As a businessperson I use "ROI" (Return on Investment) often as a term to describe the appeal of any given job/task/duty/function.
I use it loosely to describe our functions as a photographer. Often I use ROI in discussions to describe abstract functions like unpaid testing, retouching or pre-production for shoots. Obviously these functions don't possess quantitative values to calculate true ROI. It's more of an quick-and-dirty evaluation of whether or not it makes "sense" to perform said function.
For example, I'm often asked about seeking paid testing from modeling agencies. Here's a situation where the ROI is quantitatively poor. For the rate that you can achieve versus the time and effort it takes to fulfill the shoot, your returns are going to be pennies on the dollar when you consider pre-production, shooting, retouching, cost of studio time. You might wind up making less than the minimum-wage employee at a McDonald's. Hell, your final price/hour (wage) might be so low that starving people in 3rd-world countries would be like, "No, I'm sorry. I can not take that job".
Another example is when you are given a tiny budget to execute an elaborate shoot just to land a spread in a well-known magazine. The cost may not even cover props, makeup, wardrobe pulls, location fees, gas, etc. But photographers jump at the opportunity to do so. The ROI is obviously piss-poor because when everything is said and done you might be actually net a negative ROI because you had to fund part of the shoot yourself.
Really? Negative ROI?
Yeah, negative ROI.
If we look at the term ROI loosely and apply it to our functions as photographers our immediate considerations become a little clearer. Should I spend my efforts booking paid testing from an agency where competition is fierce, or should I spend my efforts booking outside the agency where I can charge a higher rate because there is less competition? Should I spend my efforts trying to get into a small regional magazine that pays nothing or should I spend my efforts trying to book my next big commercial campaign that might pay my rent for 1/2 a year? Should I teach a 16-week course at the New York Film Academy or should I teach a 2-day LUCIMA Fashion Photography Workshop and make the same amount of money?
But it's not that simple is it? There's short-term consideration and there's long-term consideration. And neither of these variables are calculated into the ROI equation. While I could come up with some nice equation that looks more like an IRR/NPV calculation, I'm going to spare you all the math because it doesn't take a genius to realize that there are other non-monetary benefits or indirect monetary benefits from taking the job at NYFA, or shooting for a Genlux Magazine, or executing paid tests for Elite Model Management. The value of these jobs/duties/functions is not the direct financial gain but rather the increase in your "brand value" over time. That's another post.
But for the time being. Consider what you do on a daily basis and consider the ROI on these tasks. Are you getting some return on your investment? If it's not paid, are you at least getting some tangible/intangible return on your (hopefully just) time? How much are you really making per hour? If I were honest with myself, like any investment banker I'm making something around minimum wage for all the hours I put in. Some of these hours yield greater returns. Some of these hours yield nothing. As far as my paying jobs are concerned, thinking in terms of ROI allows me to cut through the bullshit and get at the heart of the matter. How much am I making after the costs are removed as a % of the cost. This should lend better insight to the worthiness of your paying jobs.
Also consider how long this has been going on? Have you been doing the same thing over and over again for years now? A former boss used to say, "Most of the time when people say they have 20 years of experience, it's really just 1 year of experience repeated 20 times". Have you been repeating what you know because you refuse to learn/grow? Sometimes it's good to invest in yourself and/or reinvent yourself. This industry is change. Fast. Evolve or die. I'm here to help if you need any direction, advice, education in this department.
I'll finish with a short story about paid testing from agencies. 2 years ago ago I met a photographer that got rejected by FORD Models LA when she requested paid testing. For whatever reason, FORD would not pay her to shoot paid tests for them. When I met her in person, she told me not to spend all my time trying to get paid from agencies. Why? Because the ROI sucks. There are so many bigger and better fashion photography jobs out there. Why get stuck on getting paid from agencies?
Today that same photographer is shooting big campaigns for well-known brands and also shooting editorials for Vogue. ROI for the win!