Tracking Product Lines In Your Business
So now this section is what do you need to track in your business? Remember at the beginning I told you wouldn't it be cool if you could look at some numbers and know if you were able to hire an employee. Or to know if you were able to move into a retail location or if you should keep working out of a coffee shop, or out of you home or something like that. This is where you get to find those answers. And so we're gonna talk about where the money comes from in your business and what that information can tell you so that you can make good decisions. And then of course where does the money go? Business is all about money, right? So those are the only two aspects. So when we talk about where the money comes from we're really talking about three things. We're talking about products and product lines. We're talking about the number of sessions or the session counts that we do. And we're talking about the sales average. And so if you have that information about where the money comes from in y...
our business, it will help guide you as you make marketing decision, as you make sales strategy decisions, it's all really, really important. So let's start with product lines. That's the foundation of any business, is what you sell. So product lines, we've been talking about products all along and building our price list based on products. But now we're going to start putting these things into categories so that we can see patterns in our business. So we're gonna shift from products to product lines. When we group products into categories or departments, you guys have heard of departments in business. It serves as a basis for extrapolating information about your business. So you can put things into groups and see patterns. And how you group things is going to be unique to your business but I can give you some ideas that'll help you get started and teach you about the kind of information you wanna know. So in general product lines are grouped according to three things for photography. It can be based on the cost of the products that you're selling. So you could have like a low end division of your business, and a high end division of your business based on the cost of the products that you're creating. You could have product lines based on special photograph requirements, photographic requirements. So what that means is if you do a location session versus a studio session, they're very, very different in how you work, who you're marketing to, and the types of products that you're creating. So you might wanna group things based on that. Or doing a wedding versus a portrait session. It's very, very different in the photographic requirements. Or the other way that you can group things is based on the people that you're marketing to. So when I think about all the different types of business that we've done over the years. Whenever I am marketing to a high school senior everything about that business is gonna be very different than how I am marketing to a bride. They don't wanna, brides don't wanna see high school seniors. High school seniors don't wanna see brides. So the way that I'm interacting with those two clients are very, very different so they would be separate product lines, okay? So, sometimes even beyond a product line you can break things down in just smaller groups called product lines categories. And those give you even more information about the business that you're running. So a great example of that it can tell you where your sales are coming from. So if you think about a high school senior business. You're going to be working at different schools, right? You'll have students coming from all over the place. So if you have high school seniors as one of your product lines, you might wanna have product line categories for each one of the schools. You might wanna have North High School and South High School and East High School, and what that can tell you is you can start to look at the sales averages for each school and say oh, kids at North High School spend on average $400 more than students from South High School. So, as a business owner I'm going to invest more marketing dollars in North High School marketing than I am in South High School marketing. That makes it a lot easier so whenever the football team calls and says hey do you wanna place an add on our calendar, you can choose, you only have so many dollars you can invest. You can choose which school will have the biggest impact on your business, okay? It can also, product line categories can establish groups to whom you are marketing. So, an example of this would be if you are marketing to families, family portraits and you have a destination portrait session that you're offering. And so you would want to target families that love to travel. And then you can say hey, I have this great opportunity. We are going to go to Death Valley and we're gonna do family portrait sessions in March, and we would love for you to go. So it's a very unique niche, it's a unique group, and by breaking that out into a separate category I can look and see how my sales are from those sessions to see if they're even worth doing. It would take a lot of time to go there and do that and so I need to be able to look at my numbers and see if the payoff is there, okay? So, the big group is the product line. The subgroups are the product line categories, and within that are all the products. That's the digital file, and the eight by 10, and the album and the wall art and all those things that you are creating, the things that you hand to your clients. So all of that has power in how you run your business. So let's take a look at an example. So sometimes it's easier to step outside of photography 'cause it's so close to us so let's look at a department store. So you go to the shoe department, that's the product line, and you see the product line categories. There are dress shoes, there are sneakers, there are sandals, those are the categories. And then you have the pairs of shoes that are being sold so Nike size five, Uggs size seven, those are the products that they're selling. So think about how that might apply to your business. What are your product lines? What are the obvious ones? So, some that come to mind, weddings would be a product line in to itself. Let's look at 'em Portraits would be another division. Within those things, and seniors would be another division. Babies might be another division. Commercial work, editorial, all kinds of things. Head shots. Anything that's like a big chunk of what you do and it's unique, it's different from the other chunks of what you do. Those are your product lines. So right now jot down a couple of things. What are your product lines? What are your big product lines? What are they? Hopefully you can write that down in three things, or not too many more than that. But then the interesting thing and where you get really good data for your business is in this product line categories. That's what you see here in red. And so for weddings you might have local weddings and you might have destination weddings, two very different groups, right? You would market to 'em differently, you would have different photographic requirements for that. So you would wanna break those down into two categories. And when Peter and I first started doing weddings we dreamed about doing destination weddings. We were like okay we're gonna go to Mexico, we're gonna go to Hawaii, we're gonna go to Europe, we're going all over the place. We're like okay, when we have made it, we are gonna be doing destination weddings, okay? So that was like a big check on the bucket list. And so we started doing weddings and we started saying we'll travel worldwide and then we got our first destination wedding. And I was like yes, we've made it! And we made exactly $500 more on a destination wedding than we did on a local wedding and it took us five days. And I was like ah, okay. But if I hadn't broken that down into destination weddings and local weddings and looked at my sales averages I woulda been like woo hoo I went to Mexico for free. But in actuality I worked for five days for that trip to Mexico whereas I coulda just done, I lived in Colorado and that's where we built our business and there are people that come to Colorado and do destination weddings there all the time, so if I know that destination weddings make on average $ more than a local wedding and that there are destination weddings coming to my backyard, who do you think I'm targeting? People that are coming to my neighborhood for destination weddings, I make the extra $500 and then I go on vacation to Mexico without having to work, right (laughing)? It makes total sense, but if I hadn't broken things down into these categories and really watched my numbers and said oh, that wasn't as good as I thought it was, then we wouldn't have known that. And another thing that we learned about that was this whole engagement thing, that's a whole nother subcategory within weddings because I treat it like a portrait sale session and I wanna know how my engagement portrait sales average compares to my portrait sales average, compares to my wedding averages. And what we found over the years that our engagement sessions were almost equaling in dollar value the cost of the wedding. So like if I could just shoot engagements, that would be the best thing ever. I haven't figured out how to just do that so if anybody knows, let me know. But we spend a lot of time and energy on engagement sessions because they're very profitable for us and we love doing 'em. So this gives you power in your business to pursue what's profitable and to pursue what you love doing and make sure that you're spending time doing the work that you wanna do. So for portraits it may be that you treat families differently then you treat shooting just a child session. So if you look at the sales averages at least in our business when we can photograph a family versus just a single child we would have triple the sales average for the family. So even if somebody came to us and said oh I just need portraits of my child I would say okay but we're gonna do a couple of the whole family so make sure everybody's dressed and ready to go, because those are the images that I sell. And I know that because I pay attention to my sales averages, okay? Same thing with seniors and I told you about the different high schools and how you wanna track those. So, in general this is kinda how our business works now. And we've been through just about every iteration of business. We have a lot of commercial partnerships. We do a lot of work where we are creating lifestyle images for big corporations. And we do a handful of portrait sessions every year because we love them and we do them all across the country. We do a lot of lifestyle assignments out in the field. We do just a handful of weddings. You guys will learn a little bit more in the next segment about how my family has taken this crazy leap and moved my family business into an RV. And so that's really limited the number of weddings that we can do 'cause we're rarely in one place very long. And then we do a lot of magazine work, so that's kinda the breakdown of where we spend our time in our business and how we work. And at different points we've had you know 75% of our business is weddings, or 75% was portraits. So we've had a lot of different experiences as we've grown as a business. So right now I want you to not put too much thought into it, write down the product line that you are most excited to work on. This is a critical decision but I don't want you to put too much thought in it 'cause this is what we're gonna work on for the rest of the class, hopefully the rest of the year and into 2017. So what are you really excited to photograph? What are you really excited to work on? Is it weddings, portraits, magazines, fine art, pets, what is that? Write it down and we're gonna stick with that decision at least through the end of the workshop. And then write down any product line categories. Hm I wonder what I could learn about my business if I knew more about this high school or families versus children or whatever it is in your business. Write down those product line categories and then we're gonna come back around to these products. What are you gonna offer to these clients? So we'll keep coming back to that and keep refining that.