A lot of newer photographers seem at a loss as to how to charge for their services. I know I was. This is an attempt to explain professional billing and licensing practices for photography. It is not a comprehensive explanation, and there are many resources available online that go into much greater detail.
Creative Fee + License Fees + Production Costs = estimate
To pay you a small amount of money and ask for full unrestricted use of your images for all time is unreasonable and unacceptable.
To expect you to have a set rate for a production with as many variable costs as a photo shoot is unreasonable and unacceptable.
You charge them your creative fee, a low license fee for specific things in a limited amount of time, and your production costs.
Your creative fee when you start out should be slightly higher than your CODB (cost of doing business). Google that to find a CODB calculator and figure out your own exact number.
Your creative fee is also an estimate based on how long you think the shoot will take. If they drag their feet and you shoot for 14 hours instead of 6, make sure you’ve put overtime options into the estimate. This is why most pros never use the term “day rate” anymore.
The key to making money in photography is the license fees.
Go look at the pricing for stock agency images to get some numbers.
Say the group you’re going to be working for is just starting out and can’t pay much, so you charge them your costs plus a low license for the first year, but for each additional year you ramp it up. Make them come back to you to get permission to use the images next year. Make them pay to reuse images, and upon renewal they have to select the usage licenses they want, so if they want to put a picture on a bus that’s a separate charge from the license to print fliers and put them on cars at a supermarket. Make the license fee slightly cheaper than what they’ll be charged for another shoot, so they’re more likely to want to simply renew the license than have you do an updated set on the same subject. That way you’re making money for a shoot you already did and can continue to rack up more gigs. Plus, if they don’t renew the license, as long as your creative fees and production cost charges covered your cost of doing business, who cares, you’ve moved on to other work, and continuing this policy with all your clients means eventually you’ll make more from licensing your images than from creating new ones.
Your license fee for the first year should attempt to cover all the uses the client thinks they might want. You show them a breakdown of many possible uses and make them choose what ways they really think for which they’ll use it. Again, see stock agency sites for more info on how to break it down.
So, they buy the licenses they think they need. For example, a small startup surf magazine might want to print it in the magazine once, be able to make posters, and be licensed to use the image on their web site. Make them sign an agreement that outlines those limitations and the term of the license. One year is usually good. Also make them credit you and note your copyright any time the image is printed. If they later want to print an image on a t-shirt, they owe you more money. If they want to make postcards, they owe you more money. If they want to make a slide and project it on the building outside a concert, they owe you more money. They will have seen the breakdown during the estimation process, so it should be clear that they did not pay for license to utilize your images in that way.
Before you start shooting, get the signatures.
Before you hire any crew or rent or buy any supplies, get a deposit for 50% of the total estimate.
Do not be afraid to estimate $15 per person on the shoot to buy lunch.
It’s your art, and you have the only say in what happens to it.
It’s your business and you need to say “no, this is how professional photographers bill for services” when someone is trying to take advantage of you.
Note: This post refers mostly to advertising work. Editorial is handled differently than work for commercial clients. Often you do editorials more for publicity than direct financial gain. Editorial means your ideas make it on the page though. If it is called “editorial” and someone is telling you how to shoot, it isn’t much of an editorial for you, and that isn’t a very good promotion of your work, so you should probably charge regular rates unless the exposure offered is really really good. As with all things, negotiate your way to harmony.