Welcome!
. . . and thanks for taking the time to participate in this brief workshop covering business practices for professional photographers. The person who will be speaking with you today is a working photographer and a member of OutreachEP, the educational arm of EP, or Editorial Photographers. EP was started in 1999 by a small group of editorial photographers in the San Francisco Bay Area who discovered that a common client was reusing their work without permission and without additional compensation. Despite photographers' normal reluctance to share information with each other for fear of "colluding with the competition", these photographers organized an on-line forum for the purpose of discussing business issues and began working to negotiate change in the industry, one client at a time. That forum, now known as Editorial Photographers, is currently over 3000 members strong and can be found online at www.editorialphoto.com.
One topic that continually appears on the forum is the importance of sharing information with as many photographers as we can in an effort to strengthen our industry. An online venue is a wonderful technological tool that has enabled a tremendous sharing of information, yet not everyone goes online or has interest in belonging to a forum. That is where OutreachEP was born. We are a group of EP members, all working professional photographers, who have experience or interest in sharing information, in person, one group at a time. Our goal is to speak with as many photographers as we can, both working pros and those just starting their careers, to offer suggestions and insight, and hopefully help you to avoid repeating some of the same mistakes we made. To borrow a phrase, we hope that those who are aware of history won't be doomed to repeat it. We are not a union, nor are we asking you to subscribe to any principles, practices, or prices. We are merely offering information that we found helpful in our careers and are hoping that you will also. By helping to establish higher business standards among the industry as a whole, we hope to raise the bar for all of us.
After the program, please visit the website at www.editorialphoto.com for a wealth of information regarding rates, copyright, paperwork, publisher's contracts, software, location information, and many other useful topics. There you will find answers to many of your business-related questions. If you are a working editorial photographer, assistant, photo instructor, or photo student, we invite you to join our forum: http://www.editorialphoto.com/register/ and take part in an extraordinary sharing of information that is working to change our industry for the better, both for our clients and for ourselves.
A Short List of Business & Contract Terms for Photographers
Assignment - an agreement between a photographer and a client whereby the photographer shoots to the client's specifications and agrees to certain uses of the image(s), in return for a fee plus reimbursement of expenses. All assignments should be confirmed with a signed contract.
Copyright - the legal concept that once an original expression of a creative process is fixed in a tangible medium, that expression belongs to the creator (not the person paying the fee) who has the exclusive right to control and authorize its reproduction, distribution (by sale, rental, lease, or lending), public display or performance, or derivation. (US Code, title 17, sec. 106)
Cost-of-doing-business (CDB) - this is the amount of money that is required for you to operate your business, regardless of your number of clients, and is generally expressed as an amount per day. To find your CDB, add up all of the factors that make up your yearly overhead and divide by the number of days you are "open for business" in a year. 250 days is a standard number (5 days x 52 weeks - 2 weeks vacation), but not very generous. Remember, this is what it will cost you EVERY day and may or may not include your salary (depending on how you figure your overhead), yet you cannot expect to earn income every day, unlike a salaried employee who earns a regular paycheck.
Creative fee - this is the fee that a photographer charges for concepting and creating images and takes into account creativity, experience, degree of difficulty, specialized equipment, and perhaps usage (although usage may be a separate line item). This term reflects photographer's desires to be paid based on our experience, our ability, and on the benefit gained by the client from using the fruits of our creative processes, rather than simply on how long we work.
Day rate - an out-of-date term that use to signify the minimum amount a photographer would be paid when shooting for an editorial client, with additional money owed if multiple images were used or if images were used particularly large (see "space rate"). The term has come to mean the flat rate that photographers are offered for shooting for a publication, and disregards experience, ability, degree of difficulty, and benefit gained by the client. When being paid solely for our time, it can also lead to arguments over full and half days, and even hourly rates. Most day rates are barely enough to cover our CDB (see above), never mind make a profit. As professionals, we should be compensated for our creativity (see creative fee above) and for the benefit gained by our clients from using our images (see space rate below).
Paper trail - the collection of all documents generated for a given job. At the very least, the paper trail for assignments should include: estimate, contract, delivery memo, invoice and usage license, proof of payment, and terms & conditions. A paper trail for a stock sale (see below) would omit the estimate, and the contract and usage license might be one and the same, as you are not providing a service, merely licensing the use of an image. Appropriate pieces of the paper trail should be signed by both parties (contract, delivery memo, invoice) and the accumulated paper trail for every job should be archived for future reference. See the EP website, www.editorialphoto.com, for a complete example.
Space rate - a rate of compensation tied to how much space (1/4 page, full page, etc.) our photos occupy and preferred by photographers as our compensation is directly tied to the benefit gained by a client from using our images. Editorial assignments all used to be billed with the day rate (see above) as a guaranteed minimum against the space rate. In other words, if the day rate were $650, but the publication ran one photo at half page size worth $500 and a second photo at quarter page size worth $300, then the photographer would be due an additional $150 (500+300-650=150) upon publication. In a system where advertising rates are billed based upon how large an ad runs, it is only fair that photographers also be paid for how large a photo runs. If a client gets more benefit by running the image larger, then the photographer should be compensated accordingly.
Spec - abbreviation for speculation, as in "shooting on spec" and means agreeing to create images to a client's specific terms, without a contract or a guarantee of payment. While there is nothing wrong with shooting images to build a stock library (see below) and submitting those for consideration, photographers should not allow a potential client's current requirements to dictate the shoot at the expense of variety and potential future sales, without a guarantee of payment (see "assignment" above). If a client wants or needs specific images badly enough, they will give out an assignment. Shooting on spec rarely turns a profit as the photographer must also cover all the expenses, rather than being paid an assignment fee plus expenses as a minimum against space rate (see above).
Stock sale - the licensing of an image from a pre-existing collection of images, or stock. Stock images may be generated by shooting assignments, or they may be created by the photographer specifically for building a stock library. Residual income generated from stock sales is one of the primary reasons for photographers to retain the copyright to their images. A single image may be re-licensed again and again over the years as a stock image, thereby resulting in thousands of dollars for the photographer and his or her heirs.
Terms & Conditions - this is the "fine print", the collection of conditions under which you agree to do business with other parties. Your Terms & Conditions should be clearly stated and included on all parts of the paper trail (see above). Therefore, by signing and agreeing to your contract, for instance, a client also agrees to various conditions such as paying within thirty days, or being responsible for your original images while they are in their possession. See the EP website, www.editorialphoto.com, for a complete example.
Unauthorized use - the use of an image for which a specific license has not been granted. Remember, a use must be specifically granted, otherwise it remains with the copyright holder. The law is very clear: it is up to the end-user to obtain a license to use a copyrighted work before doing so, otherwise the use is unauthorized.
Usage - how, where, and for how long a copyrighted work has been licensed to an end-user by the copyright holder.
Work-for-Hire - a contract term which signifies that all work being done under the contract becomes the property of the person paying for it, not of the creator. It converts the creator's status from independent contractor (see above) to employee. It is an "employee-for-a-day" status, yet almost always fails to compensate for employment taxes, liability coverage, and employee benefits like insurance programs, bonuses, and retirement programs that the photographer must continue to supply for him/her self. Being self-employed and therefore responsible for all of our own overhead, as well as our own insurance and retirement programs, freelance photographers need to retain control of our copyrights to provide future income and should therefore think carefully before agreeing to any contract which stipulates work-for-hire, all-rights, or rights transfer.
See the full list of contract terms on the EP website at www.editorialphoto.com.
Cost of Doing Business (CDB) Worksheet
Your CDB is determined by your overhead which is the amount of money that your business must pay out every year, just to be open for business, regardless of the number of clients you serve. To get to your daily CDB, divide your total overhead by the number 250. 250 days is a number that regular, salaried employees can understand (52 weeks x 5 days/wk. - 2 weeks vacation), although even their number is more like 230 once you figure holidays and paid sick days. To be more realistic, divide your overhead by the number of days you can shoot, and bill for, in a year and still leave room for the non-billable time that must be expended for every shoot, like prep days and sorting film, as well as all the other things you must do to run a business like marketing/advertising, bookkeeping, image management, etc. 100 days is pretty optimistic when these factors are taken into account. Remember, overhead isn't based on the number of clients you have and shouldn't include anything that you bill to a client. Overhead are your "back of the house" expenses only. Some people include their own salaries in their overhead, others choose not to. If you don't include salary, do not forget it in the end. If you work only to cover your overhead and omit salary, you will have nothing left with which to pay rent or mortgage, buy food or clothes, entertain your family, travel, etc. Salary is what provides for the cost of living for you and your family and is why we're all ultimately in business.
Meanwhile, take the worksheet on the following page home with you and use your own numbers to fill in the blanks. When you arrive at your daily Cost-of-Doing-Business, remember this number. The next time you are asked if you'd like to, " make a quick hundred bucks shooting this little thing I need photographed," ask yourself if you will actually make money on the job. Would your time be better spent shooting new work for your portfolio or marketing to clients who have higher budgets? At the very least, you owe it to yourself, and to your profession, to say to a client with a very small budget that you understand their limitations, but that such an amount doesn't enable you to cover your overhead for the day and that working for a loss is simply a poor business decision. True, there is value in experience, especially when you're first starting out. But that value only takes you so far as you cannot spend experience or exposure to pay your rent or buy your film. By working for a loss that one day, are you giving up the opportunity to work for, or make a new contact with, a better paying client down the road? More importantly, by agreeing to work for a loss once, are you setting yourself up to do it again in the future? Are your services really worth so little that you can afford to subsidize your client by working at a loss? At the very least, ask for enough money to pay your business, and pay yourself, for the day's work. After all, isn't that the whole point?
Let's look at the numbers ...
| Category | 2000 Average from EP survey |
Your costs / year | |
|---|---|---|---|
| (US$/yr) | |||
| Office or studio rent | 6298.01 | ||
| Phone, fax, page, cell | 2909.62 | ||
| Advert./ promo | 5761.63 | ||
| Photo equipment | 5108.78 | ||
| Computer/imaging eqpt. | 4260.42 | ||
| Dues/subscriptions | 1041.99 | ||
| Health insurance | 2600.24 | ||
| Other insurance - business, eqpt., liability, disability, etc. | 2107.42 | ||
| Prof. Services - legal, CPA | 1830.32 | ||
| Utilities | 1037.25 | ||
| Repairs | 650.28 | ||
| Car/truck expenses | 4583.81 | ||
| Office supplies | 2491.64 | ||
| Photo supplies (not billable) | 2991.34 | ||
| Postage / shipping | 1453.85 | ||
| Payroll / office asst. | 5228.51 | ||
| Retirement account | 4686.03 | ||
| Total Overhead / year | $55041.11 | ||
| Cost of Doing Business per Day | |||
| at 250 days? at 100 days? |
= $220.16 = $550.41 |
÷ 250 ÷ 100 |
= = |
| Your desired salary / year? | |||
| Your CDB with salary? | |||
| Overhead+salary/250 days? Overhead+salary/100 days? |
÷ 250 ÷ 100 |
= = |
|