What Percentage of your revenue do you spend on Equipment?

<p>This question has been debated in various forms, but to the best of my knowledge never asked outright. <br /> <br /> Professional Wedding Photographers - Full time or "Weekend Warriors" - how much (percentage) of your annual revenue do you spend on equipment (Cameras, lenses, lighting, etc). Although computers and software could be considered, lets limit the question to purely photographic hardware.<br /> <br /> What do you think the reasonable (based on ethical/ practical considerations) percentage of client revenue is to invest in your equipment?</p>

<p>I'm not sure why this should be expressed as a percentage.</p>

<p>Lab costs? Yes.</p>

<p>Overhead? Yes.</p>

<p>Marketing? Yes.</p>

<p>Camera equipment is generally fixed and has about the same cost of entry no matter how much revenue you produce.</p>

<p>Eric</p>

<p>"do you spend on Equipment?"</p>

<p>less than 7%</p>

<p>Well, expressed as a percentage because there is a difference between the photographer who earns $25K a year and the one who earns $250K a year...IMHO, at least.<br>

Of course there are lab costs, marketing, overhead...which can likely be expressed as a percentage of your revenue as well, but what about photo equipment? What percentage do you assign to buying cameras, lenses, memory cards, flash, etc.</p>

<p>I would think for a lot of us, as when I was starting, being nre, I spent a lot more per client than I do now. Started with 2 D70's and upgraded one to a D200 and hen the other to a D300. A few extra lenses, Second QUantum battery for flashed instead of more AA bateries. Now I spend a WHOLE lot less. I do stock up on albums for proofs and frames for engagement pics/signature mats when I can find a deal. I AM at the low end of the groups shooting for proofs and CD only.</p>

<p>Chris - do you invest in equipment based on an ethical or practical percentage of revenue?</p>

<p>I put back into equipment based upon both a practical and ethical basis. Many years ago, when I apprenticed for a well-known landscape photographer, he used a 10% of revenue back into photo equipment. That didn't include darkroom or lab supplies, marketing, etc. That 10% was the amount he used to maintain current equipment, lenses, lighting, etc. My expenditure is right at about 10% as a matter of practicality and ethics. My clients pay for, and receive an excellent photographer with excellent equipment. As a practical matter, this means that my budget for marketing doesn't need to be significant. I turn away many more clients than I accept during the course of a year - both wedding and commercial.<br>

Of course, the hope is someday I will be "discovered" and manufacturers will give me their cameras for free, but in the meantime, I have to budget for the equipment. And for me, expenditures always follow the revnue.</p>

<p>So you decide on an ethical and practical percentage and then decide on what gear to buy with that percentage.</p>

<p>Starting out in the business you should expect to take a pretty good hit, maybe not even show a profit for a year or 2, therefore all of your earnings for gear, the labs, and advertising will probably be gone. After you've been around for a few years I think saving away 15% seems about right for updated new gear only.</p>

<p>Advertising an another fugure subject. A business can go under in a very short time, in just a few months, if your advertising overhead isn't paying off. Smart advertising is really the key to a successful photo studio.</p>

<p>That's it for me...but it works for me. I buy a new Series One FF and crop frame every 2 years or so, because I put about 200-220k exposures on each of those bodies each year. I also cycle other equipment based upon their exposures/usage and that equipment cycling is budgeted upon revenues. None of my equipment is more than 5 years old and bodies, flash, cards, etc - all less than 3.<br>

If I have an exceptionally good year, I will replace a camera at 300K exposures rather than 450K...similarly cards and lenses. I use the "specialty lenses" (24, 35, 135, 200 400 primes) considerably less, so they have longer service life than lenses like the 24-70, 24-105, 85 1.2, etc</p>

<p>sorry for the typos - Advertising an another fugure subject - should read Advertising is another future subject.</p>

<p>From a business standpoint the goal is to NOT have to have alot of capital expenditures at ALL. Thus you want a profitable business that doe NOT need to spend a boatload of money on major upgrades of equipment to stay competitive. Thus if "ethics" is a criteria; and I look for an "ethical manager" who naturally does NOT chase capital expeditures. One should not just consider age as a criteria; or you be throwing way perfect 5 year old tripods; lens caps.</p>

<p>Kelly, your thoughts are shared by a lot of photographers. "Put as little money into the business as possible"...it's one business model. Not one that I agree with, but it is a widely held model.<br /> <br /> I'm just curious to find out where self-described "Pro" photographers on this forum stand.<br /> <br /> PS - I have a couple of older tripods...that's where the "practical" part comes in. Although even tripods get beat up (heads loose, joints less stable) after 5 to 10 years of heavy use...well, the way I use them, at least. And those use issues (of tripods) affect stability which impacts the final image.</p>

<p>Well, I am a bit of a gear junkie and so I estimate (rather too accurately) it to be around 12.75% from year to year.</p>

<p>If I sold the closet full of stuff I have accumulated, I would probably retire earlier...</p>

<p>Christopher;<br>

<br /> <br /> setting aside a fraction into saving account or dedicated cubbyhole for future capital purchases is what we do here; with printing.<br>

<br /> <br /> The "wear"per shot; per wedding' per customers print is not uniform.</p>

<p><br /> Thus one wedding might have little wear on a camera; another might have it bumped; crud/cake on the lenses; one 3 years from now might have a lens dropped and totalled..<br>

<br /> <br /> Most businesses fails due to lack of funds in rough times; thus you are WISER than most chaps by worrying about this issue!.<br>

<br /> <br /> Lets say you set aside 10 percent; if after 3 years you have too much you can pay yourself a dividend! If its too low you have to borrow!</p>

<p>Kelly, another legitimate argument on your part.<br /> <br /> We look at exposures on bodies much like mileage on a car. Shutters are rated for "durability" mean failure by the Canon engineers for a reason. I would no more rely on a body with 500K exposures for a wedding than I would rely on a car with 500K miles for a cross country trip.<br /> <br /> My paradigm is probably different than yours because of duration too. I've been a full-time photographer for 30 years, so my business plan is more about "maintenance" than "acquisition".<br /> <br /> You hit upon a great point though, one I've been wondering about. For most of my associates & students, wedding bookings are way down for 2009. The prevailing strategy seems to be (based upon my observations) that they're spending a lot more for advertising (joining the "sea" of other photographers doing the same thing) and many seem to be putting equipment acquisition/maintenance on hold.</p>

<p>I buy equipment on a as needed for long term basis. Equipment needed but not in the long term sense is rented.</p>

<p>Seeing that I carry around a EOS A2E --about 4% . Never abuse my gear ~~ SO they have lasted for many years....30 or less weddings @ 2/300 images per - my camera will be around next year. Cost of living takes about 80%</p>

<p>If you believe a camera body lasts 300k shots and it costs 3K than one could straight line and pay per click; here shown with no scrap or residual to make the math easy:<br>

<br /> ie one year you shoot 100k; you sock away 1k<br>

<br /> year two you shoot 150k; you sock away 1.5k<br>

<br /> year three you shoot 50K MIDYEAR; your fork over 500 bucks and buy another body.</p>

<p>Or maybe you just say place 1k way per year and any excess about 100k clicks<br>

<br /> ie year one as slow year you shoot 50k; you sock away 1k<br>

<br /> ie year two you shoot 150k; you sock away 1k plus 500 for the 50k overage<br>

<br /> ie year three you shoot 250k; you buy another camera at the first 100k</p>

<p> </p>

<p>Kelly... Huh?</p>

<p>I imagine a well rounded plan would be about 10% for the average pro. Seems fairly well covered to do that and take a "bonus" from that fund once a year as the fund reaches your target figure.</p>

<p>IOW, if you think you will need say 40K to replace a full wedding kit (cameras/lenses/lighting/batteries/cards/ and miscelaneous other "wear" gear) and you put say 15K away for that per year. After 3 years you have 45K. At the end of that year you can safely take 5k as your bonus. However, in real life you will likely need to use half of what you put aside each year for maintenance of your gear. So it will likely take you about 6+ years (starting from 0 of course).</p>

<p>Well I can see by that strategy I am not doing what I should. I usually have about half of what I need to replace everything set aside at any given time. However, I don't limit what I use either. That is to say, if I think something will do the job that much better, I will get it and take less as income. And this is the part that I see as being such a tough issue for most people. We don't seem willing to adjust our personal economy in a downward direction, even when it's obvious we NEED to. With that in mind...</p>

<p>Off topic slightly, but related:<br /> One big factor that seems largely overlooked in the equation of how/what to budget for gear, is the part of the equation that relates to income. To me, that income expressed as a percentage of total revenue, is about 60%. So (from my standpoint) if you are using all your revenue each year, you are not only preparing to fail financially, you are specifically heading in a backward direction. So, keeping a tab on what you are earning, then adjusting your income based on that number, will mean that you are not caught by surprise. It's not any surprise the economy is where it is today as the mass of the population subscribe to spending more than they really have, not saving for a rainy day and to add some insult, juggling their debts in order to make themselves think they have more income than they really do. Do yourself a favor and take a good look at your real income, then plan your expenditure AND saving, to allow you to ride the inevitable peaks and valleys of any economic future.<br>

Rant over... :)</p>

<p>I bought my latest car when it was 10 years old --my house was 30 years old --- I purchase my cameras seasoned. Although the film cameras seem to last much, much longer > our 20d we expect to be around several more years for sure ~~ we have budgeted for a 40d and zoom for the second quarter of 2009. We always eat -- before buying equipment :-)</p>

<p>Often this forum seems way too interested in issues related to equipment......</p>

<p>I wonder how much others invest in themselves as photographers via professional associations, networking, and in continuing education/training.</p>

<p>David S - good questions suitable for another thread. There are many expense items - many ways to divide up the revenue pie. Aside from the purely practical expenses ('I have to buy a new camera because my old one is unfixable'), there is a range of "less necessary" costs that as "professionals" (Photographers who hold themselves out to Brides as 'Professional Photographers') we should probably make.<br /><br />What are those "less necessary" expenses and how do we handle them? How do we budget for them? What "obligations" (as "Professionals") do we have to the clients who hire us? There is no licensing, no requirements for minimum equipment or Continuing Education - as there are in virtually all other professions. So how do we, as Professional Photographers, handle those things?<br /><br />I'm seeing responses that range from 'I'll spend as little as I possibly can for items other than absolutely necessary' to more of a fixed percentage approach. Which approach makes more sense?</p>

<p>C Jo:<br>

Yes, food, mortgage payment and clothes for the kids is higher priority than equipment.</p>