Pricing. It’s a subject which can be tricky, especially among those who work for themselves.
Working in the civil service, I benefited from a wide range of terms and conditions. I didn’t really appreciate quite how many at the time.
My salary covered the days I was at work, and also the days I had available to book as annual leave. If I was off sick, I was paid. If I travelled for meetings, I was paid for the travel time and expenses. The staff canteen was subsidised, and I could claim back (within reason) what I spent on sustenance while working away. Equipment such as desktop computers, laptops, work mobile, stationery, and office furniture was provided. Office overheads such as telephones, water, electricity, and insurance were taken care of. Taxes and National Insurance payments were deducted automatically, and I was part of a pension scheme. Career training and development opportunities were funded, and I could work towards extra qualifications. I had support in my role from human resources personnel, information technology teams, and financial experts.
Reading back, it was quite a list! The reason for detailing all of these elements is to highlight some of the benefits of a salaried role within a large organisation.
As a sole trader, I don’t expect to receive anything like the level of benefits which the civil service offered. However, I am still working hard and trying to make a living. Some of the essentials which I need to fund include studio bills, business insurance, equipment – both specialist photographic equipment, and general office supplies.
Add to this list the bills I have to pay at home such as household utilities, mortgage, insurance, and food. These are outgoings which I have had for much of my working life, but the difference now is that the household bills and the work bills are all paid from the same income. The service I offer requires mobility, so vehicle running costs and maintenance also form part of the calculations. As a new start up, pension plans, annual leave, and sick pay are all things which would be nice to have but which are not currently part of my financial structure.
Then we come to the service. People pay for my time and my skills in taking photographs. They then pay for hard copies or digital images. In some ways, this is the ‘easy’ part of setting the charges. This is the part which people see and understand. They don’t see the extra time of arranging each shoot, preparing for the session, processing pictures, and arranging a final follow up meeting. Indeed, part of my job is to run a smooth business which offers customers a relaxing experience, and they shouldn’t have to worry about what goes on behind the scenes.
The charges so far do not include any profit, which is the element which might be used towards non-essential items such as leisure activities and pursuit of hobbies. The ‘nice to have’ things, which are areas where the first efficiency savings are usually made.
There’s a lot to consider, and I have met a number of art and design professionals who worry about their pricing structures. They fret that they are setting their prices too high. They forget that they are working to make a living from their craft, rather than making some extra money from a hobby. The prices they charge for service provision are not just paying for that service. The prices come together to provide a salary for the professional who is delivering the service.
If you worry about your own pricing, set some time aside to think about everything your income pays for. Then remember that what you charge each customer is a part of your income. You’re working to make a living from your profession and people who pay for your services will understand this.