Understanding Your Numbers
Going into it everybody we want you to keep an open mind because you know you're going to hear some terms that you know in the past is kind of like with branding and nothing and I really need to know that and you know what we want you guys tio take away from this segment before we go away to lunch is that you can get your arms around your numbers in it can help you have a better business and really this is one of those things that like sara was talking about yesterday there's certain things that your business goes along like this like this and then there are other things that you can do that can make a business go like this and understanding your numbers and understanding and having a plan of where you want your business to go is one of those things so we want to jump in and start talking about some of the terms that you guys have probably heard and there's nine hundred different ways to do these types of things but we're going to make it as simple as possible for you so that you can u...
nderstand what they are and how they help your business yeah and the reason we realized this was so important was because we were ad agency people and in an ad agency clients come to you and say here's our marketing budget here are our goals go make it happen and we would take this budget we'd be on tv radio drink market and we do all this fun stuff they get results and they move on because they were responsible for the business side of their business so they the way we had a lot of successful clients they sit in the room and calculating go based on there were expected return rate they would say yes let's do that I can picture these clients sitting there but we have no idea what was happening on the back into their business. Well then when I became a photographer and I learned all of this stephanie I've had great mentors and I've got programs like success where and I had people that held my hand and tommy this stuff and then I started teaching photographers excuse me and they would all come to me and say I need more klein if any were clients anymore clients and when I first started I would I would start help them with promotional plan and then I started digging we had some programs we offered where we would dig into numbers and we would get feedback and we just had one in the last year that we've worked with where she was generating several hundred thousand dollars in her business and not making anything and we see that over and over again it's not uncommon she did not need more clients she need to under she needed to understand where was all this money going? Because what? I'm sure everyone's felt this at some point I know I was there when I first started you're taking money and you're busy you're thinking you're rockin and then they're never how do I not have any money? Yeah, and I think when I first really realize that when I hired my first employee and I'm like I'm wearing her check every two weeks I want to check every two weeks and I heard someone say that early on when I was in my career and they said write yourself a paycheck if you can't cash it, tape it on your bathroom mirror how long is it going to take you to realize that you're given probably given it all away or that things need to change in your business when you get up and you look in that mirror every day and you see checks that you aren't getting your pay and maybe some of you are paying employees even if you decide to pay yourself a small salary, what you'd make it a say even a minimum wage job figure out what that is and pay yourself that and if that checks still sitting there, then you knew we'll light a fire, you'll come back to this recording and you'll watch this segment and a lot of people have tears and when they realize that, you know I'm not making money a lot of my friends who are speakers and industry have have said openly I was in tears when I learned that I wasn't making money so let's go through terms because we like to start high level I mean we could do a whole week long course on this little chunk really on each chunk or doing we want you give you guys the eighty z high level so you understand what it is and it's not so scary business plan is such a scary word marketing plan is such a scary word so we're gonna make these really simple for you guys okay business plan kind of small words here but you guys can all cannot see so let's talk first big picture business plan okay big picture business plan you could take a course or get a book and we're gonna talk about a vision and a mission and you know all these different things in there but really on a high level what is your vision we talked yesterday where someone called in and said I want to serve people who don't have the money for a wedding well that business plan is going to look different than someone who's saying I want a profit I want a business for profit I don't want to work week nights and weekends you know what is your big vision for your company why are you doing this? You know trotman's shared kind of their vision she's working in a non profit and helping with the studio and they love it where they could work together and they their hands on parents and that's a big part of their vision so all the decisions were making have to come from that vision absolutely and carry mentioned to that travel is a passion of hers and so for her she wants to be able to t juggle both of those passions photography and travel and if you are doing if you're shooting, you know, five sessions a day, six days a week, you're not gonna be able to travel, right? So you have to weigh that and that goes into that business plan of where do you want to be? And this isn't even where do you want to be ten years from now or twenty years from now? It's, where do you want to be next week and that's what a business plans about yeah, because all of our decisions are made from this and so I want you guys just take a sheet of paper right business, plan on it and write that big overarching why air you wanting to be in business so you can have the flexibility to be with your kids or travel or whatever it is? And then we also look at your projections and your financials a scary number part of business but here's the thing so your projections and I am a projection aholic I take those numbers out of success where and I have us projected in both sarah petty photography in the joy of marketing per month for the whole year so basically in a nutshell I'm looking at this is what I think will bring in revenue and then these air what the expenses are so I know what my rent is I feel that in all the way across I know what my payroll is I feel that all the way across the no office expense I look at last year and I just ballpark fill that in and then if I say, hey, we need new computers so I go put under you know we need new computers, I put money there and then I look at the number at the bottom and I say, ok, I'm not making enough money or I'm good we can't afford computers how can we do a proportion let's, we need a new camera list do an event at the studio we need to increase by ten percent if I'm going to do this if I'm going to do that, we're building a new studio and I have a good grip on what what it's going to take for me to build that new studio and feel secure three kids and I want to travel and do I don't want to be building poor where every penny we make goes to that building and we're missing out on this fun ages of life so I know teo teo the dollar pretty much what I can afford and we're building within that and then your financials okay looking those kind of go with projections but big picture here's the bottom line with a business plan and this is what we work with people every day how many sessions are you going to dio at what average to make what you want to make? So I told you about that top bar of what am I going to make and what am I going to spend digging deep on the what am I going to make? I break that down into how many senior sessions at what average, how many kid family at what average? And this is where that software helped you? Well, I talked a little bit about success where, which is financial management software, it tells me my average for kids for seniors. So the end of each year when we're doing this for next year saying ok, how did we feel? Do we do to many seniors? Do we want to do more? We want to keep a good balance in our business we don't want it to be, you know, skew one way or another and that's when we make all of our decisions and we can look at those average sales and say, you know, our average sales went down for seniors this year. What did we do wrong? What can we dio? Can we create a new product that could be an add on product? How can we get those sales up? But the bottom line is how many sessions at what average to get doesn't make what you want to make to make what you want to make, and I think again, you could make this is difficult as you want, sarah and I have have a masters in business, you know, degrees so we could tell you, yeah, you could do a thirty page business plan, but you don't need to, you know, and that's what we said, we want the point of this, this segment for you guys is to let you see that it doesn't have to be hard, and it doesn't have to be so complicated and so overwhelming, so truly for a business plan, all you need is exactly what sarah said. What types of sessions are you going to dio? How many of them are you going to d'oh? And what do you need your average sale to be from each of those types of sessions in order to make? That gross number so that's that's the gross revenue number that's not how much money you want to take home yeah, we'll get into that a little bit more but you want your business tio if you want to do two hundred thousand dollars in photography how are you going to do it? Yeah, so with you guys in our live audience how many of you? No just off the top I mean, I'm not going to have you share, but you're are you do you know your average sale do you know how many sessions you do it what average? You feel like you have your arms around that because you have your wife who's the business person how about you guys and mad? I know you're a little bit newer so you're you're having newer number so you're doing a little more guessing that you people that this but how about the three of you kind of you have your arms around it a little I'm pretty new to so I'm kind of off the on the guessing I was a little bit there. Okay? I use another software, okay? And I don't have it broken down into averages ok about something that would really help you I mean, I think I know okay, but you have a ballpark, so you know, ok, so here's the thing with that is this afternoon, when we're talking about what products to sell and what how we price things will keep, we'll go back to that business plan, and I'm telling you, when we get into sales tomorrow, I'll just tell you right now that it takes the same amount of work and effort to get a fifteen hundred dollars sale, as it does one hundred fifty dollars sale, so we're very concerned with average sale because if we don't know what that average sale is, we're all over the place and were we don't know what to sell them, right? Right? And you don't know when you're going into a session, if if you're going to have a small order or a big order and then you get some small orders and then your system breaks down, you don't have time to serve the clients who really love you. And so that's, why every part of this system is so important. So you guys at home and you guys let's talk more about those numbers, start working with those numbers, but even all of you right now can say how many sessions next year do I want to do it? What average to make what I want to make and even even, you know, even if just thinking how many sessions do I wanted to shoot next year seems too big like seems like too big of a thing start breaking it out by weeks of my month you know by month bye week you know you want you in the summer you're not going to shoot us much because your kids are home for the summer so take that into account. You know, in in the busy season, you know you're going to shoot more take that into account. So how many sessions per week per month do I need to have? And then what average does that need to be? So I mean, it could it could be hard to say I want to do two hundred sessions or I want to do one hundred sessions or fifty. So think about it if I want to do one a week or I want to do two a week, then that's where your numbers and then you start saying, hey, I only want to do two a week, but I want to do five hundred thousand a year. Well, you better be getting a pretty big sales average from those. Yeah, well and you have to look at your business model to I want to have the touch the high touch with my clients and meet with them and do the consultation I want to do the sales in person I have friends in the industry who are shooting eleven, ten, ten, eleven, twelve sessions a day, someone else sell someone else does every other part I don't want to do that, ok? I don't want ten sessions a day, I could never survive doing ten sessions a day, so if you're saying, you know, I want to serve the low end market, but I don't want to do more than one session today. Well, then your your salary is a little bit limited, and if you're okay with that, then that's perfect, you've got a plan, you've got a vision and you're good with it, it's, when you're looking at this part of it saying, I want to make one hundred grand a year net, I want that to go my pocket, but I want to be the cheapest and I don't want to shoot a lot each day something's gotta get something, something that not a line there, okay, something's not line there and you guys that are new or will groove that out, you may be the one that's like I don't want to sell. I don't want to ever talk to clients I just, you know, like the surgeon who just comes in when everybody's asleep and does the operation that maybe or your things so that's, what that's, what the vision plan is just from a really high level, getting clear on the decisions you want to make. Ok, so we really want to start there, then inside the business plan, we've got the marketing plan. No, most people talk about a marketing plan, they think that's where do I advertise? Right? Made a marketing plan? Do I do newspaper or tv or radio and that's, not the marketing plan. Okay, that's and we'll get to that that's inside the marketing plan. But what the marketing plan is is getting clear on all of these decisions that we've been going through so far who you are, what makes you different, how you're positioned in the market. You know, we talked a little bit yesterday about how you're different coke or pepsi sweeter than coke. What are you to everyone in your market? Are you the wedding photographer that comes in and turn stuff around and brings the images back? A reception that's, what you're known for? And everybody loves you for that? What is it that makes you different? And again, you're out there buying tv ads, radio, newspaper magazines or just mailing postcards. Whatever you're doing and you don't do this first, you're not going to get results. We talked yesterday about how we had clients, it would come in and near the ad agency and same with photographers that we worked with and they say I've tried everything, it doesn't work and this is where they go wrong they jump right into the promotional plan, which is what we're going to talk about next without doing the work in the marketing plan so they haven't thought through all these decisions and they're not clear on who it is they're actually trying to target and they're not clear on what it is that makes them different and they're not clear about what position they own in their target audiences minds what did the target audience think about them where their competitors are for that matter? So this is where that type of work needs to happen is in the marketing plan, the cool thing is you do a marketing plan and this is something that really you you do once you pull it out every year you look at it, you make sure you're still kind of in the same place you haven't changed your direction, you haven't changed where you're going, yeah, it so you don't need to do it all that we talked about the pin board is that where you're feeling lost go back because that's your brand that's part of your marketing plan what what who are you all those words that you guys are working on of? What makes you different and the images and the feelings go back like aaron said once a year it's not something you need to obsess about like you should be paying attention to your numbers monthly week klay your marketing plan the hard work is done up front and then it's more about making sure you're consistent and following through on that now this is one of my favorite parts of what we teach and we're going to be going into this this afternoon inside your marketing plan is the marketing mix and this is your cake mix this is what you guys are all all of the ingredients that you guys are putting together to make your business cake we talked a little yesterday about if I sent them all home to make a choice we'll take they're going to come back with all these different kinds of chocolate cakes chocolate brownies, chocolate cupcakes chocolate cheese k it's getting ready to be lunch way should go make a chocolate but the point is you're all getting his sugar you're all going to use flour maybe not maybe your kids gluten free because you're saying I can't have flour so that's what makes you different but you're pretty much using similar ingredients which is what all photographers air doing we're using similar ingredients but what the fear is I think with people is I've got to offer everything I've got to do everything and what you've gotta learn is that for your cake to be better you need to really think about what ingredients you're putting in your cakes are you putting brown? Are you putting nuts? What kind of nuts? No one else in your towns using nuts, maybe not serve the way to go? Yeah, exactly and I think you know, one of the best way talk about what goes into your marketing mix and that's getting really clear on what products you offer um and one of the best analogies I've ever heard about your price menu. And I don't even know where I heard this. You may have been the one that said this I don't know probably you wait to hear before I take credit of lane, but to think about your product mix and think about your price than you and what products you offer your clients as you would if you owned a museum when you're in a museum, more stuff in the museum doesn't necessarily make the museum better. So if you're that curator of that museum you want, you want to put some focus on some major pieces, right? Because that's what's going to attract everybody people don't go to a museum to see you twelve thousand artifacts they come to the museum because they want to see this particular thing that was unearthed, you know, this particular time that everybody knows of the venus de milo or, you know, whatever it may be but a museum curator is job is to cut things out, right? So that that when people come to that museum there getting an experience that that thrills then but does it overwhelm them? And so that's your job as an artist, when you are presenting your product mix to your clients, is to be that curator of your business and to show them what it is that you know you do that's different that is going to best reflect their artwork in their home, it's not to overwhelm them with twenty, five hundred different products, and I don't care what you want, it's all great! I love them all. You're the curator of your business, you're the curator of that of your photography and it's your job t pair things down yeah, and that's one of the hardest jobs we have because, like in a museum, you everything's cool. So you think you want to show mohr, but we know that people will get halfway through and be like, ok, let's, go to hard overwhelm is the biggest thing that we see, so the four elements inside this marketing mix your products, we're going to go through these this afternoon, we're going to use the trout mints as our, you know, our little guinea pig example of they get to be our test subjects what products offer and we're going to look at maybe some of you guys is products and see if there are things opening up for you like oh my gosh I don't need twelve finishes on every photo pick the favorite one we're going to go through pricing and we're going to talk more in depth about how to price your photography for profit if assuming your plan I'm kind of going with the assumption throughout that everybody's here wanting to make a profit there you guys are all nodding sometimes that's not people's ultimate goal and that's okay, but what I said at the very beginning of this course whether you're have a staff of thirty and a three thousand square foot building or you're a part time parent doing it on the side for fun you can still be profitable so what we're teaching is how to create a profitable business so we'll be talking about how to price for profit this morning a little bit. We're going to talk about cost of sales, which is a part of pricing and we have some some fun people to bring on to share that with you we will talk about packaging and that's ties in with branding and it was fun to get to see you guys see some packaging elements and start to talk through how does it look? Because if we are a business worth mohr we can't put our photos are pictures we call them images or artwork but we can't stick him outside our door and a milk carton crate you know to let it get rained on we want to treat it as if it's an artifact and it's beautiful and people have made an investment in it so packaging is really important we'll be talking about those three things this afternoon and then tomorrow the fourth element of the marketing mix is the promotional plan element this is where we attract clients this is what people think is marketing but this is part of marking its like a square is a rectangle but rectangles not a square is that right promotion plan is part of marketing but marketing is muchmore than promotional plan. So all morning when you guys were fresh we're going to talk about how to create a promotional plan that attracts the right clients and keeps them coming in all year good feeling we have claps, we have tom cruise jumping on this way and then in afternoon part of the promotional plan believe it or not is selling ok, we have to sell and I know that everybody thinks that's a dirty word for a letter word where artists people should love it but if you create a plan that's not sales e and pushy it's serving your clients better because clients come to us because they want photography and so tomorrow afternoon tomorrow's just a really jam packed day to afternoon we're going to teach you how to do that so that you don't get people saying, can I go home and think about it and then they never end up ordering and then they don't get what they came to you for and I feel like we're doing them a disservice ok? So we're going to talk about how to attract them and then how to get them I'm so excited that they can't say no to what you have so that's kind of the whole who I get to make this one yellow promotional plan so do you guys does that help you guys understand how all these fit and do you have any questions or comments or things that have kind of opened up for you when you hear this or things that you're going to do differently or things you need to work on? Maybe I mean, just looking right now with marketing plan that's the base that's where you have to start and you can't go yelling at the rooftops I need clients if you don't have your brand your identity who you are because who knows who's going to come back to you? Yeah, I'm not going to get the people that you're looking for, so if you're trying to be a high end boutique business, you don't have your your brand identity you maybe bring in all the low income customers that aren't going to be willing to pay exactly the prices is really good for the newer people watching because you maybe haven't made some of these mistakes yet e I think a lot of this course that's what what our hope is that we're highlighting and shining a light on places that you could potentially be making mistakes and not even know it or making mistakes in the future because you didn't do this foundational work and really get clear on who you are it's really fun to to see that so many of you know who you are but you were not you are not getting your arms around it yeah, yeah, very cool, very cool any any comments, anything earth shattering from home? There's quite a few questions about just how do you get your first customers? Where do you start is kind of like the overwhelming question that whole customer questions over going to cover that this week so that the customers are attracted in the promotional plan. Okay? And we'll talk a lot about that tomorrow morning in detail from the first customer do the right customer to repeat customers that's how you build a healthy business but it's like a monopoly do not pass go do not collect two hundred dollars if you don't have this foundational work done, you shouldn't be attracting clients because you're not going to be clear on who what makes you different how to attract you know a lot of attracting the right client is knowing who you are dealing with that so they are being very clear on who they are, which I talked about yesterday I mean, you know, visualizing who that person is actually putting a face on them thinking about what they're going through all day long in their life what their life looks like that is so important and I think you know if you're just you have this you know weii laugh because I remember we had a our staff we had a cutout of rene and we said, you know she doesn't like to be photographed and it was you know you see those you know like in the school yearbooks you know make sure no photo available yeah it's like you should not that should not be your ideal client your ideal client should you should know exactly who she is or he is or what you know what they are so through the black silhouetted shape that you can't see a face that's not it so that's part of that marketing plan work that you need to dio yeah yeah and so hopefully that's getting more and more clear to people that if we would have started with that piece and we could have started with ok here's how to get your first clients we would be doing you guys a disservice. Can you see that? Now you can see that you probably came in here thinking I want to know how to get more clients, didn't you? I know every single one of you did well, I know you guys, didn't you're like I want a look, but what you'll find is that if you do this foundational work, you're clear on where you want to go in your business, you're clear on who you are and what makes you different and what you love to shoot, you're going to shoot what you love, which is going to be the dog whistle that attracts people who love what you d'oh, they're going to refer their friends and it's not going to be all about what price that's the whole goal of everything we're teaching here is is to stop all the price conversation prices important we'll talk tomorrow about howto have that conversation with your clients, but it but it's, not the decision making factor for most people. If you think about how we all buy things, we all buy things that air we could get cheaper, we buy designer jeans that we could get cheaper, we buy designer glasses we could get cheaper, we bought we get our hair done professionally when we could buy a box at the store we buy branded things when we just generic you know, even at the grocery story, you know, you make a decision to buy coke instead of buying the store brand cola, you know? We all make those decision, but even in service industries we work with companies who take great care of us and we're ok paying more because we can call them up and say, hey, my favorite paint store in town, I have their paint deck and I call them on my way home for my studio to my house and I say we please mix up a gallon of this number and they have it waiting for me, I don't even have to sign your pay or anything they just having account they bill me later and they have it ready for me. Well, I could get cheaper painted twenty other places, but I love being treated that way because I'm a maniac and they take care of me. So we have to look at everything we're creating in this business as something that's going to create a business that we love and clients who love us so part of attracting the clients I know that's not what you're you're everyone online wants to hear that part of attracting the client, the right clients and getting them is doing this work first and then getting up early tomorrow to be here with us to talk about how to get the phone to ring