Business Resources

Details: Creative Fee

This is simply your Cost of Doing Business (CODB) plus the unique quality you bring to the job — the price you put on your creative work.

Your CODB is easy to calculate:

Non-reimbursable expenses + desired salary = your total annual cost ÷ number of billable days = your CODB.

Do not confuse non-reimbursable expenses with expenses you bill to a client for a specific project. Non-reimbursable expenses are the costs of running your business. Examples include rent, computer, phone, Internet access, insurance, equipment purchases, office supplies, repairs, utilities, server hosting fees, accountant, bookkeeper, taxes, depreciation, replacing equipment, and saving for retirement.

ASMP's online CODB Calculator can help, both with calculations and with specific suggestions for picking numbers to enter. NPPA also offers a free online CODB Calculator with a different spin on the numbers.

Desired salary. Most of us, naturally, want this number to be as high as possible, but it is important to be realistic and practical. Base this number on a small increase in your salary from the prior year or, if you are starting out, put your salary in at a level that can support your current cost of living.

How to determine your number of billable days: Again, be realistic. Most assignments need pre- and post-production time, plus you need a vacation, and few projects are scheduled around the holidays. Right off the bat, there are only 44 to 48 weeks a year to consider. Then, depending on the type of photography you are doing, you can bill only 1 to 3 days per week. Few will do more than this. Look at past years or, if you are doing this for the first time, talk to fellow photographers. Remember you need to allot time for marketing, portfolio development and administrative work. These are all critical to your business, but they are not billable days.

Once you have your CODB calculated, you know your minimum fee for any billable day. Going below your calculated CODB means you are losing money. Naturally, some business common sense has to be considered. For example, an editorial assignment may be a good business decision, even though the pay scale is lower than commercial work. A particular assignment may offer access to people and places you want to photograph, an opportunity to produce a great portfolio piece, or additions to your stock library. You cannot, however, take repeated jobs that fall below the CODB without getting into financial trouble. Like any business formula, it is necessary to be flexible and smart.

The intangible addition to your creative fee — creativity! Add the CODB to the special talents or services offered for a specific job and that total becomes the creative fee for this particular project. Your CODB will stay relatively consistent, but the creative needs of each assignment vary dramatically. This is why one creative fee does not fit all jobs.

Here is a sampling of items to consider when arriving at your fee. If any of these things are critical to the successful execution of the job or important to the client, they should increase the fee. All these things have value and should be reflected in the price.

• Tight deadline
• Specific style
• Creative solutions needed (looking for conceptual input)
• Expectations of high end service (catering lunch rather than McDonald’s)
• Logistical difficulties (a factory that cannot stop production or a mountain to climb)
• Experience
• Extreme limits on subject availability (like 2 minutes with the CEO for a portrait)
• Technical expertise
• Geographic location
• Reputation

Next: Details: Usage or Licensing fee