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Author Topic: Profitable? Are you operating at a loss?  (Read 3245 times)

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« on: July 27, 2014, 01:56 »
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I teach occasionally at a university's photo club. This is part of teaching material. just plug in your numbers and you'll see your result.

*this is a very simplified version of break even analysis.
*earning vs time is more of logarithmic function. I assume arithmetic in this case to make it simple.


« Reply #1 on: July 27, 2014, 02:04 »
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These are sample portraiture cases. Most other cases shooting costs will be even lower except landscape.

« Reply #2 on: July 27, 2014, 02:17 »
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There are two ways to profit more. Cut costs(get free or low cost models) or more income(product better images).

In conclusion, if you're just enthusiast you'll clearly profit. If you're full time and can control costs/produce selling images. You'll also profit easily.

Cost of living is also a major factor. It is likely that you cannot be full time in countries like Japan.

« Reply #3 on: July 27, 2014, 07:45 »
+1
I just want to point point out that break-even works more reliably with static data, or a snapshot in time. I am not refuting your well done example, but want to point out that royalties keep going down and expenses keep going up (equipment, etc). Break even is a moving target. This is to say that calculating break-even in one moment in time could prove shorter than a later point in time, especially when more agencies like DP and FT keep cutting income.
« Last Edit: July 27, 2014, 07:47 by Mantis »

« Reply #4 on: July 27, 2014, 08:18 »
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I just want to point point out that break-even works more reliably with static data, or a snapshot in time. I am not refuting your well done example, but want to point out that royalties keep going down and expenses keep going up (equipment, etc). Break even is a moving target. This is to say that calculating break-even in one moment in time could prove shorter than a later point in time, especially when more agencies like DP and FT keep cutting income.

I agree. You seem well used to financial analysis than I. 

I have data on port with no upload at all for 2 years. The graph is in inverse log shape. Adding - log term might make the equation closer to reality or might make it way off.

Another interesting thing is that camera cost doesn't even matter much. Cost of living and cost per shooting session do matter more.

I also forgot to mention. To find break-even period just equate to zero and solve for n.

« Reply #5 on: July 27, 2014, 08:18 »
0
I just want to point point out that break-even works more reliably with static data, or a snapshot in time. I am not refuting your well done example, but want to point out that royalties keep going down and expenses keep going up (equipment, etc). Break even is a moving target. This is to say that calculating break-even in one moment in time could prove shorter than a later point in time, especially when more agencies like DP and FT keep cutting income.

I agree. You seem well used to financial analysis than I. 

I have data on port with no upload at all for 2 years. The graph is in inverse log shape. Adding - log term might make the equation closer to reality or might make it way off.

Another interesting thing is that camera cost doesn't even matter much. Cost of living/cost per shoot do matter more.

I also forgot to mention. To find break-even period just equate to zero and solve for n.

Uncle Pete

« Reply #6 on: July 27, 2014, 08:27 »
+1
Yes I operate at a loss. However, without Microstock I'd still be doing the same, at a bigger loss.  :) I'm not in this for the money, I was already shooting pictures for 40 years, before Microstock. Now I just have a place to sometimes market some.

If I was looking for work that brought in income, Microstock would not be a consideration. Neither would any other sort of photography. (like shooting for magazines...) Not saying that some people can't and don't make a living at either of those, just that it's very difficult, and the competition is tremendous.

I do this because I love it. Not because it's profitable or I have any illusions that it will make financial sense.

Mark Windom Photography

« Reply #7 on: July 27, 2014, 09:20 »
+1
You lost me at Profit=n/2.....


« Reply #8 on: July 27, 2014, 09:44 »
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You lost me at Profit=n/2.....

It's sum of arithmetic sequence, sum of your income. Basically, 2+(2+2)+(2+2+2). Which does not exactly model stock income as mantis mentioned.

Not accurate but it is suffice to see where it is needed to cut corners.

What really does will look like this with added negative log term which is a bit harder. Also, I'm too lazy to go calculate log term.

« Reply #9 on: July 27, 2014, 12:10 »
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* that must have been some serious coffee!  :o

« Reply #10 on: July 27, 2014, 12:27 »
+2
I teach occasionally at a university's photo club. This is part of teaching material. just plug in your numbers and you'll see your result.

*this is a very simplified version of break even analysis.
*earning vs time is more of logarithmic function. I assume arithmetic in this case to make it simple.


yet another example of GIGO -- if we could predict earnings we'd all be 'profitable'.  more decimal places doesn't make fuzzy data any more reliable.   

« Reply #11 on: July 27, 2014, 12:34 »
+1
I just want to point point out that break-even works more reliably with static data, or a snapshot in time. I am not refuting your well done example, but want to point out that royalties keep going down and expenses keep going up (equipment, etc). Break even is a moving target. This is to say that calculating break-even in one moment in time could prove shorter than a later point in time, especially when more agencies like DP and FT keep cutting income.

I agree. You seem well used to financial analysis than I. 

I have data on port with no upload at all for 2 years. The graph is in inverse log shape. Adding - log term might make the equation closer to reality or might make it way off.

Another interesting thing is that camera cost doesn't even matter much. Cost of living and cost per shooting session do matter more.

I also forgot to mention. To find break-even period just equate to zero and solve for n.

So we really are talking profit and how much of a profit, two different things. To your point if I profit $500 a month that won't cut it in the USA, but might in other countries/regions, etc.  so while I could never make it at $500, I could at $5000. So thread #2, which has been done a bunch, is how much of a profit do I need to make to..........

Pay bills
Make a living
Pay my tuition
Make my car payment etc.

And all of that is dependent on where you live so there are perhaps hundreds of right answers :)

« Reply #12 on: July 27, 2014, 12:57 »
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plus, depending on where you are in business.
if u r starting a business, it is expected your startup cost, will be high and you will not be reporting a net profit until at least 6 years. it is for this reason why the IRA will not come after you in the first 5 years. but if you are in the business for 10 years and not report a profit, IRA will be visiting you soon for an audit.

« Reply #13 on: July 27, 2014, 13:20 »
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For me the calculation is more simple:

Income earned from all photography sources - expenses that I tabulate for taxes every year = net profit (or loss)

My accountant does photography for fun.  For the first couple of years after I started in stock he would make derogatory comments about people doing businesses as a hobby and all the losses they had.  Last time he asked if I could e-mail him the URLs of some stock sites.  I don't make a lot compared to my real job but now that I've bought all of the equipment I really need I can make a decent percentage of profit by keeping expenses low.  However, if I really needed money I would get a job at a fast-food place or some other company rather than depending on photography.


 

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