Do You Have A Minimum Wage Rate As A Photographer?
Many photographers are leaving money on the table because they do not know what a minimum wage rate is. How are you leaving money on the table? You’re doing that by not having a ‘last price.’
Definition: Minimum wages have been defined as “the minimum amount of remuneration that an employer is required to pay wage earners for the work performed during a given period, which cannot be reduced by collective agreement or an individual contract.”
Having a minimum wage rate is one of the ways to not lose when negotiating a price. In other words, you’re saying, “I know what I’m worth, and I’m not taking below this amount.” You do not want to run a business without profit.
See yourself always as the person who is in to help the client or prospect, because, really, that is what you do as a photographer. You’re in the service business. You’re serving. You’re helping a person or a group of people achieve a thing they’ve always wanted. It should be a win-win situation. Nobody is losing. How do you do this? You do this by making sure your client is receiving what their money is worth.
A perfect example is what we see in the market.
Have you ever been to Kantamanto-Accra to buy a piece of clothing — a shirt or a material? You go there because you believe it’s cheap. I love a thing or two about the traders there. They always have what I call a “cut-off price” which is a dumb name for minimum wage rate. What do I mean? They know how much they ought to gain from a single good they sell. Let’s start a dialogue to make this simple.
Buyer: Hello, I want to purchase this singlet. How much is it?
Trader: It’s 50cedis. How many do you want?
Buyer: I only need one. But I’ll offer 20 cedis.
Trader: No please, that’s a terrible price. The last is 35 cedis.
What you realize during this convo is that they have made their last price known and if you’ve been in this situation, you know they are NEVER going to drop the price. What are these traders teaching us? — they are saying, “If I sell it to you lower than the last price, which is 35cedis, then I’m going to run at a loss.” The trader understands not to negotiate too low. Why? Because he will run at a loss and that will affect his business.
Here is what they do, a simple formula everyone uses. Revenue — Cost = Profit
Revenue is the total amount of money that is produced by selling the goods or services to the customers OR Revenue describes income generated through business operations. Simply, this is how much you are earning in a business without deductions.
Cost is the spending required to create and sell products and services, or to acquire assets.
Therefore, your profit is what you get when you subtract the cost of making a good from revenue which is the total amount of money charged for a good or service.
Revenue represents all positive cash flow earned by a business, while costs include both variable costs and fixed costs. Profit is the amount that remains after factoring cashflow in and out of the business.
When you know this formula and understand it, you can get to the point where you set a minimum wage rate for yourself as a business. The ‘last price’ is where you refuse to negotiate further down because you know you’ll be losing.
Do not take a client who is not going to meet your minimum wage rate. The best you can do is that they pay for the cost of your service. This way you gain no profit but you lose nothing too. They’re going to be paying for the cost involved in working for them. If that is not the case, then you do not want to be the loser in any negotiation.
Here is what you do. Find a reasonable and satisfactory price and stick to it for any job or service you offer by using the formula. Or simply find how much it will cost to provide your service, add your profit and present it to your prospect.
Thank you for checking out this article. I’m looking forward to creating a website soon, a place I can own and share my photos. I’m Clement Eastwood, and I’m a fine art photographer and an author. Tap on this link to have access to my book Reclaim Your Creativity.
