Creating Your Ideal Photography Business

Lesson 46 of 48

Sessions: Business Plan Part Three

 

Creating Your Ideal Photography Business

Lesson 46 of 48

Sessions: Business Plan Part Three

 

Lesson Info

Sessions: Business Plan Part Three

So here's where the math gets cool. We are moving onto part three, sessions. It's very cool. So we know how much money you need to make. You just wrote it down, you've committed to it, you've thrown it out to the universe. Now we're going to calculate what your gross sales have to be. We're working backwards, we're deciding how much you're gonna pay yourself first because you're the most important thing in your business. We're going to take that salary number that you wrote down, and you're going to divide it by a percentage. When you work with a percentage, you take away the percentage sign, and you make it a decimal point. 40% would be .40, just in case you don't know happy math. You're gonna take that salary, and you're going to divide it by the industry standard, which is .35. If you are a very efficient, economical business, you might be able to keep more than this. Actually in my business, I keep 70 cents of every dollar that we bring in because I watch every single penny and whe...

re it goes. I'm not saying that it can be more or less than that, I'm just saying this is a good place to start if you don't know what your actual percentage is. So take that salary, divide it by .35, and that's gonna tell you what your gross sales target is. And your gross sales target is how many dollars you need to bring in for clients for the whole entire year. If you need to do it by month, if that is easier for you to think about, that's fine, just take that final number and multiply it by 12, and that'll give you your gross sales for the year. Okay? If we want to have a $50,000 salary. And we divide, we're an efficient business, we divide by .4, that means that we have to have $125,000 of gross sales. See how the math works? Okay. This is how the industry is. This is a really important number. Once you know this number, it gives you power to walk into that sales room and say, "I've gotta have this to do this work." M'kay? Now, remember, you can adjust these numbers, you can spend less, or spend less time, m'kay? That's how you change the numbers in a business. Spend less money, spend less time. How are we feeling about this gross sales? I see a lot of concerned faces, and that's normal. That's how it is. But it's important to know how all of this works. Math works the same way every single time. It's amazing like that. So now you know what your targets are. Alright. This is something really important to keep in mind. This is kind of a general rule of thumb. If you're thinking about your growth in 2017, 10 to 15% growth every year is a great target. You wanna be sure that you're always growing a little bit. 25% growth is ambitious, and more than 25% growth is really hard. If the number that you just wrote down for your gross sales makes you choke a little bit, that's okay. That just means that you may not be able to pay yourself as much as you wrote down. M'kay? And as you're growing a business, you may not be able to pay yourself what you want to at first, it may some time to build that income. But you need to know what the consequences are of not hitting that gross sales and make sure that your time investment is worthwhile to you. You do put blood sweat and tears into building a business, and just go into it knowing that you might not make your ideal salary right off the bat. That doesn't mean you won't, it just means it may take a little bit more time. Okay. So now, here's something that I've always done, because I'm totally a numbers nerd. I actually write two business plans a year. I fill out two of these sheets every single year, and I write down what I have to have to live. And that is my, I'm gonna be calling every phone number I know until it happens list, my set of numbers. And then I have the I'm gonna go eat steak three times a week list. (laughing) And I never really hit either one of them, I always fall somewhere in the middle between the two. I have my best case scenario and my worst case scenario. And I always fall somewhere in the middle. If you are feeling spunky, and you wanna get out there and play with the numbers a little bit, see what it is, adjust those salaries, and see what you have for the minimum gross sales that you need, based on the minimum salary you need versus the ideal salary that you need, and how that changes the gross. Go for it, it's a great thing to play around with and see how it changes your work load. Then you can start to determine how much you need from each client versus how much you want from each client. And then how much do you think your clients will be comfortable spending. I think a lot of us have had a pretty radical shift in what we expect from our clients, and what might be possible to get from our clients throughout the course of this class, and you might see a pathway to something that you thought was unachievable earlier. And so as you practice with this, and as you get better with this, you'll see that that pathway will expand, and it'll grow, and you'll see more opportunities and more ways to change things. Remember when I told you in the pricing class, in the sales class, my price list was designed so that I didn't have anything less than about a $1,500 sale. That's how much I need from each client. Does that mean I'm gonna stop there? Absolutely not. When we went to the sales session, I also talked about how my goal was to actually sell a group of canvases that start at a couple thousand dollars. That's my goal. And then I'm gonna add on an album. And then I'm gonna add on digital files. So the actual total average that I get from my clients is not $1,500, it's much more than that because I have a way for my clients to invest more. So the difference between these two scenarios, how much do you need from each client, and how much do you want from each client, they can have very different answers. Then it comes down to how much do you think your clients will be comfortable spending. And this is where I have a mild salsa item for you. Finally, right? (laughing) This isn't urgent, but this is a great exercise. I want you to go to a crafts department store. You know, where they sell things that you can make at home. Yarn and materials and sometimes they have custom framing, something like that. And I want you to go and see the art that they sell there. It's made in China by the millions. I want you to look at the prices of that. You might be surprised that a 30 by 40 framed piece of art made in China by the millions is three or $400. Now think of that compared to a custom work of art that you've made of their family. It's worth exponentially more. How much do you think your clients will be comfortable spending? Go see what's out there, see what they're buying, and how much it costs. Then go to an art gallery, a fine art gallery, with custom art, one of a kind pieces. Compare it to those prices. Not only are you creating custom art, you are creating custom art of their families, personal art, specifically for them, a commissioned piece. Do your homework on that, it'll be interesting. Did you know that some of those big box portrait studios, when you walk by the mall, they have five, six, seven, $800 sales averages for a 15 minute session? Oh, I got your attention huh? Yeah, go through a process. Spend $9.99 on a portrait session and go through that whole sales process, you will learn so much. So do your homework on how much you think your clients will be comfortable spending. And then evaluate if you have the clients that you need. Do you have your ideal clients right now? If they're your friends or your family, you probably don't. So push those to the side and go after clients that really value what you do and are willing to pay for it. Okay, moving on. Be sure you know what your clients want. Have samples, we haven't really talked about this a whole lot. Do you have samples of what you wanna sell? This is key, remember when we talked about the whole process of people being able to envision what you can create in the pre-design. Whenever you talk about investment upfront in your business and what you should invest in, a few key beautiful samples are really important. People need to see the quality. They need to see the craftsmanship before they're willing to invest in something that's a sizeable investment. M'kay, so when you're starting a business, make sure that you invest in high quality samples. Not too many of them at first, but a few select ones. And then of course, make sure your selling strategy supports what you wanna sell, and your price list. Alright, so here we are. How much do you need from each client? We're gonna start filling in part three. So we're gonna start it on product line. You already wrote down your salary, you already calculated your gross sales. Now we're on part three on the second page, and now we're gonna write down these product lines. And we're gonna take a really good guess at how many sessions you can do for each product line. Start at the top with your favorite kind of session, the number one thing that you wanna do. And write down how many sessions you think you can accomplish in a year. If it's weddings, just starting out, a wedding every other week would be a good start. Depending on the kind of service that you wanna provide. If you wanna start out with portraits, if you're brand new to this, a couple of portrait sessions a week would be a reasonable work load to get started and learn about it. As you get more experience, then you can add to that. But cut yourself some slack as you're learning. Okay, so write down your product line in the first column. Then write down the number of sessions that you think that you can take on this year. And then you're going to guess if you don't know, or if you do know, write down your average sale. This is part three. Product line, how many sessions you think you can do. We talked about your target average sale, so if you don't know this, we can go back to the safe numbers that we calculated earlier. For a portrait session using the safe per hour figure, knowing that an efficient photographer spends eight hours on that session, that is $ times eight hours equals an $800 session fee. How many sessions you can do times $ will tell you how many dollars you can generate. With weddings, we said that the safe number for weddings, $100 per hour figure times 40 hours of work equals $4,000 for a safe wedding figure. How many weddings can you do this year? The number of sessions times that $4,000 safe number equals how many dollars you can bring in to your business doing weddings, m'kay. Then the last part of it is you add up the total dollars that you can bring per product line and come up with a number down here. Now here's where you have to play around with the numbers a little bit. If the number that you add up down here, this is your gross sales, m'kay, the gross sales that your business can bring in if you do this number of sessions at this average sale amount. If this total gross sales is way off from the number that you calculated using your ideal salary, you're gonna have to massage the numbers a little bit. That doesn't mean change the laws of math. That just means you're either gonna have to do more sessions, or you're gonna have to make more money from each session. Math always works the same way. If your target sales or your total sales doesn't align with what you need to pay yourself, you're gonna have to either do more sessions, or make more money at each session, that's the way it works. Okay, so remember in business basics, we started out with where the money comes from. That's the part that you just calculated for your business. It always adds up, m'kay. Then you use the stuff that we talked about in the marketing segment to get those clients and bring them in the door, and then we use the strategies on your pricing and your sales to hit the average sale that you need to, and then you get to pay yourself what you need. It's super cool. Right? Play around with these numbers, change things, experiment, come up with a couple of different ideas about how you're gonna make this work. I promise you that just like everything that we've done so far, remember when we first started talking about pricing, and when we first started talking about the sales session, and you were so concerned about, oh my gosh, how am I ever gonna pull this together? This is exactly the same thing. You just have to play around with it, experiment with it, see how it works for you, and then charge, and I promise it will work. (laughing)

Class Description

"If you're struggling to figure out the business process of photography, this class is one of the clearest and most concise I've ever seen. If you're experienced but the business side and pricing are eluding you, you will find clarity here. I own at least twenty CreativeLive courses and hands down, this one explains pricing and strategy better than any others I've purchased or watched live." - Julie, CreativeLive Student 
 
Join Kathy Holcombe as she shares techniques and strategies to develop the photography business you desire. Whether you’re making the leap from part-time to full-time or starting your very first business, the amount of work can be overwhelming. From what products to offer, how much to charge, how to pay yourself or the legal considerations - start ups often sink before clients are even booked. Kathy will show you the ways to grow your business from the start. This class will cover: 

  • Defining what product you are selling and how much you should charge to make a living 
  • Photography business basics and how to track your income compared to other businesses 
  • How to write and create your business plan 
Kathy Holcombe and her husband Peter built one of the top wedding portrait studios in Colorado, then jumped in an RV with the entire family and began traveling the country full-time, and added a successful commercial division. Together they have built multiple successful businesses and have honed in on the important factors that every photographer should consider when building a business. 

Reviews

Lindsay
 

I started my business a year ago with little formal technical photography education. It's hard to admit but I've been winging it, figuring out each small task that goes with photographing a session, editing one, and working with clients as I go. I may be doing things backwards, but now that I feel like I'm more comfortable in those small, specific parts of business, I need to figure out how to make this business sustainable and profitable. Kathy's class felt perfect for this time in my business to take a step back and look at the bigger picture of what I want to focus on and where I want to go (and how much I want to pay myself!). She uses realistic, specific numbers: something that's SO helpful and I feel like I rarely see in the photography community. And she breaks everything down in an organized and easy to understand way. The classes were easy to follow along with and Kathy's positivity and patient manner is inspiring and motivating. The fact that she used to be a school teacher is clear. Thank you so much Kathy (and the rest of the Holcombes)!

Jenny Farrell
 

I am so glad I was able to attend this course in person and receive all the wonderful and practical information Kathy shared with us. I also really enjoyed the connections with other audience members and side conversations with Creative Live peeps as well as the Holcombe family. What an inspiration this family is--lots of practical info, but also a great pep talk to not sell yourself short and get out there and do what you love, but use sound business practice while doing it. Thanks so much for these incredible two days.

Vanessa
 

Fantastic course! Very helpful instruction and how-to guide for anyone considering starting up a photography business. Kathy was an excellent instructor, with a wealth of knowledge and experience. I gained a good understanding of the practical everyday aspects of running this kind of business, and how to create my own vision.