Estimating Expenses

Introduction | I: Presentation | II: Client Contact | III: Self-Promotion | IV: Estimating Fees | V: Estimating Expenses | VI: Coordination | VII: Execution | VIII: Expense Accountability | IX: Billing | X: Payment

This is the Fifth in a series of articles on the nine steps necessary to complete a successful freelance photography job. In the first three articles, Presentation, Client Contact, and Self-Promotion and Marketing we looked at the first three elements of what I call the Lifecycle of a Freelance Photography Job. Those first three elements comprise the Sales aspects necessary to define your work. In the last installment, Estimating Fees, we focused on the basic questions you should ask when establishing fees for a photo assignment so you understand what your client is expecting and you can explain what your client can expect from you. Now in this article we will take a look at some of the things you should consider when accounting for another aspect of the estimating process, namely the below-the-line costs commonly referred to the as the “expenses” (or “Production Charges” as they are defined to on the Advertising Photographers of America, APA estimate form). For those who do not have access to the APA form I am going to discuss each line item on the standard form so you may use this as a template for organizing your own form. For those who do have a copy of the APA form, have the form ready and read along with each entry.

Before we delve too deeply into breaking out the costs of doing a job I would like to address something I forgot to mention in the last article on photo fees and that is the topic of “day rates.” Plainly stated it is dangerous to talk about day rates with a client because the client will end up thinking that everything you shoot will cost the same amount based on the number of days that you shoot. Pricing for assignment photography is trickier than that because the overriding issues are where will the images be shown, how long will they be shown, and which rights do you retain as the author of the work? So to give a flat day rate to a client is misleading because each job requires asking all those questions in case the parameters of the job change. A photograph may be used for a small brochure for one season and that would have one price, while a similar photograph may be used in a national ad campaign and run for a year and have an entirely different price attached to it. The analogy I like to make when educating a prospective client about the process of estimating fees is that licensing is something like leasing a car. You may pick out a beautiful car from a leasing agency and the price you pay will be based on how much wear and tear you will submit that car to over the course of the lease. If you want to lease it for an extended period of time, or if you put more miles on in than you originally signed up for then you will have to pay more for that privilege because the leasing agency owns the car and they are just letting you use it for the term of the lease. It’s a little bit of a challenge for photographers—especially those just starting out—to get their heads around this concept and then to convince their potential clients that this is a fair pricing methodology, but once they explain the topic using the leasing scenario most clients will understand its validity. As I mentioned in the last article, the more people that see the image, the more potential sales, so therefore the more the photographer should charge for the image.

Estimating Expenses on a Shoot

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Okay, now let’s get back to estimating the expenses on a shoot. As I mentioned before I like to use the APA approved estimate form because it is relatively easy to follow and because it has long been the standard in the industry. Some folks think it looks too formal, too legalistic, and for some clients it may seem that way. But my feeling is that it has been in use so long that many clients use its categories and language to compare one photographers estimate against another’s, so it is a good format to use so your client will be able to compare apples to apples. You may make up your own version of the form on your letterhead, but if you do I suggest you keep the same basic layout so your client will be able to follow your estimate and compare it line by line with your competitor’s estimate.

And there’s something else I’d like to add. I have been using this format since it first came out back in the 1980s, and I still use it today because I don’t want to overlook anything. It was designed primarily for photographers doing advertising assignment photography, but I know of many collateral shooters who use it, or a variation of it to create their estimates. The format is pretty easy to follow but the purpose of this article is to clarify some of the entries and give you some insights that will make the estimating process easier. For those clients who find it too formal you can create your own Confirmation Letter in which you take the information on the cover page (see my last Photo.net article "Lifecycle of a Freelance Photography Job-Estimating Fees) and make it into a one page letter with a casual yet professional tone such as:

“Dear (name): Thanks for the conversation about your latest project (xxxx), which you would like me to shoot. As we discussed in our conversation you will need (number of shots), of (describe shots), shot on (date). As per our discussion you are going to use the shots for (name all the rights licensed – such as name of product, media usage, geographic regions, duration of use, exclusive or non-exclusive rights, etc.- further rights to be negotiated). The estimated price for this project will be $_____________ (fees + expenses) total. Thanks for the opportunity to work on this great project.”

Have them sign the letter and a copy of the letter so you both have a copy before you begin the project. In this way, you both know what the parameters of the job are. You can find other examples of confirmation letters in a number of books and software on the business of photography. I suggest you take a look at others, which may serve your purposes better, but remember, a little thing like having this kind of a letter of agreement will go a long way to getting off on the right foot.

Before I start my estimate process I like to have the layout or shot list in front of me and study it while asking the following questions. How complicated is the project to shoot? If it is a really complicated project that requires lots of research and pre-production then I will have to allow enough time to do the proper investigation and set-up and that will affect the price. I then use the old picket fence method and make a line for each day it will take to execute the project from start to finish. I may think it will take three days to get ramped up for the shoot, two to shoot, and one to break down the set, therefore I will have six days of involvement and from that I can start thinking, which crew members I will need, how long I will need them, etc. By this time I am visualizing the project from start to finish and I can start thinking of who (and what) is in front of the camera, and what is going on behind the camera. You can’t create a comprehensive estimate unless you have the expertise to “see” the whole shoot and anticipate the obvious things you will need, as well as some of the not so obvious things that can go wrong. Remember, an estimate is your best guess of what you will need to do the job professionally, and your objective is to not only create a beautiful image, but also to make your client look good for having the good judgment for selecting you. That’s where repeat business and referrals come from.

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Production Worksheet: Page 1

Next, I move to the second page of the APA form, Production Worksheet: Page 1. That’s right, I do not start my calculations on the first, or cover page since the work pages (pages one through four) are where the action is. The top two-thirds of Page 1 are relegated to information regarding fees. I like to skip this section at first and move right to Production Charges because I want to get a feel for the scope of the project (the involvement of the crew, the amount of equipment, are we shooting on a stage or on location, etc.) before working on the fees. I don’t want to be locked into a fee at this point.

Crew

Starting with the Production Charges I begin with the section labeled “Crew.” Since I have already studied the layouts or shot list I have a pretty good idea who I will need on the shoot and how much time they will be involved in the project. The way the form is set up I just have to multiply the number of crew members per job title, by the rate for each category, by the number of days. How do you know what the rates are for each? Well, you will have to check with your local trade organizations, and other photographers, and assistants, to see what are the going rates in your area for Assistants, Production Coordinators, Hair Stylists, Makeup Stylists, Home Economists (now sometimes referred to as Food Stylists-in other words the people who make the food camera-ready for food shoots), Prop Stylists, Wardrobe Stylists, Welfare/Teacher/Nurse or child welfare specialists, and Animal Trainers. Now chances are you will not need all of them on a single shoot but it is a good thing to fill in the fees for these categories and keep them updated in case you need to get an estimate out quickly. I ask my students to research these items and to have a working copy of the estimate handy so they will be ready to estimate in any eventuality. Make sure you know the rules in your area regarding photographing minors. In my home state there are very strict rules protecting children who are being photographed or filmed, and one of those rules is that you must have a Welfare/Teacher/Nurse present on the shoot to look out for the physical and psychological safety of the children involved. There are strict laws in place for good reasons so don’t try to circumvent the rules.

One more thing, you may notice that there is a blank line at the end of this category, and at the end of most of the other categories for that matter. The designers of this form cleverly left room for an additional entry for a player to be named later. Now that so many photographers are shooting digitally they may choose to write in “Digital Assistant” in the blank space, or they may wish to make the digital assistant a part of their digital equipment costs later in the form. As times change those little blank lines have become very important.

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Production Worksheet: Page 2—Film and Prints

The next category is Film and Prints and, though this section may seem obsolete due to the technological changes in our profession you should not skip over this section because you may have to provide your client with prints and they could be accounted for in this area. The two columns listed under Color, and Black and White should have been three columns so you could calculate quantity, price per item, and then have a column for the subtotals, but you can do a little math off to the side of the page and add up your subtotals and then list that next to Total Film.

Insurance

Insurance is the next section and it lists three entries namely, Liability, Shoot Insurance, and Riders/Binders. Liability refers to your basic insurance package you must have to cover loss or damage to your equipment, and to protect your personnel. Most of my students leave school with a significant investment in the tools of their trade and they have to have those things covered by insurance. Most of them take the total amount for their premiums for the year, divide that by the number of days they anticipate shooting that year, and then charge that smaller amount per day to their client. In the old days photographers used to absorb those costs, but now most photographers I know pass that cost along as part of the normal charges necessary to execute a shot. Be advised that this is normally not a problem where there are larger budgets involved, but clients with smaller budgets, or clients who are not used to paying for that because previous photographers did not charge them may have a hard time understanding a charge here. I have heard of photographers who end up increasing their fees to cover those costs, but I feel it is better to call out the charges and to discuss with your client that you are an artist and a business person and you have costs like any other business that are necessary for you to operate, and they would not want to work with a professional who did not have insurance to cover them in case of an unfortunate occurrence.

Shoot insurance is a more costly type of insurance that will cover you in the event you need to reshoot a job. Many of the emerging professional photographers I deal with do not need to pay for this type of insurance and be insurance poor. However there are those who shoot the types of jobs where it would be very costly not to have this type of insurance. I suggest that you check with your professional photography trade organization and find out if they have an arrangement with an insurance agency that understands the needs of photographers. Many main stream insurance agencies will not be familiar with the unique needs of photographers so it is good to go to a photography trade organization approved professional.

And then there is the category of Riders/Binders. Riders/Binders cover the additional insurance costs involved when you rent a very expensive piece of equipment, or want to shoot on a location where the owner wants to be named as additionally insured on your policy in case anything happens to their property. They may have as a condition of rental that you be covered for a million dollars a day and you will say, “Where am I going to get that kind of money!” The Rider/Binders allow you to pay a small amount (which you will pass along to your client as part of the estimate) so you can have the required coverage for the day. This is another example of why an insurance agent who understands our profession is so important because they will appreciate your situation and provide you with the proper paperwork to cover all parties concerned.

Location/Scout

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This section has a lot of room for discussion because photographers have the world as their palette. Some photographers like to do their own location scouting, some like to hire location scouts or look through the files of location scouts, and some prefer to send an assistant out to find the right place shoot. And in each of these cases the pricing will widely vary. Whatever the case there will be charges for time, travel (mileage, accommodations, meals), and prints or digital media utilized to show the client the perfect spot to shoot. If you are going to work on a location make sure you factor in any location fees or permits so you are working within the law. Different jurisdictions have different requirements so check with film commissions, local, state and federal agencies.

Shooting at a studio may seem pretty straight forward but there a few things to keep in mind. As you can see from the categories on the estimate form there are build days, shoot days, overtime, and strike charges. Build days and pre-light days are usually billed at a fraction of actual shoot days (say two-thirds to three-quarters of a shoot day depending on the studio’s policies) and that is because there is no shooting being accomplished, only setting up. Strike days refer to those days necessary to tear down the set and clean up so they are similarly a fraction of a shoot days costs. One thing that must be mentioned here is that whatever prices you are quoted for a stage rental remember to ask about additional charges because there are almost always some additional charges such as electrical, a/c, phone, use of a coffee maker, photocopier usage, painting, etc., and those can add up quickly.

And finally under Location/Studio there is the line item for travel. My interpretation of the word “travel” here means mileage driving to and from a location. It does not include flying to a location as that will be taken into consideration later on in the estimate form.

Props/Wardrobe

This section is pretty straight forward in which you enter your best idea of how much you think it will cost to purchase props outright, or to rent them. Keep in mind that items if you pick up and return to a store you may be charged a restocking fee so those items should be considered rentals if returnable.

The line item named Food refers to the food photographed during the shoot, not the munchies or lunch you have during the shoot. There is a place for those food items later in the estimate.

Wardrobe refers to the Costume Design, Seamstresses, Purchases, Rentals and Special Makeup and Wigs needed for the job. This can be a considerable expense on a period piece so make sure you consult with your Wardrobe people while developing the estimate so you have a good idea of the costs involved. When estimating Props and Wardrobe make sure you have enough of everything because things have a way of getting stained, wrinkled, and damaged during a shoot and you will always need another alternative to complete the shoot.

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Production Worksheet: Page 3

Nowadays, the Rental category can be more complicated than in the past due to the fact that new technologies have become so necessary to even the most mundane shoot. The costs for the Grip package (a photographer’s toolbox), Lenses, Lighting, Cameras, Special Effects, and Equipment may include exotic digital equipment, which is costly to purchase and maintain. For that reason more and more photographers may own a basic set of tools of their trade, and they rent the rest in a manner similar to the film industry, and pass the cost of rental on to the client. Increasing numbers of photographers are pooling their expensive digital equipment and forming rental companies and amortizing the costs over a period of time. Back in the day a hefty portion of the expenses on a shoot used to be the film (and associated) costs, while now it is not uncommon to have those costs shifted to the rental equipment category.

Sets/Expendables

When it comes to Sets there are a number of trades that can become involved in creating a set so Set Builders, Painters, and Set Designers will use Hardware/Lumber, Paint/Wallpaper, Backgrounds/Backdrops, Studio Materials, and Surfaces to create the atmosphere you want to dress your shot. Photoshop has opened up the world to photo-composing shots done on blue or green screen and for some photographers that means less set building, but for others that has meant more and different types of sets. Again make sure you consult a professional set builder when estimating your shoot so you can get an accurate idea of the costs involved. One more thing, Expendables refers to those items used during a shoot that, once used, cannot be used again. Those kinds of things include tape, seamless, gels, etc. and they can amount to a significant amount if not accounted for going into a shot. After a few photo sessions you will have a pretty good idea of how much you will need to factor into your estimate for these things so you don’t overlook the opportunity to recoup their use.

Shipping

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This category may seem trivial but it too can end up costing you money for Messengers, Deliveries, couriers to pick-up and deliver products, equipment, items from the client’s office. Make sure you account for these costs even if they seem like a small amount. It all adds up.

Talent

Estimating Talent casting is similar to estimating Location costs in that some photographers like to do their own casting, others let a casting agency do the bulk of it, while others have an assistant carry out a casting and make a selection of the top three talent candidates. Just keep in mind that Casting Fees have been going up like everything else so check to see what all the charges are going to be if you are planning to work with a casting agent, and/or use their files. Also make sure that you understand if there are any additional Talent Fees involved which will increase the fees in the casting category.

Travel

The world has become more complicated since September 11, 2001, and that has impacted photographers in that we no longer have the ability to pack a lot of extra luggage without it being inspected. We also now have large charges for Excess Baggage. It is up to you to call your carrier to find out about their excess baggage policies and charges when doing your estimate; don’t just dream up a number off the top of your head or you will be in for an unpleasant surprise.

As usual Cabs, Car Rentals, Truck Rentals, Motor Home/Dressing Room, Parking/Tolls/Gas/Mileage/and Arrangements (for accommodations and travel) are job specific. When looking to do a very involved shoot it is valuable to hire a Production Coordinator who can help you to think of every type of contingency so you will have it covered in your estimate.

The last two items in the Travel category are for Crew and Talent that you are taking on the shoot. Air Fares, Hotels, Meals, and Crew Members are self explanatory but the item Per Diems may need some clarification. The term Per Diems refers to the amount of money you will pay crew and talent per day for food expenses when on a trip of considerable length. You may pay them a specific amount for breakfast, lunch and dinner each day and they are free to use it so you are not obligated to all go to each meal together every day. We were on a three week shoot in the Virgin Islands on a project and two of the assistants decided to make their own food and save their per diems thereby making a nice chunk of change at the end of the job, and saving us from having to gather everyone up for each meal. Obviously the amount of the per diem varies per location and cultural conditions so do a little research to find out what will be appropriate.

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Production Worksheet: Page 4

My favorite category is Miscellaneous on the last page. It is a section where you can take into account those things that otherwise would come out of your own wallet. “Gratuities” is the first entry and it covers such things as tips and other monies that you hand out as favors to get the job done. I have been on a job where the only way to get the perfect shot we had to grease someone’s hand and that amount would be covered on the gratuities line.
Today just about everyone has a cell phone but it is still a good idea to check and see if you have enough money in the Phone/Fax line item so you can cover those costs. And if you haven’t picked up expendables on page three you can use the Studio Materials/Expendables line here to do so.

And then there is Craft Services, in other words the munchies that you eat while on the set or location. This is a very important category because the munchies and noshes (cookies, snacks, drinks, fruit, etc.) keep everyone’s energy up and in good spirits. I actually knew of an art director who refused to work with a photographer because he didn’t like the craft services the photographer provided. Also it is pretty common to have mid-afternoon coffee, or frozen yogurt (or some other fun treat) runs, so that can also be included in this important category.

Craft Services can also include the meals (lunch, possibly dinner if running late) you provide for the client, crew, and talent, but I prefer to put those costs on a separate line below Craft Services so I can keep the costs straight. The costs for meals can vary according to the tastes of the client, but don’t be cheap here because you want to make sure the client and everyone else feels the love on your shoot.

If the client is high profile you may want to have a wrap party where you take the client out for a very nice dinner at the end of the project to celebrate. You may use the last remaining blank line under Miscellaneous to factor in a classy meal out for the client, selected members of the crew, and yourself. Years ago a well-known Los Angeles photographer used to put out a book of restaurants you could take your client out to for a wrap party based on the size of the budget for the project. It was a popular book until the budgets were pulled back because of the recession at that time (yes there have been other recessions).

Talent Worksheet

As far as the fees for Talent are concerned you will have to talk to your individual talent agents to get the ranges for the models you wish to use. However, you can be sure that if they quote you an hourly rate for the talent under their care there will be a minimum number of hours (usually a four hour minimum), and there will be charges for overtime, so make sure you are aware of the policies in place. Adults, Minor, and Extras have standardized rates per hour (check for rates in your area by calling talent agencies) for most typical jobs, but be careful if there are Talent Usage Bonus issues in which a talent may become a spokesperson for the product as a result of the photos you shoot of them thereby eliminating them from other work, and so they will require a higher than standard fee.

Another thing to be mindful of is that talent agencies may charge you a Talent Agency Commission (again check with the agency) on top of the talent fees so make sure you understand what the bottom line will be on your Talent charges.

Production Worksheet: Page 1

Now we return to the first page of the Production Worksheet, the section labeled Fees. Now that we have a good idea as to what it will take to pull this project together we can have a more realistic idea as to what the fees should be. We can also have a concept of what we should charge for Travel days (days on the shoot when we are traveling but not actually shooting), Weather Delays (when we can’t shoot because of inclement weather), Extended Shooting Days (overtime for photographer, crew and talent), and Photographic Imaging Charges (digital manipulation, printing, archiving, etc.). By using the knowledge gained while doing the estimate, and applying the C+U+T+E M+E+X mnemonic from the last article we can be pretty confident we have a handle on the scope of the project.

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Return to the Cover Page

Once you have filled in all the categories that apply to your job, and you feel that you have given yourself the elements necessary for you to do the best job, then it is time to take the subtotals on each page and move them to the front, or Cover page. Now here is a critical stage. Check your math. Then recheck your math. Then check it again. It is too easy to have a number transposed, or somehow lost in transition, and you end up having to cover the cost when the job is finished. Don’t think that your computer will catch the problem. Check the computer’s totals just in case.

After you have added up all the totals to give you the Subtotal, add the Sales Tax (if applicable), and add the two together to get your Total. I suggest that you request an Advance equal to the Production Charges total (or half of the Total for the whole job if it is a very involved job). You should not have to front all the expenses out of your own pocket so it is not out of the question to request an advance. Some clients may advance a third of the job, some may choose some other arrangement of payment, but the important thing is that you have opened the door to discuss an advance and you have reinforced your standing as a creative business person.

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Two more things: 1) Only send the Cover page and the Terms and Conditions page to you client; do not send the work pages because that may invite them to question every line item and feel obligated to nickel and dime you; 2.) Once they have agreed to your estimate have them sign it and a copy, and give them one copy and you keep the other.

Once have done that you are set to go! Best of all you have laid out a road map on how you are going to approach the job; you have actually visualized the whole project in your head and you are now open to let your creativity and talent take over.

I can’t overestimate (no pun intended) the power of a well drawn-up estimate. Not only will it make your job easier, it will allow your client to understand how you see the job and alleviate their anxieties. They are putting up considerable money and it is now your turn to perform. You don’t want to hamper your chances of doing the best job, so don’t short change (pun intended) yourself!

Coming up in the next article, I will be looking at the next step in the Lifecycle of a Freelance Photography Job, namely Coordination. In that article I will address some things you will need to keep in mind when putting your job together and some ways to protect yourself by anticipating problems on the shoot. Now that you have done a comprehensive estimate you can start plugging in the elements necessary to take your client’s original concept and add your unique vision to it.

More

Lifecycle of a Freelance Photography Job

Other Articles by Tony Luna

About the Photographer

Graduating with Honors from Art Center College of Design, Sean Teegarden is an editorial photographer specializing in conceptual portraiture and still life. Sean has received international awards from Adobe Systems, Apple Inc, and Photo District News. His inspiration comes from 1950s sitcoms and mid-century design.

Tony Luna—the President of Tony Luna Creative Services, a Creative Consultancy founded in 1971, and Artist Representative/Executive Producer with Wolfe and Company Films. Mr. Luna has been an Instructor at the Art Center College of Design since 1985 where he teaches “Career Perspectives” in the Photography and Imaging department, and “Crafting a Meaningful Career” and “Living the Dream” in Art Center’s Public Programs. He is the author of, How to Grow as a Photographer: Reinventing Your Career (Allworth Press): an informational and inspirational guide to career evolution. Tony presented a lecture titled “Taking Your Career to the Next Level” at PDN PhotoPlus Expo in October 2008. He has helped well over a thousand artist-entrepreneurs begin, sustain and enhance their careers, and hundreds of companies to grow and prosper.

Text ©2009 Tony Luna. Photos © Sean Teegarden.

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