Be Careful What You Wish For

Movies and television have taught us to always be careful in what we wish for, with countless thrillers that show the darker side of when wishes come true.  Unfortunately, the same darkness can come to our business when we don’t understand completely what happens when our wishes come true.  I was a product of the Eighties, where bigger was better and more was always better than less.  My wife and business partner shared my “Eighties Outlook”.  We took our single small studio that photographed every client type and had a high school contract for one, smaller high school (senior class size about 70 students) to having Two Studios that specialized in seniors and that contracted 14 high schools with over 30 employees, in just a few short years.

Our main studio has been in Central California, a nice enough place, but it seems the weather is either too hot or so foggy you can’t see your hand in front of your face.  It has always been a goal for both of us to work and live at the coast.  With our second studio being right outside of Monterey, one the prettiest places in Ca. We thought we had arrived.  While all these things looked good on paper as goals and felt good to achieve, there was a huge dark-side to our new found achievements.

While most people would consider the amount of profit our company generated to be significant we saw that while we added tremendously to our liabilities and the amount each month we had to generate to stay profitable, our percentage of profit went down considerably.  This is why I laugh to myself when a speakers talk about having a million dollar studio or one million dollars in sales.  How much you sell isn’t important, it is the percentage of profit on sales that matters and how “at risk” you are for that profit.  If you generate $50,000 in profit on $300,000 in sales, but to increase your profit to $100,000  you have to sell a $1,000,000 in product you are more financially at risk.  You overhead can easily easily wipeout your profit with any downturn in business. Many photographers that appear to be very successful have incredibly high expenses when you look at the profit generated by their business.

In addition to the concerns about our financial risks, there was the personal struggles of both of us working 6 to 7 days each week.  We finally reached a point, with our children getting older and realizing out time with them was limited we decided (actually my wife decided and I was reluctant because of bigger is better thinking) to start downsizing.  We started cutting the number of schools, the number of employees, we even closed our studio on the coast to get our lives back.  An amazing thing happened, although we had scaled back signifgantly our profit the first year actually increased.  As we had gotten bigger and bigger I spent more time running the company than photographing, but my photographs are the reason that clients wanted to come to our studio.  With me spending more time in the camera room sales increased dramatically.  I had more free time to write, to invest and follow many other profitable ventures that I never had time to even consider when we were chasing what we thought was our dream.  Now,  I say I am Semi-retired at 47.  I work 2 to 3 days a week at the studio which is very profitable and love the freedom.  So as we look to the New Year, always be careful what you wish for!

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~ by jeffsmithbooks on January 1, 2010.

One Response to “Be Careful What You Wish For”

  1. Very Insightful…Thank you 🙂

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