Averages are for Speakers, Professionals use Sales Per Hour!

Every speakers gets up and talks about his averages, which impress everyone in the audience, but much like the government, averages are a vague measurement of a fairly straightforward accounting  process.  This means when you talk averages you can double-talk your way around profitability.  Averages also gives you flexibility in the numbers you present.  As a “business person” I would figure averages by taking the total number of people photographed and divide that by my total sales, which gives me a true average.  However if I wanted to sound impressive, I would take the sales figures of just those clients that ordered and divide that by Only the number of people who ordered (without figuring in no shows, people that realized they couldn’t afford what you were selling or in this economy laid off between booking the session and ordering, ETC.)

Averages also give flexibility for unprofitable work-flow and bad habits. In this profession we have many photographers that appear to be at the top of our profession editing their own images.  Do you  see Doctors running their own lab tests or Lawyers doing their own case filings, of course not, because these professionals realize they have only a certain number of billable hours in any given year and there is always a cap on the maximum amount that a professional can realistically charge per hour.  You worth per hour isn’t based on what You think, it is it based on what the client will pay.

When you are in business you must think of ‘sales per hour’ of your total time.  This means the work you take home with you as well!  You only have so many billable hours and if you aren’t generating $300, $400, $800, $1000 in sales per hours, for every hour you work, you aren’t running a business, you my friend have an expensive hobby.

This is, or could be the downfall of many “boutique” type studios that we always here about.  Try wrapping your mind around this fact, you have two photographers, one is an average photographer, the other a boutique studio owner.  The average photographer sees 1 client per hour for an 8 hour day.  Since he is just “average” in his abilities he generates about $300 in sales per hour.  You then have the Boutique Photographer that is an excellent photographer and has a $1,800 average order.  This sounds much better, doesn’t it?  However to justify the prices that he charges, the boutique photographers has increased the amount of personal attention to the client for that boutique feeling.  He starts meeting with the clients in a consultation, he takes 3 hours to photograph them, he makes a custom slide-show presentations, personally edits the images and projects them for each client.  When all is said and done, the boutique photographer has 7 hours of his time into that $1,800 order, which amounts to $257.15 in sales per hour of his time.  Are you still impressed?

We have all done this when we first started out, but now days it is being taught as a standard operating procedure.  When I used to do weddings, I would go up on my prices, feel nervous and then add more to what the bride was getting.  I would charge more and profit less every time I went up on my prices!  Today you have teaching photographers telling their students to give away their personal home life to be able to have “control” over their process.

If you are will to give away your time at home, the love and respect of your spouse and children it should be for a hell of lot more than $257.17 in sales per hour.  If you don’t mind heart disease (from lack of rest) divorce and never seeing your children, stay at the studio, photographing late into the evening.  You will be a huge success for all those client wanting evening appointments and at least you will be generating a professional photographers sales rate per hour, not taking over an assistant’s job editing down images you over shot in the first place.

If you truly want to make a good living in this profession you must go back to the basics, the basic sessions or packages you offer.  Start off with the smallest packages and sessions you offer.  Figure out your sales per hour for the smallest session/wedding package you offer, then as you increase the time spent on each larger session/package for weddings, make sure that average sales per hour goes up proportionately and definitely not down.

Most boutique studios will make more PROFIT on a simple session with a talented photographer than the super-sized session that takes three hours.  If you personally shoot  a 3 hour session,  I have to ask, “what in the world do you do for 3 hours.?” Do you break out a Monoplay Game or a deck of cards?  In a one hour session with a Senior or Family,  I can take more photographs than my clients can actually view, so what happens,  you have to edit them down and start the downward Profit spiral of ‘over shoot and edit down” which so many studios subscribe to today.

In keeping accurate records we have found that as the size of the sessions increase, the size of the order don’t increase accordingly and most of the time don’t cover the additional time spent even with the higher sitting fees.  Our average studio session is one hour, with some seniors doing up to three sessions, (studio, outdoor, urban) and the sales almost never make up for all additional time, even figuring the higher sitting fees.  Because of this we offer our most profitable standard session to our clients as “what everyone does”.  When you tell a client that a less expensive product is “what everyone does” they tend to believe you and follow your advice!

To deal with this problem we have developed special products which are designed for the variety of larger sessions which helps bring up the sales per hour. Some photographer work with minimum print orders that increase with the amount of time spent in the session, which is an excellent way of handling this problem.

The largest problem that photographers have when dealing with these issues is thinking like a photographer rather than a business person.  A three hour session, going outdoors, to an urban location and then finishing in the studio sounds like fun to a photographer, but unless this session can have 3 times the sales of a session done in just the studio, you are shooting yourself in the foot.

The same things happens with wedding photographers and the time at the weddings.  Not to many weddings can be done with 2 hours of photography time, but if sell a package that has only 2 hours of time, a larger package that has 6 hours of time better generate at least 3 times as much in sales.

The Number 1 rule as a “Professional” that wants to live well is control your billable hours and always base your prices on Sales per hour and nothing else.  Rule 2, delegate every task other than photography to someone else.  I don’t meet with my clients, I don’t get them ready for their session,  I  don’t set up their background, download their images, present their images, edit them, print them or deliver them.  I photograph, because I am a photographer and generate the most money with a camera in my hands.  If you think this is wrong, look at two professions, doctors, that deal with client very much like I do and photographers, that often try to do everything.  Look at difference between the average doctor and the average photographer in the houses each live in and the cars they drive, Any Questions?

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~ by jeffsmithbooks on December 12, 2009.

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