Afterexposure Photography

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Posts Tagged ‘Business’

[b]ecker's Crash Course

What a ride that last two days have been! Calgary was host to Becker thanks to the efforts of Patrick Kornak, (and Svetlana, and crew) and the Saturday presentation was a blast. And so was Friday night group meet. And so was Saturday night post-event… and I’m sure that the Sunday gang is going to be just as jazzed as we were to connect with fellow photographers, hang out, and ‘get it’.

I still haven’t distilled all the info and made it part of my DNA yet. It’s still percolating – some of the practical stuff is right at the top of my conscious mind – and some is bubbling around in my sub-conscious, making those all-important associations with everything else I know and am.

But I can tell you the experience was worth it.

I think the most important lessons were those about connecting – and not just with other photographers – but with customers and vendors too. That was a biggie; and not because it was something new to the audience, everyone knows ‘networking – yeah it’s important’ – that’s NOT it. It’s more about the quality and experience of those connections that has the biggest effect.

And there was a TON of info about the mechanics of why and how he does business, but that really serves more to illustrate the underlying philosophies, and in return how those practical things enable him to deliver consistently solid value every time. Nice.

Oh, and it was (just) warm enough for us to run outside and get a real-time example of how he works with subjects – even if he only has seconds to do it.  He shot a newlywed couple for 5 or 10 minutes, and then our headshots – all 90 of us – something like 2100 images in all – in the other 20 minutes. And not once did he say ‘smile for the camera’ – he didn’t have to! Again, nice.

Here is an iPhone / thebestcamera app image of him in a race against frozen fingers:

@thebecker - work'in it

@thebecker - work'in it!

So an open call to everyone who attended – from either day – I’ll see you at the [b]school.

And if you don’t or can’t join there, keep an eye out here – there will be a group meeting in a couple of weeks – comment here or email me if you’re interested in some of this kool-aid.

… and if you are trying to place my name with a face – I’m the Pentax shooter who wore Hawaiian shirts 😉

Web hosting: You get what you pay for!

Well, it’s renewal season around the ranch, and I had the most interesting experience with GoDaddy.

I renewed my domain name (afterexposure.com) with them; the price was right, and I had no prior complaints about their dns or registration process.

After I paid, I noticed I had a ‘web hosting credit’. Huh. Neat, I guess I could use it to pay for the web hosting with them, which was also up for renewal.

So I selected my domain, and applied the credit. It said something about taking a few minutes to show up in the control panel, so off to bed I went; visions of two more years of cheap web hosting dancing in my head.

The next day I was sad to see that the hosting credit wasn’t applied to my site, but had created a new, blank site. Ugh.

So I email customer support… no dice. The reason: hosting credits can’t be used on a renewal of a web hosting package…. WTF? That has to be one of the stupidest things I’ve ever heard.

But lucky me, I have another hosting company for a different domain in the .ca TLD, so I emailed them:

“Hey, can you split off part of my hosting package for a second domain?”

Their answer:

“Sure, just send us the domain name and we’ll set it up. Free.”

W-O-W!

So I did, and they did. Within the hour they had sent me the new DNS entries, and shortly after that I had instructed GoDaddy to use these new entries… and -POOF-, I was in business on the new site.

They have a self administration page, so re-creating my email address was a snap. And I ftp’d a holding page to test it out; it’s all there.

The name of this wonderful hosting company?

namespro.ca

I pay a little more than I did at GoDaddy, but not by much, and I get full control; not like the template-based ‘WebSite Tonight’ crappus (that’s latin for ‘crap’, FYI) that I was using.

Now I just need to nail down a decent web site editor…

Biz Plan, Part 2

Finally, time to look at the business plan again. My timing for these posts is a bit off, but that’s more to do with trying to pace my progress here in an inverse way with what’s going on at work. A few months ago all indications were that we would wrap our projects up and be gone by now. Today, it’s more likely we’ll at least get to complete the projects, which satisfies my techno-geek self. Will I still be there in the new year? That’s still not clear, so while I have time I need to complete a bit more groundwork here.

Homework Check:

Last time I left you with some jobs to do:

– Find out what others in your area charge for what you want to be doing. Here the range is $2k – $6k per event

– Gather costs – for yourself and your business. It will help set a realistic monthly budget for both, and you can estimate a good monthly salary.

The Math:

Really, it can be as simple as Income – Costs = Profit

I think a lot of folks screw this step up and make it more complicated (and unrealistic) than it needs to be. For example, you could make some assumptions about a new business, like Profit = Zero, and the math gets much simpler:

Income = Costs

If you compare the results of the homework, it should be obvious that your monthly costs are going to need to be balanced by your income. I don’t know why, but this is a surprise to some people, and they make a bunch of arm-waving noises about how this doesn’t apply to their situation, or some sort of magic should happen in six months, or they plan to land some big deal in Year 2….  … yeah, whatever. Ain’t happening. Not in a solid plan, anyway.

Specific to photography I see lots of ways to spend money; gear is the obvious choice, but so are conventions, printing marketing materials (business cards, photobook samples, glossies…), auto expenses…. and accountants and lawyers to help you with the leftovers… remember to jot those down too.

Now, one thing should stand out, at least it does for me … all of the things that hobbyists wince and whine about, like the cost of good equipment, are much less than the #1 line item of cost in the plan: your own needs! Your cost of living is going to vary, but if we pick a round number as an average, I bet $5000 a month is about right. I could go to $10K, and use more rough ‘order of magnitude’ estimation (a true life skill … taught to me in university, in astronomy class, of all places!). But $5k splits the difference between $1k and $10k, and it’ll make the math easier later on.

Let’s add up some costs.

Salary (or repayment of shareholders loan, or dividend, or whatever your accountant wants you to call it): $60K

Gear: New body, new glass, new computers, software, monitors, printers, that wireless thingy…. oh, allright… $15k. No? Ok, $20K. Believe me, it won’t matter, it’s rounding error.

Taxes, fees, insurance, various and assorted bloodsuckers: $10k

Conventions, Marketing, and ahem ‘fun’ stuff: $5k (it’s year one, so suck it up!)

Where are we? About $100k. Now, slap 50% on that, because one day you’ll want (or need) to retire. See, I told you that $1500 lens would start looking like rounding error!

Are we done yet? Well, not quite. We don’t have the actual shoot costs yet; the ‘cost of good sold’. Assistants, consumables, travel, food, disk space, print / production items that are bundled into the package prices…

Package Prices? Say what?

Ah… and there is where all these costs go – into quotes based on uplifts to the package price. So you can develop a package price, but it’s going to be a ‘no frills’ package, in fact you may never tell anyone what it is, because really, it’s the base cost of a shoot that you MUST cover, or go broke.

For example, if you know that you are going to have 50 ‘Event Cards’ for guests to take home, so they can find images that they can buy prints of online, or even buy the photobook of the event from… there is a fixed line item of cost. But if you don’t shoot events, maybe just a hundred cards a year is ok.

How does the math work then?

For something like $160k of annual fixed costs (notice how that number keeps creeping up?), spread over 10 months (because you won’t be working for two of those months… remember Wayne Cotton, and his Success Calendars!)… you have simply $160k / 10 months = $16k per month, as a base cost.

Since months are handily divided into four weeks (of about 4 days), you are looking at about $4k per week, and about $1000 per day. If you really wanted to, you could estimate this as $100/hr (including travel) as a minimum.

But that’s a bit eager, don’t you think? How about if we only shot 50% of the time? After all, you won’t be 100% booked (and shouldn’t be…. that’s another post…!). That would DOUBLE your shoot costs. So really, $4k per event might cover a small wedding. But a bigger event, with a 2nd shooter, some ‘included’ things … that could easily be an $8k shoot. And how does that stack up with Homework item #1… what others are charging? For me, it’s right in the ballpark. I love it when a plan comes together!

And when you realize that your costs are covered you won’t be thinking about paying bills or eating cat food.

You’ll be mentally free to take really rockin’ images. After all, that’s why you got hired, right?

So, are we ready to go get our Amex business card and buy everyone a celebration dinner and write it off?

Errr… no.

This isn’t a business plan… at least not yet.

Homework

This one is much easier; given you know what you could charge, and how much you cost, lay out the next 24 months. For each month draw your salary, but be realistic on income. I’ve done this step, and it’s frightening. If you don’t have a war-chest now, my advice is don’t start until you do.

As a template, I did this for my projection:

Month 1 (January 2010): Zero income

Month 2 (February 2010): One event

Month 3 (March 2010): One event

and so on. I ramped up my income from zero to ‘normal’ over the entire 24 months, and even in the 24th month I didn’t assume to be 100% booked, because of the cyclical nature of wedding date selection.

And 24  months @ $16k/month cost …. Yikes! Yowza! That’s $384k!!! And I haven’t booked a single wedding yet! No wonder so many small businesses fail!

Well, without some spit and polish it’s still not quite a business plan, but it is an eye-opener!

Getting ready to write your business plan…

Ok, quick recap: There are only three steps in my world domination startup plan to transition to full-time photographer:

  1. Preparing the Business Plan
  2. Preparing for Business
  3. Marketing the Business

The first step, the Business Plan, might be the most overlooked from what I’ve read online. All the administrivia of starting a business is in step 2, so it’s just plain boring (I know – I’ve already written the draft for it, and it needs serious help). Number 3 is a cakewalk, because apparently everyone is selling marketing and appears to be an expert in it. Besides, it’s fun and exciting, and you get to ‘write off’ all that cool stuff… right? (Answer: No, not so fast….)

This business plan is going to drive the thinking and the documents (think: contracts, usage rights, etc) in step 2,  so it’s important to know what your focus is going to be. Just knowing that you want to be a photographer isn’t enough. You need to know what kind of work you enjoy – or you risk being driven away from the very thing that got you started. Ultimately the business plan should show that what you are going to do has a good chance of succeeding, before going too much further in the other steps.

Example: Photography

I’ve been investigating different styles of photography, experimenting with each, to know which I’d enjoy doing, and what kinds of demands each would place on me in terms of time, investment, and effort for return. Your likes, market and decisions are going to be different than mine.

For example, I do free shoots with models on ModelMayhem.com. Fun, yes; but a full time paying gig? No; by definition, these ‘TFP’ (Time for Prints) are exchanges of time between participants. Without additional investment and a niche style to offer it’s not likely to turn into a revenue stream in the market where I live. Portrait and beauty photography is at best a component of the business, but in a limited fashion market I don’t see doing occasional runway and designers seasonal catalogs as full time work.

Food is totally different; I’ve even purchased special serving dishes that are modern and non-distracting. If I could make a decent living shooting nothing but olives and toast, I’d do it in a heartbeat. But the reality is that a few hundred dollars for an afternoon shooting plates as they come off the line of a local restaurant doesn’t happen frequently enough to be a sole source of income. Again, something I could do, but not something that is going to be 80% of the business.

Nature photography is something else I like, mainly because I get to hike in the mountains to do it. But the kinds of shots that sell are those requiring a significant investment of time and effort, and I consider a form of art photography, there may not be a client commissioning the work – so the return on the investment may not happen for some time.

Weddings and portraiture are a common bread and butter operation, but would I enjoy them? A local model connected me to a couple she knew that needed a free wedding shoot; they had blown their budget and hadn’t considered hiring anyone for their wedding photos. I’ve heard all the cautions about not shooting your first wedding solo, but after discussing this with the couple and showing them my portfolio of non-wedding shots, we decided to go for it. They agreed with me that it would be nothing if not fun, because the alternative would be to rely on the snapshots of family and friends only. I absorbed as much knowledge as I could in the month I had before the ceremony, and it looked like I wasn’t going to enjoy it at all…

But guess what? I did enjoy it! The shooting was fun and relaxed, as was the whole day. Now when I read of photographers that don’t enjoy weddings I wonder why…  Bridezillas? Challenging shooting locations? Tough schedules? Isn’t that part of the challenge? Anyway, I knew I could safely add wedding photography to my interests; I may or may not shoot them solo again (with a second shooter, or as a second shooter would be nice…) but it’s something I know I can do, and I know how much of a time commitment it is, too.

So I know what I can and can’t shoot and still keep my sanity; but could I still pay the bills?

Homework:

Find out what others in your area charge for what you want to be doing. But don’t just price shop; seriously consider what you like and dislike about their style, their price structure, and where you think they sit in the market. Simply emulating someone who low-balls price because their spouse supports their ‘business’ with a full time office job salary is a formula for disaster!

I did this and found that the range is pretty broad; and I’m not talking about the $500 craigslist shooters, either. The low end is around $2000; and there are a few whose non-upgraded rates are double that; so assume triple once a few options are chosen.

Costs are another thing to gather… if you don’t know what you need to live on per month, then it’s time for a monthly budget. Because I’m already self-employed I’m careful to not overspend; getting to the end of the year and finding out that you still owe the taxman $15k is no fun at all.

Tomorrow:

We do the math!

Ready for a business plan?

Ok, quick recap: There are only three steps in my world domination startup plan to transition to full-time photographer:

  1. Preparing the Business Plan
  2. Preparing for Business
  3. Marketing the Business

The first step, the Business Plan, might be the most overlooked from what I’ve read online. All the administrivia of starting a business is in step #2, so it’s just plain boring (I know – I’ve already written the draft for it, and it needs serious help). #3 is a cakewalk, because apparently everyone is selling marketing and appears to be an expert in it. Besides, it’s fun and exciting, and you get to ‘write off’ all that cool stuff… right? (Answer: Not, not so fast….)

This business plan is going to drive the thinking and the documents (think: contracts, usage rights, etc) in the next step,  so it’s important to know what your focus is going to be. Ultimately the business plan should show that what you are going to do has a good chance of succeeding, before going too much further in the other steps.

Example: My Focus

I’ve been investigating different styles of photography, experimenting with each, to know which I’d enjoy doing, and what kinds of demands each would place on me in terms of time, investment, and effort for return. Your likes, market and decisions are going to be different than mine.

For example, I started doing free shoots with models on ModelMayhem.com. Fun, yes; but a full time paying gig? No; by definition, these ‘TFP’ (Time for Prints) are exchanges of time between participants. Without additional investment and a niche style to offer it’s not likely to turn into a revenue stream in the market where I live. Portrait and beauty photography is at best a component of the business, but in a limited fashion market I don’t see doing occasional runway and designers seasonal catalogs as full time work.

Food is totally different; I’ve even purchased special serving dishes that are modern and non-distracting. If I could make a decent living shooting nothing but olives and toast, I’d do it in a heartbeat. But the reality is that a few hundred dollars for an afternoon shooting plates as they come off the line of a local restaurant doesn’t happen frequently enough to be a sole source of income. Again, something I could do, but not something that is going to be 80% of the business.

Nature photography is something else I like, mainly because I get to hike in the mountains to do it. But the kinds of shots that sell are those requiring a significant investment of time and effort, and I consider a form of art photography, there may not be a client commissioning the work – so the return on the investment may not happen for some time.

Weddings and portraiture are a common bread and butter operation, but would I enjoy them? A local model connected me to a couple she knew that needed a free wedding shoot; they had blown their budget and hadn’t considered hiring anyone for their wedding photos. I’ve heard all the cautions about not shooting your first wedding solo, but after discussing this with the couple and showing them my portfolio of non-wedding shots, we decided to go for it. They agreed with me that it would be nothing if not fun, because the alternative would be to rely on the snapshots of family and friends only. I absorbed as much knowledge as I could in the month I had before the ceremony, and it looked like I wasn’t going to enjoy it at all…

But guess what? I did enjoy it! The shooting was fun and relaxed, as was the whole day. Now when I read of photographers that don’t enjoy weddings I wonder why…  Bridezillas? Challenging shooting locations? Tough schedules? Isn’t that part of the challenge? Anyway, I knew I could safely add wedding photography to my interests; I may or may not shoot them solo again (with a second shooter, or as a second shooter would be nice…) but it’s something I know I can do, and I know how much of a time commitment it is, too.

So I know what I can and can’t shoot and still keep my sanity; but could I still pay the bills?

Time for the math… tomorrow!

The Business Plan

There are two parts to the business plan itself; a written description, and the math that backs it up. I generally work my plans in reverse, starting with my financial outcomes and working backwards through the math, the assumptions, and the constraints until I get a handle on what would have to happen to meet my objectives.

My basic assumption in preparing the plan was that it would take two years to go from zero to a stable goal state. I define this ‘stable state’ to be when business has grown such that revenue is equal to costs. If I exceed the stable state in real life, great, but if the math proves that the stable state is a challenge before I even start, then I know I have to tweak the variables first (or abandon the plan for now…!)

Starting with some round numbers, I listed all my costs… including my salary. I know what my personal minimum monthly budget is,  so that was easy. I included gear, technology, and categories for auto and studio expenses. Once I saw the bottom line the studio was the first to go; while running a studio is possible, shooting events like weddings and leaving a studio empty is financially unattractive. Yes, I could hire someone to ‘mind the store’, and even hire studio shooters for walk-ins, but the first few years are going to be stressful enough on their own, and I can rent studio time if I need to. I threw in budgetary numbers for marketing and networking: $12k, and if you are starting from scratch you’ll need all the fees to set up a business – about $6k.

I then created notional shoot packages for the various styles, and 24 months of estimated costs and number of bookings for each, starting from zero bookings and increasing to a stable state.  I know from using Wayne Cottons Success Calendars what a realistic % of available time is; by setting the bar to this number I know I won’t achieve a stable state by working 8 days a week, and hating it…. it’s 50%, by the way. This gives me a ‘Day Rate’; if pressed for a number I know I can simply divide this number by 8 to 10 hours for an hourly rate; or multiply it out for longer terms projects, like weddings. And I know that if I’m charging this rate and I’m 50% booked I’ll still hit plan. This may sound overly padded, but remember that giving up at least one day a week to non-client administrative tasks is a minimum the first year; count on more time to set up vendor accounts and network with others.

Using an example rate of ~$1000/day yields wedding packages in the $2500 – $4000 range; which is in line with the wedding photography market here.  At the low end it gives me time to work with the couple before the shoot; to attend the rehearsal if the venue is new to me, and time to prepare the proofs and produce the final images. At the high end I have time for a risk-reversal engagement shoot and no-hassle photobooks for the couple and their parents. I could price them lower to fill my calendar and still hit my targets, but at the expense of keeping current with the best vendors for the materials I need; technology, album printers, web services… you can see where that road leads!

Working from this rate I can set the pricing of other packages accordingly. Single photoshoots of a half-day: $500 plus ‘team’ expenses for assistants, make-up, hair, styling, and location. Headshots are even simpler; filling a whole portfolio; more complex. I do consider the revenue streams of additional images sold as stock, or to family and friends of wedding couples, but I don’t include it in the plan at this point; simpler is better!

Next up: The heavy lifting – or – Everything you were afraid to ask about setting up your own company, but really, really need to be aware of.

Baby Steps

If you’ve strung together some of the posts here, or from my twitter ‘tweets’, you’ll know I’m working through the planning, opening, and marketing steps of my photography business. It’s a fun process; certainly challenging, sometimes confusing, and potentially overwhelming.

To cope with that I’m treating like any project I do (I’m a project manager in ‘real life’) which means it has the usual boundaries; a scope, a schedule, and a budget. In plain english this means I have a deadline to do things – and I plan to run out of things before I run out of money.

I’ve often said that to avoid the paralysis of planning a project, you should ‘just start’. I usually start with the most basic of plans – a skeleton plan – and I flesh it out as I go. If I’m having a good week I take some time, usually Friday mornings, and look at where I am, and what’s next. If I don’t think that there is enough detail, or if any individual step takes longer than an hour to do, I usually break it up into smaller steps. This lets me work on it as I have time – which is almost never in 8 hour chunks.

I’m starting this with only three BIG steps, so it doesn’t get much simpler. At the end of each step is a simple question: “Should I keep going?”. This lets me pause at the end of any step, limiting my investments of time, money, and commitments if the answer is “No.”, and figure out if I can make it a “Yes!”. Here they are:

  1. Preparing the Business Plan
  2. Preparing for Business
  3. Marketing the Business

How far have I gone with my efforts so far? Well, farther than I’ve written about in the past, but not as far as I’d like; I’m still not 100% done with the first step, and I’m about halfway through the second step, at a point where I need a complete business plan before I invest any cash. Of course the third step is where all the fun is, so I’ve dabbled in it, but committed very little.

At the end of the last step I should have a calendar full of paid work before me, a plan for the next couple of years, and pretty big grin from being so darn successful. I think it’s pretty important to be able to visualize yourself in the future, too. It may be a silly mind trick, but it works for me. Every time I repeatedly visualize some future, I somehow get there. (I’m still waiting on the hover-car, though…).

Next time I’ll put some meat on these bones, and describe each step a bit more.