Tuesday, March 22, 2016

Why $60,000 Revenue = $30,000 Income

$30,000 is the U.S. national median of photographer salaries according to the U.S. Bureau of Labor and Statistics.  Which breaks down to $15/hr when you divide that by a traditional U.S. working life of 50 weeks a year ($600/wk), and 40 hours a week ($15).  Obviously, photographers don't stay in this profession for the money; they stay because they are passionate about creating great images and can't imagine doing anything else they love more.

What many starting photographers don't understand is that in order to make that $30,000 salary, most photographers actually need to bring in $60,000 in revenue.  Here's an example of how that can break down in expenses for a full time photographer:

Individual expenses will obviously vary from person to person.  One photographer might save more by not upgrading equipment as frequently, but may spend more on education.  Another photographer might have a large marketing campaign budget (which I didn't include as a separate item), but gets health insurance from a spouse.  These numbers are just examples to provide a clue of where the money may go after it walks in the door.

This is also the reason that I suggest a lot of beginning photographers start with a 50/50 split on the revenue that comes in from clients.  Put 50% in a business bank account and 50% in a personal bank account.  This helps make sure that you're beginning your business with a solid practice of paying yourself while also setting money aside for business needs and expenses.  By splitting the revenue into expenses and income right when it comes in, you prevent the practice of not making anything to pay your bills, while also making sure your business can cover expenses to survive another year.

Have you been in business for a while and tracked the percentage of your revenue that goes to expenses versus income?  What percentage has been true for your revenue and expenses?

Anne Ruthmann is a professional photographer in New York City. With over 10 years of success as a full-time photographer in weddings, portraits, editorial, and now architecture and interiors, she spends any extra time she has helping others find smart solutions to business problems.  Stay in touch on Instagram, Twitter or Facebook.

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