16 — Real Numbers: Pricing & Profit
My Oma & Opa’s restaurant Shatzi’s, front and back, two unknown patrons
Step 1 — Determine your cost of doing business
Website hosting (Squarespace, Format)
Subscriptions (MEMORY CULT, Unfold+, Canva, Captions, Aperture)
Transaction fees (Stripe or equivalent)
Business licenses (Some state require an annual sales tax license)
Business insurance
Marketing & ads (Raw materials & online advertising)
Taxes: federal, state income & sales tax
Paying experts: accountant, virtual assistant, teaching & workshops
Travel costs
Material costs
Step 2 — Determine your desired annual profit after expenses
Your desired net profit depends on your lifestyle, goals, cost of living, parternship and childbearing season
Step 3 — Determine the volume of each product you can reasonably support
Having a mixture of active and passive products enables you to build wealth without requiring more time clocked
For the products which require your time, how many can you/do you desire to support annually?
For example: 20 family shoots and 10 weddings
Step 4 — Annual desired profit divided by your products at volume = your price
Example: Local Family & Wedding Photographer with 1 Passive Product
$30,000 — 20 local family shoots at $1500 each
$50,000 — 10 weddings at $5000 each
$10,000 — 1 passive product (print shop, teaching, presets, guides) selling 100/yr at $100
——
$90,000
- 25% taxes
- 15% cost of business (varies greatly)
——
$54,000/yr
$4500/mo