Defining YOUR Studio’s Business, measuring YOUR Success!

Why do you charge what you charge?  Some studios take all costs and times that number by their secret number, while many just find out what other studios in their area are charging and charge that.  What if the other photographer that you based your prices on has a father that owns the building their studio is in, while you must pay $2.50 a square foot?  Wouldn’t that make a difference in what you need to charge? What if the guy that you are setting your prices to match has a wife with a great job, so it isn’t all that important that his studio generate a healthy profit, he likes photography and has cheap prices to stay busy, while his wife makes their living, might you find it hard to pay the rent charging the same price and needing living expenses?

How do you sell what  you sell?  Do you sell the way you do because Jim, Bob or Sue sells that way?  Did you hear at a conference or seminar that the speaker and other speakers have adopted this particular method so it must be true?  Do you experiment to see if what you are learning actual is working better or worse than other methods?  I have always shown a client their images right after the session is over.  We do this for many “business reasons”.  People come from very long distances to our studio, people are more excited when they view their portraits, people buy more when they are excited, it is the most effective way to view for our studio.

I listened to all the speakers talk about slide-shows and viewing appointments a week after the session day.  We tried this, it sucked (at least for us!).  My time (actually my employee’s time)  invested went way up and then we had all the problems associated with getting people into the first appointment a second time for the viewing appointment.  We use prepayed sessions to reduce no-shows to the appointments, what do you do when someone does a no-show at a sales appointment, charge them?  I found that my sales went down with a viewing a week after the session because the excitement that exists right after the session was gone.  I found the profit really went down when you figured in the added time, the number of people who it took two and three appointments to finally get into viewing, as well as the number of people who simply never returned.  In our clients eye’s is seemed like the experience was over and now all that was left was the pain that someone imagines when looking forward to being sold something!

I don’t won’t to sell like I do specifically, I don’t want you sell like the guy at the seminar, I want you to find a way to run your business that works for your clients, in your area, in your studio.  No one can tell you how to sell in your studio anymore than what to charge, because you have to base how you set your prices and sell your product by what gets you the best results.  The one thing I see is that the more successful speakers are, the “smarter” they think they are, but unless they are going to pay your bills for you if their ideas don’t pan out, what you are teaching are theories, theories that you must test out before you take the leap!

You have to know how much your studio costs to operate each day you are open and each of the hours of your work day.  Simply take all your expenses, payroll, rent, marketing, utilities, everything.  Divide that number by the number of hours per week you are open.  This will give you the cost per hour of your business.  The next step is to calculate your sales per hour.  Same process, total sales per month, divided by the hours you are open.  Your Sales per hour had better be more than the cost of running your studio per hour or you might need to make some adjustments, QUICK.

If you have never done this, you will be scared to death, which is good.  When you find how much you must sell each hour, it tends to put things into perspective.  The first thing you realize is that you can generate a whole lot more money with camera in your hands than sitting in front of a computer editing images or making slide-shows.  If your numbers don’t work you have to adjust the three basic variables that determine your final profit, increase the price you charge, increase the volume of work you do and/or reduce the time you invest with client/the cost.    Many photographers talk about prices like you can raise them indefinitely, but reality, to be competitive in the real world you have to balance these 3 factors.  Slightly increase prices, increase the volume of your work by reducing the time you personally put into each session, thereby reducing the costs and increasing volume.  As you work through these numbers hire a good accountant to help you understand the areas of greatest confusion. Unless you understand your prices and profit, you will never understand your business’ success or failure.

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~ by jeffsmithbooks on March 1, 2010.

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