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Understanding the Cost of Doing Business

Nikki HarrisonComment

Pamela Jean~Be Brave in Business

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In the April article, I talked about thinking like a business owner, not like a photographer.  Have you given that any thought?  Have you challenged yourself as to what thinking like a business owner means to you?  What does the phrase Cost of Doing Business mean? 

This article is going to address the Cost of Doing Business.  If there were one business aspect that is highly critical to the sustainability of your business it would be this.   Before setting your pricing, creating a sales system or developing your marketing plan, you must figure out your hourly CODB. 

You will start with the number of hours your business is open to clients.  In the example below we will go with 40 hours per week.  You will then go through ALL of the expenses you have in running your business.  Keep in mind, every business model is different, my expenses will be different then yours and visa versa, it is important to take the time to figure this all out according to YOUR business model. 

If your monthly rent is $1000, divide that by 4 (four weeks in the month), which will equal $250 and then divide $250 by 40, (40 hours per week open to your clients) which breaks down your rent to $6.25 per hour.  Do the same calculation formula for all of your expenses, add them together, then you will have your CODB per hour total.  It is safe to say this number will be around $200 per hour to unlock your doors to your clients.  Keep in mind; this number does not reflect your Cost of Goods Sold.  That is a separate from your CODB.

Here is a table to help you visualize;

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You will start with the number of hours your business is open to clients.  In the example below we will go with 40 hours per week.  You will then go through ALL of the expenses you have in running your business.  Keep in mind, every business model is different, my expenses will be different then yours and visa versa, it is important to take the time to figure this all out according to YOUR business model. 

If your monthly rent is $1000, divide that by 4 (four weeks in the month), which will equal $250 and then divide $250 by 40, (40 hours per week open to your clients) which breaks down your rent to $6.25 per hour.  Do the same calculation formula for all of your expenses, add them together, then you will have your CODB per hour total.  It is safe to say this number will be around $200 per hour to unlock your doors to your clients.  Keep in mind; this number does not reflect your Cost of Goods Sold.  That is a separate from your CODB.

Here is a table to help you visualize;

Now let’s analyze a session.  I would like for you to have an understanding of how to figure out how much you are making, or losing on a session.  In this example, I will use a Newborn Session.

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The newborn example is why many photographers find themselves to be a starving artist.  Perhaps you are that photographer.  Do you feel like you are working hard and creating a lot of cash flow, but at the end of a month you don’t have as much money in your account as your thought your should?  Chances are your CODB and Sales are not in line, there is a disconnect in your business.  If you are out of balance with your CODB and time spent with each client there are a several angles to look at:

·      Consider raising your prices.  Depending on your market and your quality of work this may or may not be a good option.

·      Reduce your production time.  If you can cut back on how long the session is, your production time etc, you can get things in a better balance.

·      Increase your sales.  Be sure you are not leaving any money on the table in the sales room.  Create a solid sales system and stick with it!

·      Cut back on expenses, become more frugal with office supplies, phone bill etc.

All businesses are not created equally.  It is so important that you focus on your business model and focus on your financial goals.  Understanding what your Cost of Doing Business is imperative to your business and personal success!

If you would like more information on my Be Brave in Business Cost of Doing Business Coaching Program you can reach me at pamelajean.anewlife@gmail.com.  I do have the Excel Spreadsheet available for download for only $25 click on this  link;  https://pbox.photobiz.com/form/pamela-jean-bebrave-codb-and-free-7-steps-to-successful-sales 

All Chasing Light Members will also receive the 7 Steps to Successful Sales for FREE, an exclusive for Chasing Light Members only. 

 

 

Start thinking like a business owner, not like a photographer

Nikki HarrisonComment
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Pamela Jean ~Be Brave in Business
 

I can be emailed at pamelajean.anewlife@gmail.com
www.PamelaJeanANewLife.com 
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What have I done?!

When I started my first studio 29 years ago, I gave myself the title of “Professional Photographer”, joined my state and national association, and purchased equipment that other professionals used, therefore that made me a professional.  It didn’t take long for me to realize, that having the title of professional photographer didn’t mean a thing when it came down to it.  In reality I was a business owner.

I would dare say that most photographers and artists did not grow up with the goal of owning their own business.  But here we are business owners.  So what now?  How can we turn our passion and love for our craft into a viable income?   How can we make a living doing what we love to do?

Start thinking like a business owner, not like a photographer.

Here are 5 keys to business success that I will expand upon in upcoming months:

1.     Cost of Doing Business; how much does it cost you to run your business?  What is your hourly expense rate?  What is your profit margin on every job you do?  Do you have your prices set to where you will be profitable on every job?

2.     Pricing Strategy; what is your pricing strategy?  Do you know why you have your prices set as they are, or are you taking a wild guess?  You must have an understanding of the cost of running your business before you can set your prices.

3.     Sales System; Do you have a successful sales system in place to reach your financial needs and goals?  Are you maximizing the sale of every client that you serve?  Are you order taking or serving your clients properly?

4.     Branding & Marketing; are you successfully creating desire for your work?  Have you positioned your studio to be the most sought in your area?  Do you have a yearly marketing calendar ready to promote your business?

5.     Purpose & Systems; Do you have an understanding behind everything that happens in your business?  Why do you do what you do?  Do you have systems in please to maximize efficiency and success?

 

Buckle your seat belts friends; we are in for a great ride exploring the aspects of running a successful business.  I look forward to sharing my knowledge with you and cannot wait to see your businesses grow and help in reaching your financial goals!

Business Corner with Pamela Jean - April 2018

Business CornerNikki HarrisonComment
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Lets get to know a bit about Pamela.

You have been a partner in a very successful Portrait Studio in Tulsa, OK for many years, as well as long before that in another state.  More specifically, you are the reason behind the success of the business side of the company.

What set your methods apart from the rest?  2018 began my 29th year in the photography industry.  From day one, I viewed my studio as a business.  Not a hobby, or a personal passion, at the age of 21 I became a business owner, that is in the business of photography.  My mindset out of the gate had nothing to do with my hobby or love for getting behind the camera.  It was always about providing for and feeding my family.

Where do you think your methods exceed where others fail?  The intense business mind and drive to make a living and provide for my family, I believe is the difference.  I am able to balance the creative mind and the logic business mind.  It doesn’t matter how incredible an artists work is if they cannot make a living creating their art, their efforts are for naught. 

What is the first piece of advice you would give to a photographer who feels they are ready to open shop, and start charging?  First and foremost, understand what it means to be running a business.  You are not just a photographer, you are a business owner.  If a photographer doesn’t understand what their Cost of Doing Business is, they will fail.  Pricing, sales goals and marketing strategy decisions must be made based on how much it costs to run a business.

What is the number one thing you see photographers in business doing, that causes them to have lower sales?  Hands down confidence in themselves, their self worth and ability to stand up for themselves and charge what their business requires them to charge.  There is a disconnect there.  I always say “Kindness is not a Business Plan.”

Marketing is not a one size fits all.  Every market is different and comes with its own set of struggles and opportunities.  What would you suggest as a marketing opportunity that would work widely for most markets?  Marketing is so complex and there really isn’t one thing, or an easy answer.  It takes many campaigns, utilizing many avenues.  I do believe in Charity Style Marketing, this can be targeted very specific to a studios target client.

How do photographers get out of their own way?  Most photographers lack a business plan, end goal and confidence in their ability to charge a certain amount of money for their work.

The world is changing so much, social media, digital photography, iphone photographers, etc.  Do you think the High School Senior market is slowing?  I definitely see a change and shift in the senior market.  I can’t say that it is slowing, but it is evolving from traditional senior portrait sessions to unique “reality tv” style of experiences and photo shoots.

Do you think Instagram has changed how our youth value photography?  Yes for sure.  Today’s youth is inundated with pictures.  Beautiful portraits have gotten lost and devalued in the shuffle of social media.  However, I still believe today’s youth appreciates experiences, professionalism and desire to feel good in front of the camera.

Does one need to live in a metropolis these days to be successful?  Not necessarily, there are pros and cons to metropolis based studios and small town based studios.  I think there is a business model to accommodate either.

I have heard many times lately that art doesn’t sell, the only photographic styles that sell are classic portraits, family and children.  Do you believe this to be true?  I believe art is very sellable, but is an extreme niche’ orientated.  Very specific marketing to create desire and build and audience is imperative.  I would expect art will take longer to reach and touch the general population.  Do you have any advice for photographers that prefer to offer a more artistic style?  Building the desire to create a more specific niche’ body of work, will take more time to reach the target audience, a marathon not a sprint.  My suggestion would be to establish a business plan that encompasses the art and traditional portraiture.   Building the desire for the art along the way.  While supporting the business with the income of the traditional portraiture.  Over time, if effectively done, the artist will be able to transition into creating the desired art only.

You offer mentoring and business packages for new, as well as mid to late level career photographers, to guide them and assist them with sales and marketing their company.  This is an invaluable service and not widely available.  How can potential clients find you and get in touch to discuss you helping them?  I have a drive for helping photographers see their value,  change mindsets and assist in building profitable businesses.  I can be emailed at pamelajean.anewlife@gmail.com
www.PamelaJeanANewLife.com 
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I love and adore you as a business woman and as a dear friend.  Thank you so much for sharing your wisdom and knowledge with everyone!  Nikki, you sincerely are a soul sister to me.  Our paths were meant to cross and I am thankful beyond words.  Your pure talent puts me in awe.  I love and adore your work, I am one of your biggest fans!