What Is The Feasibility Of A Product
What does this do for you? This will help you determine the feasibility of a product. It will help you determine if you can run a special in your business, and it can help you calculate your target sales average. Remember I told you that you're going to walk out of here with a goal every time you walk into the sales room. This is how you're going to figure out what that is. So, let's start with the feasibility of a product. Okay? Let's say that an album costs you $ and takes you two hours to make. Plus of course the eight hours for a portrait session. Your cost of goods for the album is $200. Okay? So you take that $200 and you multiply it by your markup factor. What is your markup factor that we said is safe for the industry? Four! So we take that, we multiply that by four which gives us $800, is the base of what we have to charge. Except there is that other thing, that labor. Right? What's our per hour figure? The safe one is a hundred, right? Okay, so. Let's keep going. For that tim...
e, you have to have you have to make sure that you-- Let me go back to that. Okay, so the time. Let's go back to that. Two hours of design time. Eight hours for the session. That's 10 hours of work, times your hundred dollar figure, what do we need to make for this? A thousand dollars. So, when we use cost of goods and we multiply by our markup factor, it says $800. But that's before we factored in our time, okay? So the real answer to that is that you have to at least charge a thousand dollars for that album. The way that you are looking at me and saying, "A thousand dollars for an album?" There's a way around it. You have to use a less expensive album, or you have to spend less time making it. That's the only answer. Less time, less money, or you have to charge a thousand dollars, or else you'll be out of business in three years. You will have worked for nothing. It's really important. Okay, let's look at it in a different way. All right, do you want to run a mini-session for $200 and include five digital files? So sometimes when we're marketing, we come up with these ideas and we're like, "Okay, we're gonna do a quick session, it's gonna be quick and dirty, they're gonna come in, get out, and I'm gonna include the digital files and this is a way I'm gonna build my client base." Right? It's a great special. Now, here's where you have to run it as a filter to see if it's a good idea for your business. So, if we know we're going to make $200 off of that session we can use the hourly rate backwards and say, "All right, I know I have to make $100 an hour for every hour of client work. I'm only gonna get $200 from this session. How much time can I spend on it?" How much time can I spend on it? Two hours. Right? And that's it, total. Shooting, selling, production, everything. So is that something you can actually do? Would that be something that would work in your business? Maybe if you showed up at a boutique and you said, "Okay I'm gonna schedule sessions every 15 minutes, I'm gonna spend 10 minutes shooting, I'm gonna spend 5 minutes selling, and I'm gonna email the products at the end." It's possible, right? If you do it right. That's where this per hour figure is really important. To say, "Okay, I cannot do any re-touching on any of those images, period." I can't do all of the things that I do for my normal sessions where I charge a lot because I won't make any money on it. I may as well go spend time with my family doing something else, right? It's really important. Okay, questions about the per hour figure? It's super powerful, it is the filter that says "Yes, it's a good idea. No, it's a bad idea."
All right, so this is coming from justme who said, "does this work the same if I'm going this as a side project?" So then-- this was in the chat room, and Marco said, "We do the same, wife and I operate together, we both have full-time jobs, so this is a retirement venture plan for us, and so should we be figuring out how much we want to make?"
How do you think about it if it's sort of a side project?
Yeah, well it depends on your goal. If you want to build a business that's profitable, absolutely this is the way to do it. This is how you become profitable. If you are doing this as a hobby, or you do this for charity and you intentionally want to create images for people in need and you know that and you're willing to donate your time, yes! Do it however you want, give away your time, give away your products. But if you have an end goal in mind of making a living doing this, starting your business out strong, starting your business out in the black instead of in the hole is absolutely the way to start. So maybe start it a little slower. But you would never go work for somebody else and not get paid, right? So why would you ever work for yourself when you have control over it, for free? Something to think about. Any other questions about this?
I imagine that you have pretty high-profile clients at this point, but when you're starting off you generally don't. And I'm having a really hard time right now I'm also doing this part-time, and the end goal is definitely to do it full-time but, branching into getting those higher-profile clients has been really difficult and I even come across certain clients, these are not ideal clients at all, I'm sure we've all had them, who ask "Why am I being charged so much?" And I don't want to have to break down and do the math, but I'm also a very nice person and I don't want to come across as rude. I had someone once say that anything over a thousand dollars for a wedding session was robbery
Right. And that was the most angry I've ever gotten. But I didn't say anything, and I just don't know how to deal with that kind of thing in the future.
Yeah, absolutely, that's a great question and I hear it a lot. The first thing is never do the math in front of your clients because they don't care, really. You care about the math, but your clients, it's not their deal. So what I would say as a general overview is that when your brand and when your images and when all of your business is professionally put together and your price list is, after this workshop, ready to go and dialed in, that when you walk in to that sales room and you know you need $800 or whatever it is, and you have an easy, clear path for your clients to get to that number, That you'll quit hearing those questions. If you do continue to-- It may be that it's just a, you know, an anomaly, that somebody comes in, it wasn't your target client, they don't really appreciate what you do, that happens to everybody, no matter who you are and how experienced you are. But if that's happening regularly, it means there's a disconnect somewhere in your business. And so that's what we're here for right now in this class, is to get rid of those disconnect, shore it up so that you walk in and you are excited and prepared for all of that. Okay, so hang in there, by the end of this you're going to walk in and they're gonna be like, "Oh my gosh, it's only $800, awesome!" (laughs) Yeah.
So we have somebody who had asked about, Peter Glenn said, "If you're just starting out what should you charge?" And I think a lot of people get a little bit hung up on that in terms of if I'm not just kind of like what you asked if I'm not as established, but does that sort of bring the whole industry down? Do you... Is it going back to this is what I want to make and this is what is is whether I believe in my value or not? You know what I'm saying?
Yeah, that's a great
Question, absolutely. So I'll tell you how Peter and I started and... Yeah, this is a good story. So we were working with an incredible photographer that was mentoring us and training us. And she was fantastic, generous with her time and all of her knowledge and... so she told us, "Start where you want to be." And so we looked at what she was doing and we bumped our prices down just a little bit because you know, we weren't her and we went in there and our first collection that we sold out of the get-go, started at $600. Now we had a young family, we were brand new starting this and we had absolutely zero confidence walking in like we would never spend $600 on photography because we can do it, right? We can create anything we wanna create So as artists, we don't have as much value on our images because it's easy for us. But for somebody that can't create it, this is the gift of a lifetime. You're photographing their families, you're photographing their wedding. You get one shot at this, it's gotta be great. And we're all great as artists out there. So, you have to use these numbers as your guide to say, "This is what's required to make a living doing this." Otherwise, give it away for free do it for fun and go get another job. Right? Get a job making the money that you want and do photography for fun. It's hard work owning your own business. It's really hard work, it's scary there are big risks. You don't know when you're gonna get paid. So it's really important to make sure that you have your numbers behind you. You know what's happening in your business so that you can do this for the long haul and you don't get burned out and broke.