making sure we get a paycheck every month. Nobody is paying for our health insurance, sick pay, vacation time, or taxes. Nobody else is making sure we can retire someday. There is no safety net for the self-employed photographer; there isn’t even unemployment insurance. All of these expenses rest squarely on our shoulders, and we have to make sure we charge enough to cover them.
We’re Not Weekend Warriors
There’s an important distinction that must be made between a full-time photographer, and a weekend warrior. There are many photographers out there who do it as a hobby or side-hustle. They have regular jobs with a wage and benefits, or a spouse who has a salary and benefits. They have a nice camera, and take family and senior photos, or wedding photos, on the weekends. That’s great, and I certainly started out that way. But when I see those people under-charging for their work, because they can make a few bucks on the weekend taking some quick family photos, it hurts. They are devaluing the actual cost of being a full-time professional photographer, and causing customers to assume that photography should be cheap, and the products free.
My friend Amy illustrated this point perfectly when she shared this anecdote with me: “My first year of doing business I was a total weekend warrior. I think I grossed $8000 total, and I was thrilled for the extra cash for our family. . .until I did my taxes. All my expenses cancelled out my income, and I realized that I netted zero dollars. I had spent all that time away from my babies and husband working, and I had made nothing. It was so eye opening. I vowed never again to do that to my children.”
When you calculate up all the costs of being a full-time photographer, you see that such a model–cheap and free–is not realistic or sustainable.
If we were to divide up the cost of one of our 8×10 photo prints into 5 sections, we’d label them Overhead, Benefits, Taxes, Time, and Profit.
The first cost to any small business owner is overhead. This covers all the basics, like:
- Paying employees and subcontractors
- Electricity, water, gas
- The cost of goods sold
- Credit card transaction fees
- Subscriptions for software
- Purchasing equipment
- Insurance on equipment, buildings, and liability
- Purchasing or leasing vehicles
- Travel time, gas, and auto maintenance
- Accountants and attorneys fees
- Etc., etc.
After all the overhead is paid, think about all of the benefits that even a New Seasons grocery bagger receives when they get a job. The obvious ones include:
- Hourly wage or salary, with annual raises
- Overtime pay
- Retirement benefits (401K, pension plans, SIMPLE, SEP, etc.)
- Health insurance (possibly including dental and vision)
- Vacation pay
- Sick pay
- Personal leave pay
- Paid maternity leave
- Stock options, profit sharing, and bonuses
Some less-obvious but very valuable benefits that employees also receive include:
- Social Security (The employer pays 50% of the employee’s tax every year, to cover both retirement and disability.)
- Unemployment insurance
- Workers compensation
That’s a lot of benefits that an employee receives, which a self-employed photographer has to find a way to pay for themself. Self-employed people don’t get benefits unless they build the cost of them into their pricing.
Ah, taxes. Small businesses get hit with a lot of taxes. Here’s the list of taxes paid by us, either directly by our business, or indirectly as owners of the business:
- Federal taxes
- State taxes
- 4 Local taxes:
- Multnomah County Business Income Tax
- Tri-Met Tax
- City of Portland Tax
- Portland Arts Tax
- 100% of Social Security tax (as noted above, en employee only pays 50% of their SS tax; a self-employed person pays 100% of it)
- Real estate taxes on all buildings rented or owned, which goes up every year
- Payroll taxes
If you’re still reading this article, God bless you. You are a saint. Taxes are boring to talk about, but they eat up a huge chunk of the cost of every photo print we sell.
But Wait, There’s More…
Another cost that has to be built in to the 8×10 print is all the non-billable hours a photographer spends on things like editing, marketing, traveling, networking, education, answering the phone, meeting with clients, and managing the business. As photographers, we spend far more hours in front of a computer than we do behind a camera. We have to build the ‘cost’ of those hours in to our pricing as well.
When someone purchases an 8×10 professional print for $45, they’re not just paying for a piece of paper with some pixels on it. They’re paying for our 30 years of experience as a professional photographer; they’re paying for the beautiful image we worked hard to create; they’re paying for the overhead, taxes, and hopefully some health insurance and a modest IRA. And somewhere in there, hopefully, we also get to make a profit for all our hard work.
So the next time you’re working with a professional photographer, keep in mind what it costs for them to serve you. A full-time photographer has a hard time competing with weekend warriors who are out to make a few bucks in their spare time, and charge next to nothing for their work, or give away all the digital files for free.
For us, this is our job, it is our living, it is our future. It’s how we buy our kids clothes, pay our mortgage, and put food on the table. And it’s also our joy. We love what we do as photographers, and we hope you love every single image we work so hard to make for you.
Thanks for buying our prints.