Why is wedding photography expensive – Making a profit
Making a profit is what every business tries to do. Sort of!! We want to make just enough so that we don’t pay too much tax. As a Sole Trader, I pay tax on the profit I make. This comes out of my personal tax allowance so I try and keep that profit below the allowance. for 2015 / 2016 tax year the personal allowance is £10,800. I will only pay tax if my profit is over that amount.
I’m lucky in that photography is actually an expensive business to be in due to the cost of the kit I need to buy. Add in the cost of wedding albums where clients want those and I will seldom make enough of a profit to pay tax, or when I do pay tax it’s at the 20% rate. (Yes, the cost of equipment, training, insurance, wedding albums etc is all classed as a genuine business expense.)
I have to make a profit of over £42,000 to pay tax at the 40% tax rate.
Why is wedding photography expensive? Because we run a fully legal business
Some suppliers are NOT running a legal business. They have a primary job and have a secondary job. They don’t declare to HMRC the income from the secondary job meaning they don’t pay tax on it. Which means they can charge much much lower rates. That means they are also ripping off the country – The NHS, Defence, Transport, Education, Pensions, Benefits etc and all the wonderful things that the Government uses tax to pay for.
What I am saying is that they subsidise their secondary income (the wedding business) by using their primary income; meaning there cost of sales are much lower; and can charge much less. What this really means in practice is that they are loosing money, but just don’t realise it.
I’m NOT saying that every supplier charging low prices is an illegal business by the way – by no means am I saying that.
Why is wedding photography expensive – Losing money and not realising it
Yes – you read that correctly. If you are running the photography as a sideline / second business and you don’t charge enough to cover your business expenses you are losing money. How does this work?
Take a wedding photography business who offers the following:
- All day wedding photography
- Two photographers
- USB of edited images
- Only £400
So, let’s break this down.
All day wedding photography = 12 hours on the day usually. 8am bridal prep to 8pm first dance.
Two photographers = 12 hours x 2 = 24 hours of work.
USB of edited images…several parts here. USB costs, postal cost and editing costs
USB cost = £5
Postal cost = £5
Editing costs are tough. How much editing is done, how many hands editing, how much retouching, skin smoothing, teeth whitening, colour correction, cropping etc. Let us say 6 hours editing for one person.
So we have a total number of hours at 30 hours plus £10 physical costs from a price of £400
£400- £10 = £390
From that £390 the photography business needs to pay business costs…new cameras, new lenses, new batteries, new flashes, training, website, travel costs, business insurance etc. AND pay a living wage to the two people doing the work. So they end up using the other job (usually a full-time job) to subsidise the cost of the photography. They will be telling their partners, wives, husbands etc that they are investing in the future, art and all the other crap. Essentially they are costing their household money when they do this. If that photography business doesn’t make enough profit to buy a new camera when the other one breaks… the money has to come from somewhere doesn’t it?
The numbers just do not add up…
A new professional-level Canon / Nikon camera (Canon 5D Mark 4) costs around £3.5k; both of those photographers should have two each as a minimum. £14k in camera costs every three years is £4666 per year on cameras or £338 per month. Even if those two photographers split the £390 equally that’s only £195 per month. So they need TWO weddings a month to just pay for the cameras, let alone lenses, flashes, insurance, website, travel costs etc WITHOUT MAKING A PROFIT.
- Business insurance costs me £400 per year (or one wedding to the example above).
- Fuel costs for me are around £4000 a year (or 10 weddings to the example above).
- Software costs are a measly (!!) £300 per year (or just under one wedding on the example above)
- Website hosting (high speed, professional, backed up etc) are £360 per year (or just under one wedding on the example above)
So you think about it. £400 for two wedding photographers. Do the numbers add up or is this couple running a sideline business and cutting more corners than a circle? Are they insured? Do they have backup cameras? Do they have backup IT? Do they have multiple off-site backup storage for your wedding photographs going back every year they have been in business?
Does that example sound too good to be true?