Taking Care of CDBusiness
I was watching the
old movie "Strategic Air Command" starring Jimmy Stewart the
other night. God I love that movie - Colonel Jimmy doing what he loved
best, flying B-36s and B-47s and keeping America safe from communism.
Even with all of the glory the Air Force still had to keep track of
its resources. It cost a fortune to keep those 10-engine strategic monsters
in the air. Here's a partial list:
* The purchase cost of the aircraft
* Thousands of gallons of fuel for even the shortest flight
* Staff time for mission planning
* Crew time for six to eight hours of pre-flight procedures
* Training and payroll for all personnel
* All of the above for inflight refueling operations
* Etc., etc...
OK, you got me. It's all a metaphor for a photography business. I can't
fool you at all. But the parallels are almost scary. Just as the Air
Force must manage its resources, so must a freelancer.
Like Jimmy's Air Force, you have to purchase, maintain and upgrade your
equipment, pay for promotions, rent, auto, insurance, office supplies,
utilities and much more.
The Holy Grail of your business is your CDB - your cost of doing business.
The CDB is inexorable. It doesn't stop if you're not shooting. It rings
up a new running total every single one of the 250 working days a year
(including two weeks of vacation.) If your income does not equal or
exceed your CDB, you're losing money - no matter how much fun you're
Boston-based freelancer and photo-business lecturer Paula Lerner says
that there are two basic ways to figure out your costs. "You can
calculate your CDB on a daily basis or on a per-shoot basis. For a daily
basis, take your total annual costs and divide by 250. For a per-shoot
basis, count your average number of shoot days per year, and divide
your total annual costs by that number. Once you have calculated your
CDB, you can then see how much you need to make per day or per shoot
to cover your overhead plus a reasonable profit. The point of this exercise
is to see how much cash flow you need to generate to both run your business
and earn a living."
A typical CDB is a couple of hundred bucks per day - $50,000 a year.
Remembering that most freelancers only shoot about 100 days a year,
that means an average day rate of $500 - just to break even. If you
bill fewer than 100 days each year, the day rate has to be even higher.
If your CDB is lower, you can afford to bill less.
It's critical to remember that your CDB includes a salary for yourself
including a retirement plan, college for the kids, etc. A well-known
business axiom is "Pay yourself first."
Staffers doing freelance work "on the side" should figure
their CDB the same way - even if they're using their employer's facilities
for their freelance work. The way things are going no staff job is safe.
You'll need to get your business ducks in a row before the layoffs.
Your clients won't pay you more just because you lost your "day
Editorial Photographers has an excellent CDB survey-calculator combo
on their site. Do yourself and your colleagues a service by plugging
your numbers in. Not only will you find out your CDB, but you'll also
improve the overall database.
* Business Week for its "win-win" contract and considerably
upping their day rates.
* I'm aware of one metro daily that is re-evaluating its current contract.
I hope to include them in this space in an upcoming column.
* Sports Illustrated for its $150 work-for-hire "Faces in the Crowd"
* TV Guide for its indemnification clause. This should always be a deal
* Gannett's work-for-hire contract, which has the added indignity of
requiring the photographer to allow the company to use the photographer's
likeness in advertising and promotion.
Please let me know of any particularly
good, bad or ugly dealings that you have had with clients recently.
I will use the client's name, but I won't use your name if you don't
want me to. Anonymous submissions will not be considered. Please include
contact information for yourself and for the client.
Running your own business can sometimes be lonely. Editors present terrible
contracts and say, "Everybody else has signed it." Clients
say that no other photographer has balked at an all-rights contract.
How do you know that they're telling the truth?
Well, usually they're not. But you don't have to take my word for it.
You can hook-up with colleagues online and get the straight story. Both
the Editorial Photographers group and the NPPA have online discussion
areas. As I mentioned in last month's column, there is also a Group
for New York Times freelancers. Get online. You're not alone.
© 2002 Mark
Mark Loundy is
a visual journalist, writer and media consultant based in San Jose,