Stop Accepting $200 Jobs...

[Rajah Sulayman]

Originally Posted by archersdad

I would like to point out that spending $50,000 on gear does not make someone a good (or professional) photographer.

I neither stated nor implied otherwise. In fact I explicitly and specifically said she didn't have to buy $50,000 gear. What I said was that when someone hires a photographer to do a job, they expect better than an entry-level dSLR and a stock lens.

Many people consider $200/day to be great pay. That is more than the median income in the US. The median teacher's salary is less than that. Should teachers, who also meet the definition of professional, stop teaching because some accept less than $200/day?

Please don't turn this into some philosophical or pseudo-social debate over salaries. You could apply that argument to any profession that makes higher than the median income. Do hair dressers deserve to make more than teachers? Do actors? Do screenwriters?

This isn't about teachers or anybody else. This is about photographers. Once you start making it a comparative argument it completely falls apart. There will always be someone worse off and there will always be someone better off. It's a pointless argument.

And for what it's worth, a paycheck doesn't exist in a vacuum. There are environmental factors to take into account. For example, New York is pretty much the center of the photographic universe. So it makes sense that if someone is going to attempt to build a career or business in it, this would be a good place to go.

But New York is expensive. And it'd be tough enough as it is just to survive on $48k a year (after HEFTY taxes) by itself; it'd be damn near impossible to build a business on it.

The fact is, there is no set-in-stone exact value for a photographer's talents. There are too many variables involved, ranging from location to skill to personality to experience to you-name-it. But there is an understanding of how much is not enough, and $200 for a job (and let's remember, some jobs take more than one day) is not enough.

You could argue that $48k a year (max, gross) is higher than a lot of other, more "deserving" jobs, and you'd be right. But that would be neither here nor there and has no real bearing on the discussion at hand. Bringing it up is little more than an injection of pathos in an attempt to distract with emotion.

[StillFocus]

I'm not sure where you're getting that once you form an LLC you're suddenly subject to a higher tax rate. You file everything on your personal tax return as though you were an employee of the company, there is absolutely no difference whatsoever.

In fact, you'd probably see your tax liability decrease pretty significantly because of the windfall of new business expenses you get to write off.

[Rajah Sulayman]

Originally Posted by StillFocus

I'm not sure where you're getting that once you form an LLC you're suddenly subject to a higher tax rate. You file everything on your personal tax return as though you were an employee of the company, there is absolutely no difference whatsoever.

Sorry, I worded that poorly. I basically meant that you'd be paying tax as an employee (for yourself) and as the owner (for the business). Between that and higher insurance rates and social security payments and the like, you take home a lot less of your $48k self-employed than you do at a job in a company.

In fact, you'd probably see your tax liability decrease pretty significantly because of the windfall of new business expenses you get to write off.

You'd still have a lot of tax to pay for the business, too. It all adds up.

But, particulars aside, the point was simply that $200/job (not even per day, as the thread incorrectly presupposes, because some jobs span multiple days) is not enough money for anyone trying to build a career in photography (which is to whom the original statement was intended).

[StillFocus]

There is no extra tax for the business; that was my point. An LLC is not a seperate legal entity for tax purposes, all profit is treated as personal income for the owner(s).

This thread also "incorrectly presupposes" that anyone and everyone who wants to take pictures for a living is going to be doing so in New York. This whole thing is just one big fallacious mashup.

I just didn't want a misconception on taxes to scare people away from forming an LLC, which in my opinion is the first thing you want to do if you are serious about doing ANY business solo.

[GadgetRick]

Originally Posted by rajah sulayman

And don't forget that the $48k you make as you-as-a-business will be taxed a lot more heavily than it would if it had been made by you-as-an-employee. You're effectively paying double tax now, the tax that you pay as an earner and the tax that the business pays as a business. Plus you're paying more for medical, and social security, and all that fun stuff.

Mind you, I'm sure I'm leaving out a ton of other expenses, but you get the drift. In the blink of an eye, that $48k isn't quite the $48k you thought it was.

Not true. Actually quite the opposite. Because you'll have your own business, you'll be writing off expenses (equipment, mileage, etc.). In reality, it'll be like you're earning MORE than $48k per year (should be $52k as there are 52 weeks per year). Unless you don't write off anything--which would be stupid--you'll have much more of that money in your pocket.

[archersdad]

Originally Posted by rajah sulayman

I neither stated nor implied otherwise. In fact I explicitly and specifically said she didn't have to buy $50,000 gear. What I said was that when someone hires a photographer to do a job, they expect better than an entry-level dSLR and a stock lens.

Sorry, I misread that part. I have seen some nice work done with an entry-level gear setup. Yes, it is limiting, but then the creativity of the photog is relied upon to create better photos. What is entry-level today was very nice 5 years ago (if the tech even existed) and people turned out great work then.

Originally Posted by rajah sulayman

You could argue that $48k a year (max, gross) is higher than a lot of other, more "deserving" jobs, and you'd be right. But that would be neither here nor there and has no real bearing on the discussion at hand. Bringing it up is little more than an injection of pathos in an attempt to distract with emotion.

No, that is exactly the point I wanted to make. (we just finished up a lengthy section on this topic in my Ethics and the Professions class) Any time I see somebody complaining about the downfall of a traditional job, all I see is somebody whining. Markets tend to self-correct. If somebody is looking for a cheap photographer, they are never going to pay ten time mire than they wanted to; they'll do it themselves or ask a friend with a point-and-shoot to do it for them. If someone is truly good at what they do and have a decent ability to sell themselves then they will find work. Just because Ford makes a Festiva doesn't mean people don't ever buy a Mustang.

[GadgetRick]

Originally Posted by StillFocus

There is no extra tax for the business; that was my point. An LLC is not a seperate legal entity for tax purposes, all profit is treated as personal income for the owner(s).

This thread also "incorrectly presupposes" that anyone and everyone who wants to take pictures for a living is going to be doing so in New York. This whole thing is just one big fallacious mashup.

I just didn't want a misconception on taxes to scare people away from forming an LLC, which in my opinion is the first thing you want to do if you are serious about doing ANY business solo.

Exactly, you are taxed no differently..ask me how I know.

And I also agree, this is an argument which makes no sense. Doesn't matter where I live, if I have no extra expenses--or are willing to make significant sacrifices--you can live just about anywhere on this kind of salary. Will you be living large in NYC? Absolutely not, but you can do it--many more people do it than you think.

Also, the argument about an attorney being miffed if another attorney undercuts their pricing happens every day. Go see what the average attorney earns--it's not the huge amount you think. Same goes for many doctors as their malpractice insurance has skyrocketed. Insurance for a photographer isn't going to break the bank. Sure, it's gotten more expensive over the years but it's a (relatively) low risk type of insurance so the premiums would be lower. It's also not required for a photographer to have insurance whereas it is required for an attorney or a doctor to have some type(s) of insurance.

In short, I totally understand why the real pros are upset about how others price their work. Unfortunately, the barrier to entry in photography is much lower than for being a doctor or an attorney so this problem will only get worse. Although you should have better equipment, many do not. I've seen some, "photographers,"--who are earning money, btw--using some basic (and I do mean BASIC) consumer gear. Guess what, most customers don't know the difference and, unfortunately, don't care. I'm not talking the $20,000 wedding folks here, just the average customer.

When you're selling photography, you're not selling to another photographer, you're selling to someone who doesn't know any better. If you're providing better pictures than they'd get with a point and shoot--and they don't have the budget for the $20,000 wedding, they'll be perfectly happy with your photos for $1,000 (or whatever). It's not the photographers who don't charge enough you should be angry with, it's the customers who don't believe spending more for better quality is worth it you should be mad at.

[Rajah Sulayman]

Originally Posted by StillFocus

There is no extra tax for the business; that was my point. An LLC is not a seperate legal entity for tax purposes, all profit is treated as personal income for the owner(s).

My mistake, then. Consider the tax part rescinded. Though, really, it was simply one small point in the larger sentiment that $200/job is not enough to build a photography career/business on.

This thread also "incorrectly presupposes" that anyone and everyone who wants to take pictures for a living is going to be doing so in New York. This whole thing is just one big fallacious mashup.

New York was simply an example of one of the likelier big cities where a photography professional might look to work, but the point that $200/job is almost impossible to build a career on is equally valid no matter where you live.

And, honestly, I'm not even sure how we wound up wandering down the "is $200 a job enough to live on" tangent. The point that Storm was making was that $200 jobs as a whole bring down the value of the photography industry and photographers. The fact that $200 per job isn't a whole lot to live / build on didn't really come up until this thread.

I just didn't want a misconception on taxes to scare people away from forming an LLC, which in my opinion is the first thing you want to do if you are serious about doing ANY business solo.

An excellent point, sorry. I don't mean to let anyone think they shouldn't form an LLC if they want to go into business. In fact, not forming one could be infinitely more expensive, since it shelters you from liability.

[Rajah Sulayman]

Originally Posted by GadgetRick

Not true. Actually quite the opposite. Because you'll have your own business, you'll be writing off expenses (equipment, mileage, etc.). In reality, it'll be like you're earning MORE than $48k per year (should be $52k as there are 52 weeks per year). Unless you don't write off anything--which would be stupid--you'll have much more of that money in your pocket.

Honestly, I think we've gotten to the point where we're splitting hairs on this. The whole sentiment behind the statement was that taking "$200 jobs" devalues the industry. I'm not sure how we wound up on this tangent of "well, assuming a day per job and a job every day, that $200 per job = $48k per year."

For starters, the phrase "$200 job" was more general than specific, and he could have just as easily said $100 job or $300 job. Secondly, all the assumptions that were made in figuring out the annual salary are pretty presumptuous. Photographers never have a new job every business day of the year, and jobs are rarely neatly wrapped in one day.

The whole "$200 job = $48,000 salary" assumption is spurious and largely off-tangent from the sentiment of Storm's statement. I'm as much at fault for continuing that argument as anyone, but I think our energies would be better spent discussing the point at hand rather than deconstructing a flawed and artificial figure that wasn't even in the original article.

[Photoboothguy]

[QUOTE=rajah sulayman;926458]Honestly, I think we've gotten to the point where we're splitting hairs on this. The whole sentiment behind the statement was that taking "$200 jobs" devalues the industry. QUOTE]

See, this is where people get screwed up. The photographer does not choose his/her value, the client does. So saying "don't undervalue yourself" is misguided advice, because you have little control over it.

Anyone who has taken an intro to economics course knows that low barriers to entry will ultimately lead to no profit. If a business starts up and makes a profit, it isn't long before someone else says "me too!". If it's easy to get into the industry, more people will enter. This increased competition will cause prices to drop to the point where little or no profit is made. For more information, see the computer industry from 1980 to 2002.

Low barriers to entry are what's causing the decline in profit in the industry...not photographers charging too little. That's just a by-product.

And yes, your information on taxes was way off. I have an LLC for my photo booth business, and we're taxed as a partnership (owned by me and my wife), which basically means we just add the income to our tax statement. Starting an LLC costs a whopping $60 (your state may vary). If photography is a side-job, you get health insurance through your other job...or through your significan other if you are married (most professional photographers I know are married). Business insurance is only $300/year for me, and that covers all my equipment and $1M in liability.

Maybe we should have an honest thread about the true start-up and maintenance costs of photography...seems like there is a lot of misinformation out there.