Day 12 Bonus: "Projections"
Today, we're gonna work through pricing and projections with carly, and we're gonna go through and really think about first what we want to be making in the business, and then how we're going to get there and the very, very first thing that I want you to do is think about what you want to profit in two thousand fourteen. So, that's, first question I'm gonna ask you, what do you think, what's your magic number? What do you think would be worth doing? What we dio everything that we do for two thousand thirteen when you want that profit to be? My goal is thirty thousand dollars, okay? And and that's great. So we want a thirty thousand dollars profit for the year and, well, that thirty thousand dollars profit. Do you feel like it's going to get you to pulling out of your other job? I think that thirty thousands of starting point uh, you know, I feel like we can go up from here next year if I feel like I'm doing well with that. But I think that's a good goal for this year, so all right, gra...
b your number. What is it that you want to shoot for what's that goal for next year that you want for it? Your owner's compensation and net profit that's going to be what you make what you have to show for yourself at the end of the year so we're gonna work with thirty thousand dollars whatever your number is, if you're a retail based studio, I want you to take that number and multiply it times three if you're a homebase studio, I want you to take that number and multiply it times two point five and carly does have a retail space, but we're going to go to point five for her as well because her expenses there are very minimal. So think about how to get to your big number that gross and whether you need to be multiplying times three times two point five and the way to think that through is you know, even with your home studio, you've got expenses involved and so way do need teo think about the big number and what all we're going to pull out of that we're gonna pull out all of our general expenses, your general expenses there gonna be anything that is going on your business, anything that you have to pay for monthly that you would be paying for whether you photograph a client or not? And then your cost the sale is going to be anything that goes into your final product and so that's anything that it takes to create the product that you're delivering that's going to cost a sale so we've got to really think about those two things and that's where that either two point five times three number is going to come from so for carly we're going to go to point five which gets us to our gross of seventy five thousand is that sounds scary a little bit okay and and that's all right, but what the projections work she does because it allows us to really plan out for the year we need to think about how many sessions you physically can do want to dio and in a month and then we'll decide from there how much each one of those sessions needs the average to get you to your goal put down your number what that grosses and then we're going to work backwards from there carly already has thirteen weddings booked for next year, so I'm gonna put those on the projection calendar first we're gonna work through and do you know which months you've got weddings and how much they're booked for? Yeah um we could start here in march I have ten fifty in april have thirteen fifty may I have thirteen, fifty times three, three weddings in may yet you really want to be doing one right? I don't know all right, well, I stick to it getting a better june I have a ten fifteen to thirteen fifty all right so that brings us to a total of thirteen weddings and when we add all that together you've got sixteen thousand nine hundred fifty dollars in revenue all right then we're going back out that sixteen thousand nine hundred fifty from that seventy five thousand that's going to give us a total of fifty eight thousand and fifty dollars we need to shoot for yeah he was more doable doesn't do it all right? The next thing that we want to do is you want to think through each month of the year and how many sessions we're going to do in each one of our different product lines so when your projections work she think about the product lines that you're photographing whether it's seniors family's weddings you know whatever it is we're gonna work through each one of these things and decide really how many sessions you can do want to dio each and every month okay all right. So j anywhere what does that look like for you a lot of times that's the slower month for photographers yeah, it really hasn't been that much slower for me um my waiting list is pretty long right now I have to keep telling people two thousand thirteen's booked up so um and I really like to do some fun snow sessions and I usually have a baby's okay so babies and snow and yeah unfortunately we always have snow and I I want to back up its carly just mentioned that she is super busy right now and she's telling people no and I have experiences with her because when I'm e mailing back and forth I get back this ugly email that says sorry and booked and talk to you later I mean it's just really abrupt and negative and you know sorry, but it just is what it is and you know in one of the things that I want to encourage you you know if if you are book salad and turning people away there is a reason for that and usually the reason is is you're way too cheap people you know they're going to knock down your doors when it's a super cheap price and carly has experiences she is super busy every single month she has so many clients she is turning people down and which is a great thing for that january february time because you can start looking people in but one of things that I want to throw out there is especially when it comes time to raising your prices if you were booked solid and it's time to raise your prices use that opportunity to be able to market too your past clients if they're wanting to get in with you offer up some premium sessions available you know you've got thirteen weddings booked for next year and you don't want to do any more than that you know but if somebody was gonna pay you you know forty eight hundred dollars instead of ten fifty you might consider it right yes you know so think about that and what your happy place might be and put making available so you know you're giving those clients those potential clients yes answer something positive but also it's going to be right for your business and you know probably even your family by you know, say hey, I could go do this and I could make x amount on this weekend you know so think about that with your family sessions you know what kind of that magic number and we'll work through that because we're gonna know exactly what you need to be averaging to reach those goals for next year and then when we do that you could put that out there that you know all of our regular sessions are booked for this year but we do have special sessions that you know started x amount and just let people kind of know what that investment isn't for you if you're making that on a session you might be willing to open up another one or two yeah all right all right so let's go back to thinking about january and how many sessions that you want to be doing in january my goal is to be at eight sessions for the month I think I keep one for a baby plan because I have lots of babies that come in and I think probably throughout the whole year I'll just do one a month but uh one of those a month I'll go ahead and fill that animal do one each month all right and then kids for january for kids I'd say four sessions in a family three and of course they aren't doing any seniors in uh january and that might be our next easiest thing teo fill out is you know how many seniors you think you see yourself doing next year and we know would you say that your schedules about the same as mine I'm shooting like june teo september so yeah okay all right, so let's fill in those seniors how many do you think your photograph next year? My goals probably six seniors it's a couple all right and so let's figure out would you say like two in june two in july and then maybe one in each august and september. All right, so we've got those seniors booked and then what about what do you do any special events or any time when you see a month being busier than another? My big months for families are like june and october, june and I've got like some flower fields and october everyone on pictures with, you know, for christmas with the falling leaves so okay doesn't probably big months for families and then how many of those you think that you would do for I think I would probably push all families in those two months into eight sessions for both you guys so a family sessions in june and then it was october yeah okay great and then the rest of the year what do you see for families I think we could kind of keep those of samos january and do three four and one there for baby playing children and okay so three families four kids and one on the baby plan yeah all right all right then then are there any months that you think you know you've got three weddings booked in may two in june two in july I mean do you want it shoot any less processions during those months I think probably definitely in the month that I have three that would be a good goal to maybe cut back a little bit back on those okay so if we cut back in may uh two family three kids and a baby plan that's gonna put you at six sessions instead of eight or nine and then do you want to build those into april? We're going to put the extras let's put those in april okay so I'm gonna go five families five kids and a baby in april and then alright let's fill in here for the rest of this month we've got the eight families in october um do you see yourself maybe doing a couple less in that a senior months now, my goal is to do the seniors, maybe during the week because it's easier for them and because I have afternoons off from my other job, maybe I could, you know, put them in right after school, so I think I can. Those will be ok. Ok, so we're gonna go three across here and four across here. Is that looking pretty good? Yeah, they're okay. Let's. Go ahead and add all these together. We want to know how many sessions were doing in each category and then what our total is. I'm gonna grab my calculator so I don't have toe add these all by myself. We've got twelve baby sessions here, so our total sessions that you're going to do for the year is one hundred and five sessions. That sound doable? Yeah. Do you know how many you did last year? Last year was like two hundred and fifty. So so yes, you can you, theo, and the great thing is you did two hundred fifty sessions last year and your income was pretty small. Yes, and you're going to be able to do half the work less than half the work, and you're going to be making profiting so much more so that's one of the real beauties of getting us on papers would actually be able to see that so we're going to take that one hundred five sessions we're going to go we're gonna start with our, uh, fifty eight thousand fifty dollars is what we need to get teo fifty and they were gonna divide that by your number of sessions hundred five and that gets us at five hundred fifty two dollars average by fifty to eighty six um, but if we look at that, just kind of is around number, I'm gonna say five hundred sixty, is there going to be our average goal? And I'm excited about that, because when we talked before, we kind of talked about six hundred dollars, being here, you know, excited point, but I really, really feel like when you see, when we put your new pricing together, you're going to see how easy it's gonna be to get there. I'm just leading your client right through and five hundred sixty dollars is not a lot. I mean, honestly, if somebody can come in and spend a couple hundred dollars, I can spend six hundred dollars, yeah, so and, you know, when you are going to be having to reach out to a little bit more of a new target, so that kind of brings up my question about photographing friends and family and like people have been really loyal clients when can I maybe kind of show them the pricing they've been used? Tio that's a good question way didn't build anything on here for friends and family day, and I'm really gonna recommend that you do that, and they have a couple days on the calendar for friends and family, and I'm gonna recommend it to you guys as well that you are gonna have family members and very close friends that are gonna want that old pricing that you've been giving them, and you're probably gonna have a few people that you want to do that for us. Well, no, I know carly is pretty motivated to reach these new averages, but there are still those people who, you know, brothers and sisters and parents and close, close best friends that are gonna want that, you know, whatever you've been doing in the past, and so we're going toe, I'm gonna encourage you to put two friends of family days on the calendar, and then, you know, what you do from there is when somebody does call in, you know, your sister calls and says, you know, hey, when can we get little johnny's pictures taken, he's turning three? You can let them know that I've got a date on the calendar, and this month on a date on the calendar in this month which of those would be better you're going to see pricing a little bit more like you're used to seeing otherwise I'd be happy to schedule one of my regular sessions for you but I really have a plan for those sessions and how those need to g o and so if you want to do one of those that's great but it will be my new products my new pricing know otherwise I can fit into your friends and family day makes sense yeah all right so what what do you think what what would be two months or or how often do you think that you need to do it do you need to do it once a month? Do you need to do it once a year what's here what's your thought I think that I should do it twice a year so I can get the different seasons and I think probably may and thie end of september so we can really get the leaves changing okay, so I'm gonna actually down here in this other category I'm just gonna put friends and family and that how many people do you see taking advantage of that there's probably eight people so I'm trying to put foreign may and foreign september all right so let's go for there and for there we're not going teo add this into your totals because that's going to totally mess up your average andi were also you know we're not gonna figure on those, but what I do want you to do is make sure that you get those times scheduled in your calendar and so don't just open it made of them say it is may seventeenth or whatever the day is that you pick that's the day that's going to be available for them and it's not if it's not then then it'll have to be september whatever and it's not that you're never going to make allowances, somebody has a baby or you know, something happens you're you're probably going to do that, but just always remember that when those things come up, make sure that your scheduling it in for yourself so that you're not beating up the rest of your schedule. Now you should have a couple of numbers on paper, you should have the profit that you want to make. You should have multiplied that either by two point five or bar three and gotten your gross that you need to bring in. Then you should have gone through your calendar and decided how many sessions you actually want to book for yourself each month and then take those sessions and you're gross number divide those sessions into it, and then you should have a goal for what each one of those sessions should be and when you when you stop and narrow this down, you're going teo maybe have a family sessions that will average, you know, eight hundred dollars and kids sessions at average four hundred dollars, but then when you bring it into the middle it's going to still get you that total session goal average, so think about that as well as you're working through and that not everyone your product lines need average the same amount, you know, for me, I've got special events that we do with the real kids are portrait parties and those air going toe average something different, and I've got a different goal for those then for my family portrait's in the studio, but still, when I take all and everything together and average that out, I know what my my average needs to be overall, everything that I'm doing in the studio so think about those and as we go through, things were gonna plan carly's pricing now, and I want you to do this also we talked about starting from the bare rock bottom, your costs based pricing that's going to be the rock bottom that you need to be willing to work for, and so I'm gonna work thru with carly working through cost based pricing because it is going to be a big jump for her from where she is now, but so we're gonna kind of put those rock bottom prices on paper so that we can look at him and say, okay, do I you know, one around a little up a little down, but we want to shoot remember for that twenty five percent cost a sale and then you're going to work as you move through and you raise your pricing and things changed for you, you're going to be able to lower that cost of sail as time goes on. But that's, what we're going to really be shooting for is that twenty five percent cost of sale and to get that we're going to take all of the costs involved in creating our products, so we'll start with an eight by ten and work through everything that it takes to build that eight by ten from printing, mounting, finishing anything, anything you're going to do tow texture, anything you're gonna add, we'll add that will add up our packaging costs. We're gonna put a time value in there, which you haven't been doing, and then, uh, and then figure out that cost based pricing to start with. And then I also just want to talk to you a little bit about what feels good to you, as faras may be looking at all of our pricing, packaging or build your own collection, what it, what do you think is gonna be the most comfortable for you to present to you a client I think I'd like to try a build your own about your good I love that we're gonna talk about your wedding pricing first and that is something that I kind of feel like it's going to be the easiest thing to get out of the way for you you've already pretty much got your your books for next year, so think about, you know, whats that magic number that you would be willing to take on another wedding for, um, my magic number next year for wedding would probably be like thirty, five hundred just say that you're all right. Now, what happens if you have five people take you up on that? Well, then, like out? Well, if one person takes it upon him, I got seven thousand s, so we'll say thirty five hundred is going to be that magic number remember that when you're building packages, that base package that first price is going to be something that is just going to get people to get in front of you. You want to be able to sit down with people and go through the rest your packages and so it's okay to say, you know, carly's based package now starts at ten fifty, right, and then tell me what the other levels are it's ten fifty, thirteen, fifty and sixteen and sixteen fifty and you said that pretty much everybody is booking the thirteen fifty package and so that obviously is not a number that's hard for you to say, okay, is what about sixteen hundred? You feel like that's too much for your base price to get people excited about talking. Teo, I feel I kind of feel like I should start a little bit lower me from my base price, but I could see thirteen fifty being my base price and then really stepping it up from there. All right, and that's great. And I love hearing that. And right now in your base collection, they've got lives being given to them, and so I want to see you pull a lot of that value out and build it into the collections where you want them to buy, because that's kind of what we want to do with packages, way want to reward them for where we want them to spend. And so as your building your packages, you know, let's, let's, take that bass, that bottom package up to thirteen fifty that's going to allow you on the phone to say I've packages starting at thirteen fifty and go up from there based on your needs, and you want to be able to sit down with them and have that connotation go through albums and your final product and lead them into that package where you want them to buy and we're going to call that package thirty, five hundred okay, so and that I know that scary we're going we're going to build a package in between that is let's say, if you've got a thirteen fifty, we're gonna have a twenty two hundred dollar package and what's, what that's going to allow you to do is right now you are booking a lot of your your middle package and that's going to step that up quite a bit if you've got people there, but at thirteen fifty he wanted, you know, narrow that down to, like four hours and not a product. In the end, maybe if you feel like you've got to put something in, make it thirty digital files or fifty digital files, not your whole wedding on a dvd, but, you know, make that be something that there's not that value there that gets them excited about spending there all it is is a lead in to work with you, and then at twenty, twenty, two hundred you can build in, you know, a few more digital files and maybe a product I would include, like maybe an engagement session and and something small, but build your riel product that album in and that you know everything that you want all the digital files in your album into that thirty five hundred dollars price point because that's really gonna you know, push people to go ahead and invest in where all that value is and that could be, you know, eight hours of coverage plus an engagement session you're their digital files were gonna be included and then an album and then the other thing that I want you to do is I want you to have kind of what we call a whopper package that is there that's going to be over and above that thirty five hundred we threw the number of forty, eight hundred out earlier and that that's a little scary to you, but s so what what do you think about that about putting a forty eight hundred dollars package on the menu? I think it's something for people to look at and if they somebody booked it, wow, great that'd be awesome, but well, I'm basically the philosophy around doing that is that you know, if you've got it on your menu, your client's believe that somebody does purchase that and that you're worth that, you know? And so it makes coming down to that thirty five hundred dollars level or that twenty two hundred dollar level a lot more breathe herbal for them and so we want to have that whopper package there and I really really would encourage you that if someone ever books that it needs to grow up, you know that's really there is just something that says, you know, forty hundred dollars is she kidding? And then you weren't down into the next package and it's tells a little better yeah alright, so and with your forty eight hundred dollars package then you might even include a parent album along with that you may include a you know, a cd slide show that there's gonna be set to music with all their images that you could do from an emoto are, you know, just build in some other cool things in there that really don't cost you a lot of money but have a lot of value to the client. Another thing that you could do in there that is something that it doesn't cost a lot of money, but it has so much value to the client and that has to include a proof package with your digital files. And so you do a nice image box with all their proofs inside and have one there to show them that this is what you get with that forty eight hundred dollar package along with your album or your parent album and we'll have to work through your cost on all those products to make sure that these levels makes sense but you know, just thinking about the philosophy of that does does that feel yeah, did with you? I like it. All right, good. The other thing is, when you're presenting your your pricing to your client, you do always want to start with that whopper package is going to start with the biggest number first, so that your, you know you're saying to them and you have already told him we've got packages starting at so they know that when they come in and they sit down, you're gonna present that forty, eight hundred our collection first, so they can already have a little bit of I don't know about this, you know? And then when you, you know, go down into that thirty, five hundred dollar collection, you actually used the words, you know, this is the package that has in those value in it here you're going to get a b, c, d e and walk through it with them, and then, you know, that number starts feeling a little better and you can go down to the twenty, two hundred and it's still, it just doesn't look like as much fun as much value as you've already told them. You know, this is the best value. This is what most people dio and work through, everything they get in that package. And the last thing that we walked through a cost based pricing analysis and so I'm not going to go through that with you guys with carly will do that on our own but make sure that again that is thie rock bottom you're willing to work for we've gotta multiply all of those components times for to get to that rock bottom price I do really want you to also put a time value in there and carlene are gonna work through that as well that you know if there is something happened and she needs to send out that section for retouching or for editing we've got at least building that even rock bottom number which is going to be between three dollars and fifty cents and five dollars if you're sending it out and you know I even love to see you put five dollars in there in case there's a glass clear removal or braces removal or something like that you're going to be charged a little bit more for it and so if we add that in there as a minimum you know we can get a nice round price I do want you to think about that and moving up as you go along think about what you want to be paid per hour and build that into your print pricing think about which method of pricing works best for you in your own mind and there is no right or wrong just how it's going to be easiest for you to present the ideas and the suggestions to your client, carly has decided to do a build your own collection, which I'm excited about. I think that is really helpful thing to do when you are starting something new, you've got new products that you want to introduce your clients because you really can just walk them through the steps of your menu and show them the value that they're going to get by walking through those steps. Now that you've got your base prices built, if you're going to dio packages, then you're gonna want to make sure that you actually add on that percentage that you're giving as a discount to those base prices, and what that means is if I've got a package that I put it together, and I'm discounting my products about twenty percent, I really the client doesn't know this, but I really want to go back to those base prices that I wrote down with that twenty five percent cost of sale and add twenty percent to that, and so they're seeing the ala carte pricing of twenty percent over your base, and then you're able to give them that discount when they purchase your package, and so we're gonna think that same way, when we're doing the build your own and that's what feels good to you and I love the build your own system because it really does allow you to walk your clients through step by step, what it is that you want them to purchase, and then you're rewarding them for buying what you want them to purchase. And so I love that method, and we'll go ahead and put this together for you, carly, and think through really what it is you want your clients to buy, and you've said that the main goal is to have them buy for the wall, okay, so we're going to make that your step one okay, when they work through your bills, your own collection, what you're telling them is, and you can actually verbally say this to them, but instead of having pre design packages for you, I'm gonna let you build your own package so that you can get the same value as a package, but get exactly what you want and clients really love hearing that, you know, you're gonna let them get exactly what they wanted. Of course you're making those suggestions, and you're telling them what they want, but as they walk through their choosing, their sizes and frame ings and, you know, putting that together, and so they are getting what they want what's right for them. But you're also making sure that you're selling what you want to sell and so we're going to raise the prices on the ala carte menu so that there's even that much more value when they put it together and then take that twenty percent off and you know that's what we decided on that when they work through your steps were going to give them twenty percent off and that's that same value as a package and typically when we're building packages that's about the percentage that we're taking off is about twenty percent okay step one is gonna need to be the main thing that you want to sell and we know you want to sell wall groupings is there anything else that you want to put into that step one category yeah I think I'd like but image boxes and albums and that one okay and that's great and you will have you know clients here and there that are not going to be well portrait clients they are going to be an album client an image box client that's great so was let's put those there and they can choose one of those you know premium products signature products whatever you want to call us and so you know choose one of our signal signature products and then step two let's go ahead and think of how many digital files you wanted throw in there we know people want those usual files and so let's let's make that that that step two and um kind of what numbers do you see offering in quantity? Ten, twenty and thirty would be a good one okay, so let's go ten files twenty files thirty files and you've been doing all your digital files for what? Seventy five dollars or something like that very much and so okay good get a alright well and you know and so I am going to ask you to really kick this up but you know, remember that this is something that you want to get away from being known is that digital file photographer and so we'll let him purchase them here after they buy from step one and that's what we really want them to buy and we'll give him a discount if they do that and add that on. So, um what do you you know how where do you feel good at for ten miles I was kind of hoping for like fifty dollars a file so, um good. So that gives us a five hundred dollars, uh mark there and then um at twenty wanna go eight hundred that's getting them a discount already even before their their package discount and then at thirty we'll do nine hundred I think nine hundred this's a little step up it is and that's gonna be a huge value it's kind of like if they're willing to spend eight hundred for twenty, why not spend nine hundred for thirty you know and that just gives you that extra little bonus there another thing that I would really encourage you to do with your digital files is offer a set of proofs along with that because your proofs are going to be a huge huge value to your clients and really you know, let him get kicked up it's not something that you've been offering in the past and so it's a way to say no now we have these new digital collections they include a set of proofs and what that's going to do for you is it's also going to allow them to see what they should look like if they do print them? Yeah and but then again you've got that huge value to add in there and so let's add a set of four by six proofs with each one of those digital collections and then let's go let's make your step three and optional step that they can add on if they want to but they don't have to they can just do steps one into you're going to take that and you're gonna if they do go through both steps you're gonna give him twenty percent off their order which that's gonna be you know, building that value of the package there twenty percent off and then let's do an optional step three and, um let's put some gift print collections together and that will allow them your gift prints are always gonna be anything that's already been purchased and that's gonna be super easy for you to do because you're already offering packages of ten, twenty or thirty along with an image box or wall grouping so they're gonna have a lot of files to choose from, so we'll build your gift prince there and then is there anything else that you can think of that you want to be offering? I think I'd like to add on like, boutique items, you know, I could do like metal shapes or accordion books or something like that so that we can just have something specialized to me in there, okay? And so and you want to actually call the fatigue items? Yeah, ok like that. All right? And I love that you with your new space we're gonna be able to show some of those things off. Yeah, and you said medals according album and what else we could dio I also do like a lot of holiday cards and stuff, so maybe add the cards and okay, just remember than on all of these items, you're going to need to bump up your price twenty percent so that you can give them that twenty percent discount and still be at your cost of sale that you want all right, so and we can add to that as we go, but I think that's a really, really great place for you to start step one one of your premium products step to their digital files that they want we're also throwing all that value in there with the set of proofs and again that's not taking four by sixes or they cost you so little really what cost you is the time that's involved in and actually editing them re touching them and you've got that built into your your print pricing there and then we've got, uh the optional step three and four, which is give prints and boutique items. You happy with that? Yeah, I am teo and really, you know, we after building at your your cost a sale on everything you know, we've got six hundred twenty dollars on your image boxes and six hundred eighty on your albums as a start and that's already with step one, you're gonna be really close to hitting your target even after you take that twenty percent off. Yeah, we have spent three days now together going through planning for pricing, setting up your pricing and now today projections for your year and so hopefully over these three days you've come up with the method of pricing that feels good to you what you want to present to your clients and today, I hope that you wrote out your projections for the year and really have thought through what you need to be averaging on each one of the sessions that you're shooting, and then scheduling and making time for those sessions, as well as thinking about what the average sale needs to be from each of those. Thanks for coming along on these three days. I know nobody really loves pricing as much as I do. But I have really enjoyed this. And I do hope that you'll keep in touch with me and let me know how you're progressing through.