As you might have already read on MicrostockGroup’s blog, the StockPerformer founders Luis and Oliver have published a business plan calculator for stock photographers.

How to use the Business Plan Calculator

The Business Plan Calculator uses five data entries to come up with a calculation of your future earnings potential.

• How many files will you produce per month?

This might sound easy at first. However, I believe there is a huge variation for most people. It doesn’t matter if you are a hobbyist who only gets to shoot during vacation and on weekends, or if you are a pro photographer with a schedule of contract shootings or weddings during one season and lots of spare time in another.

• What is your cost per file?
• What are your fixed costs per month?

The hobbyists will easily fill in this number with a $0. And if they want to, it’s their right to not consider money they would also spend on their hobby without offering images for sale.

For the more professional photographers you should not forget that equipment – for example your camera and your light – are wearing out during the use. So there might be cost involved when shooting for stock, even if you already have your camera for your other business. If you calculate these on a per-file basis or per month is totally up to you. A simple way would be to sum up investment costs (camera, lenses, light, other gear) and divide it by the number of months you are predicting to use those – $5,000 investment that you have to repeat after three year (36 months) would result in roughly $140 per month.

• For how many months will you produce?

This basically means for how long you want the calculation to run. 36 months is a good starting point, though the longer you run it, the better your results will look. I would recommend running it up to 5 years/60 months to get a long term view. But also just to get a closer look at the initial phase alone, you might want to enter something like a 12 or 18 in there and see if that’s what you want to do for the next year.

• What is your expected RPI per month?

Beginners will struggle mostly with this number as they have few indications. When you upload your first 100 images, the sales data you will get back is far too small to be a good assumption. StockPerformer is giving a range of $0,20 (for the amateur photographer in scenario 3) and $2 (for the stock factory) which is pretty wide. Still, I have no doubts that there are more real life examples of stock contributors who are making less than the minimum of those two while there are probably very few contributors going beyond the $2 (and in my honest opinion, it is very unlikely to be the “stock factories” I know). I am not known to be the one shooting in-demand lifestyle images, so my personal experience is certainly more on the bottom end of this range. Make sure to start with that and maybe run a few numbers with even lower starting points.

Actually even experienced stock photographers will not be able to come up with a good number right away. The problem here is: What you are seeing right now is partly the results of your work in the past – you might be seeing sales far above average on images that already have a great search placement in your agencies and keep selling regularly. What you actually need to find out before making a qualified prediction is how images are selling that you produced freshly within a more recent period, maybe the last 12 or 24 months.

If you want to make it even more interesting: Make a separate calculation for the images uploaded within the last 12 months; and then have a look at those images uploaded 13-24 months ago and how they sold in their first and their second year. Depending on the distribution channels, images can take some time to “settle in” with the search results, so maybe your images are doing better in their second year? In other agencies, the “new” factor is far more important, so images lose their early sales levels quickly. Depending on the agencies you supply, you can now adjust your RPI calculation for the latest images to get to more realistic values.

What to keep in mind when making calculations (and plans)

While the calculator is well made and easy to use, it holds a certain risk for its users:

The obvious one being that the future is hard to predict – are sales volumes going to be steady for the future? Will they decline? Or will the – at least for your personally – grow? While some people are reporting that their RPI is pretty stable over time, there is a number of people also mentioning that their sales per image are slowly deteriorating over time. The calculator also assumes that sales for the all images are staying constant over time. While I still sell images that I shot and uploaded in 2007, I’d think there is a general trend that images get some attention early in their life cycle but will drop down in searches. So this could lead to a slow decline for images uploaded in Year 1 of the calculation during the whole process.

The second risk are the users themselves: In my experience and/or opinion, most stock contributors tend to overrate themselves. Most likely me included. In a way this is understandable because if we were not judging our own efforts and the future on the optimistic side, we would most likely not plan for the future. But it ends up with a tendency to overestimate our achievements and our earnings potential.

Let’s just test the “Strategy 3” of the presented samples in their blog: When we enter the numbers given – 100 images per month, $0 costs, 36 months with an RPI of $0,20 per month – I come up with very nice numbers: In total I will make net earnings of $13,000 over the course of three years and at the end will make $700 a month:

However, this sample is called an “Amateur photographer shooting in his spare time”. This might accurately describe a huge majority of stock contributors. But how many stock contributors matching this description do you know who are licensing images for at least three years already? How many of them actually have 3,600 or more of images in their portfolios? I would say, this is rather unrealistic to assume for a hobbyist. The typical hobbyist will indeed upload 100 images per month – when he returns from a vacation or spent a long weekend shooting. But this is typically only happening three or four times a year. So I would say, for the average microstock contributor, a number like 40 images per month is a more realistic assumption.

What about the cost? Technically, you can easily say that you don’t apply any cost calculations at all. And it’s up to you if you want to think that way. But didn’t you buy that better camera mainly because you wanted to shoot in better quality for stock? Or didn’t you get that lens mainly for stock? Even hobbyists tend to spend money they would probably otherwise not spend as soon as they supply stock agencies. Maybe you even get a copy of Photoshop and/or Lightroom that you otherwise would not need? For the sake of being in favor of keeping it small, I would say a number of $30 per month spend on stuff that you would not buy without supplying to stock is still on the optimistic side.

Just change these two numbers and you will end up with quite different results: After 18 months of constant uploading you are just breaking the $100 per month mark. And as you need to supply multiple agencies to achieve that, you are unlikely to get to payout levels regularly.

This is why so many enthusiastic contributors are giving up far before that point. When you stick to your plan for six months and still get only $5 at agency A, $10 at agency B and maybe $30 at the biggest selling agency, how long do you stay motivated? It is totally understandable if agencies are talking about 200,000 or more contributors while actually only a very small fraction keeps uploading in the long term.

Does it mean the Business Plan Calculator is useless?

No, not all. It’s an interesting and cool tool. And I actually ran a couple of scenarios that match my personal experiences from the last two years – I still had problems finding the right numbers, although I’m keeping good track of my past data. But as I said from the start: Predicting the future always involves uncertainties and risks, so you’d better try out a few scenarios with optimistic and more pessimistic numbers when trying to find out your personal numbers. Make sure that you can live with the pessimistic results in case your original thoughts won’t come true.

And after all: Don’t overestimate the numbers you get from calculations like this. It’s one piece of information that – when used with care – can be interesting to look at. But it shouldn’t be the one and only thing to base your business on.

So hop over to the Business Plan Calculator and run some of your own numbers. At least it’s fun. If you love numbers like I do. 😉