Advertising – While it is nice to get referrals from existing customers, typically that don’t bring in enough revenue to support a sustainable business. Advertising is expensive. Web advertising can range from $100 per month for a small photographer, up to a few thousand dollars a month for a larger photography company. Other advertising costs include print ads, ads on event planning websites and Google AdWords and other pay-per-click advertising. At any rate, you can be assured that 99% of professional photographers spend a considerable amount on advertising which has to be paid for.
Taxes – Just like anyone else, photographers pay taxes on their income. Not only do they pay income tax, they also have to pay sales tax. For school photographers, event Kauai photographers and youth sports photographers it is really cut and dry, you pay sales tax based upon the tax rate for the area in which you shoot. For our studio, that is Temecula, the Inland Empire, Riverside County, Orange County and San Diego County, basically all of Southern California.
That takes an average of 8.75% of their fee right off the top of the sales amount. In some cases, in many areas of the country, California included, wedding photographers are required to pay sales tax even if they are charging a flat fee for their service. Many photographers think that sales tax doesn’t apply to “photography services”, like wedding photography or event photography where they get paid a flat amount. In most cases they are wrong and can run into trouble with the government if they do not comply.
I personally know of a case where a San Diego event photographer did many of her events for a flat fee and thought she didn’t have to pay sales tax. When she was audited, she had to pay sales tax for a considerable amount of her previous events, which nearly put her out of business. Think about that when you are considering a photographers price, as much as 40% in some cases could be being paid in taxes! So if you are paying someone $1000 fee, as much as $400 of it could be going to the government.
Equipment – Professional grade, DSLR camera bodies cost as much as $5,000. Lenses are typically more of a cost for a photographer because they need many of them to get the right shot. There are special lenses for portrait photography, event photography and all sorts of specialty lenses that photographers carry in their bag to make sure they have most potential shots covered. Professional photographers’ lenses can EASILY cost $1,000 or more. Some lenses can cost as much as $5000 or more depending on the type of photography they are designed for. Professional sports photographers’ lenses are a small fortune.