Rates:

Setting rates seems to be a matter of many issues between models and causes much confusion. There are three basic factors that should come into play when deciding how to set you rates. I will try and explain these in the most simple terms possible, to aid in removing some confusion.

Factor #1: Your Personal/Business Financial Situation:

You will need to learn how to budget or if you suck with numbers, then perhaps hire someone to build you a model. I cover the basics here, but I really am not interested in being a math tutor. If you do not understand this part, then just hire someone once who can figure this out for you.

Anyone who has expenses needs a budget, but when you have your own business this is essential. Just in case you did not realize, modeling is your own business, as you are an independent contractor. You are required by law to claim taxes for it, once you surpass $20,000/year, though many people find ways around this.

To go about your budget, you will need to know five key factors: your personal expenses, your set business expenses, your variable business expenses, any other sources of income and the average number of shoots you have per month.

If I am unsure and take an educated guess on any numbers, I find it is better to over guess on expenses and under guess on income. It is better to end up with more money then intended, than not to end up with enough.

Whether you claim taxes or not and whether or not you only do this for a living, will change some things from a personal expense to a business expense. For example, this is my only job and I do claim my taxes accurately, so rent and groceries are partially business expenses for me, instead of personal expenses.

To get your personal expenses: add all expense that are not business related, such as monthly savings or investments, cable tv, groceries, partying, rent, cigarettes, ect

To get your set business expenses: add all set expenses, such as phone, internet, portfolio site subscriptions, ect

To get your variable business expenses: add all variable expenses, such as clothing, props, salon, computer supplies, printing costs, travel, ect. I figure out my variable expense by dividing my yearly expense from last year by 12, how you do this is up to you.

To get your average number of shoots per month: I divide last year's number of shoots by 10. I do not divide by 12 because I know I do not shoot at all in December and usually January as well. If I do end up shooting then it is a bonus.

To figure out your other sources of income: This would be the income you get through either another job, child support, government assistance, ect.

Once you have all of these numbers, you have all the numbers you need to get close to figuring out your rates. Here is the basic very simplified formula of what you need to do:

Personal expenses + set business expenses + variable business expenses = expenses
Expenses - other sources of income = remaining expenses (in my case other sources of income is $0, so I skip this step)
Remaining expenses / # of shoots = BASE FEE

Base fee is the lowest possible amount you should make per shoot, to cover all expenses. Let's say for the sake of this example, that your base fee ended up being $100. That would mean that each shoot you should be making at least $100 to pay your bills. Keep this in mind for the other two factors. I will go back to base fee at the end of those factors.

Factor #2: Your Market:

The areas you live and work in, have a huge effect on what you can charge. Your area will have it's own market and demand for model services. As well, it will have a general area of rates that people will stay between. Your experience is valuable, but many times people will pay for girls with less experience who are cheaper. Not everyone understands the value of an experienced model, though the better paying ones usually do. If your rates are much higher than the other models in your area, it is very likely that you will get very little jobs. If you rates are far lower than the other models in your area, then other models will not like you and some photographers may question why you are charging so little. In Ontario, we have a decent market but we are no LA.

Factor #3: The Company You Are Quoting For:

You must take into consideration who you are sending your rates to. If you are a household name, like Heidi Klum, then you do not need to be flexible on your rates. Since household names have never heard of me, I assume they would not be reading this, so I will assume you are just a regular model. The fact is, some companies have higher budgets than others. Depending who you are quoting for, you need to be able to adjust your rates accordingly. I quote some people much higher than others, bases upon their financial standing, not because I am greedy but because I know they are paying other girls higher. Often times, I have gotten offer rates higher than my general rates and other times people have asked to negotiate lower prices.

Your Rates: How It All Adds Up:

Firstly, if you base fee ended up being something ridiculously higher like $2000/shoot, then you will need to make some adjustments. Either, you will really need to work on getting more shoots per month or you should consider getting another job. Personally, I would consider a combination of both, such as a part-time job and increasing your visability to get more work.

Second, you will many times go over your base fee and this is expected. The base fee is just the amount that you MUST make to cover all your expenses. It is not what you should be charging, it is the lowest negotiating number you should use. In reality, you should be making more than your base fee on most shoots, so that you have additional saving or spending money. This is the profit that your business makes.

Third, even when negotiating your fees with lower budgeted shoots, try not to go below your base fee. If you are really interested in a project, never go less than $50 below your base fee as it will have to be made up on another shoot to cover your expenses. Try not to do this often, or you will not end up making any profit that year.

Fourth, many times people will offer you a rate without asking for a quote. This is a double edged sword. It is good when they offer you more than your rate, but it can be bad if they offer you less. If it is more, then no need for consideration, just take it. If it is less, consider how it is in relation to your rates and your base fee. If it is still acceptable, as in below your rate but above your base fee, then you should consider it, or at least negotiate it. If the offer is less then you base fee, then you should either decline the shoot or explain the lowest you are willing to go (your base fee).

Your Rates: Time to Make an Outline:

Okay, so now that you have all the facts, it is time to make your outline of rates. In reality, almost all of my rates are above my base fee. This is based on my market, my experience and the demand.

I hope this was somehow helpful and understandable to some people. If you want to run your price list past me for my opinion, that is fine with me
Hugz,
MM