With the financial markets and economy in turmoil, small businesses — including photography businesses — may be facing a rocky road ahead. Here’s some advice for keeping your business in the black.
1. Say “no” to new expenditures. Don’t buy equipment you don’t need. Frankly, it always surprises me to see photographers splurge on the latest and greatest equipment, in any economy. If you can still work with your Canon 10D and get the job done, you’re ahead of the game. Camera companies want you to buy the best (read “expensive”), but the reality is you need to make purchases that will last for the long term. If you must purchase something, stay just this side of prosumer. A $7,000 camera is a big money-loser — and you don’t get paid any more for using it.
2. Limit your products. Product costs can eat your margins for lunch. Reevaluate ways to save. Don’t be afraid to limit your offerings to a customer base that may not mind limits. Proofing products is a great example. Do you really need them if your goal is to upsell your couple on an album?
3. Increase your markup. One of the best pieces of advice I’ve ever received. Make absolutely sure that your markups are marked up! I know a photographer who only marks up albums five percent over wholesale price; I don’t know how he does that and stays in business. A general rule of thumb: Mark up every product you sell by a factor of five.
4. Reevaluate your advertising. Magazine advertisements are one of the worst money-losers. You gain nothing in return for a two-year, $4,000 contract to advertise in a glossy magazine. There are much better ways get a return on your advertising. Think locally. The more specific, the better.
5. Team up. Photographers have been doing this for a long time. Partner with another photographer to attack a specific market, share in advertising expenses, even rebrand yourself. By teaming up you can take on more work, and your cost of doing business is automatically reduced.
6. Insource. Crazy idea, I admit. But have you looked recently at the statement you received from the Web designer or lab or album designer you’ve outsourced work too? My bet is your margin is significantly affected by outsourcing. Not only that, the quality of your products can also be affected. So consider insourcing — doing it yourself. It’s not for everyone (like people who don’t want to get dirty with the details). The bottom line is, if you can install efficient systems for albums, print orders or both, you’re going to make better profits.
[tags]photography business, photography advice[/tags]