In these times of change, keep your business lean!

There was a time in this country when you could count on tomorrow being pretty much like today.  Businesses could make long terms plans for the future and not worry about massive changes interrupting their plans to any great extent.  Today studios that followed these long-range plans without seeing the change on the horizon are scrambling trying to make mortgage payments on a studio building that is worth half of what they owe on it.  Long term clients that used to think nothing of spending $1500 to $2500 in portraits in the standard yearly sessions are now looking for lower cost options and many are looking for lower priced photographers.  In our area, established photographers that have specialized in one type of photography for years, are now entering other markets trying to stay afloat with their debt ridden business models.

Success is still possible in our profession but our business models have to change.  The end goal shouldn’t be to own our studio building, custom-built to our needs (excluding it’s usefulness to any other kind of business) but to run the most profitable business we can,  putting money in our pockets and bank accounts to get us through when times change again and we must re-adjust to succeed in those new times with new challenges.  Cash is king, if you have the cash you can restart in any economy, if you rely on credit it can dry up at a moments notice as we are seeing today.

In today’s business climate we can not trade in perfectly good (almost new) digital cameras that are doing an excellent job, just because a new model comes out that is, in some small way better.  Yes, speakers at programs tell you all about every new camera and how you just have to get them.  They says this because they are paid to say this and they get their cameras in most cases for free.  If speakers had to purchase their own equipment for programs you wouldn’t see the bright and shiny equipment you always do.  It would look as used and worn as yours.

We need to start practicing something that has been done in years, using our lighting, cameras, laptops and equipment until they are worn out and quit working.  Then we need to look at the cost difference between having them repaired or replaced.  What a concept!  Actually use all the life out of something before replacing it!  If you look back in time to even twenty years ago and you were told that the average replacement cycle of a $1000 item like a laptop would be about 2 years, people would say you are crazy, no one would spend that kind of money every two years just because a newer product is available.  Look at the life cycle of our cell phones.  Younger people will get a new phone every 9-12 months, just because there is something “shinier” on the market.

Everyone has a certain amount of money they will make this year, whether it’s $1,000,000 or $10,000 that’s all there is.  While you might increase that amount next year, you aren’t making any more this year, so the ultimate goal to success is spending less!  Keep your cell phone, laptop and studio equipment until it quits working.  Then you will have the cash to buy a new one, instead of using credit to update to a new model that isn’t really any different from the old model.

Look at every additional expense that your business has and ask yourself, is it necessary?  No American, unless trained to be successful will ever asked themselves “is this necessary?”  What do Americans ask themselves….”Do I want this?”  And the answer to that questions is of course “YES!’  We all have a hard time with deciding what is a “need” and what is a “want”, but to be successful in these times you must look at every expense of your business and ask yourself is this necessary?

We go through our expenses twice a year and weed out what is unnecessary in our studio.  It amazes me that we always find services and expenses to cut every six months.  We just had this meeting and there were many things that were discontinued we didn’t think of 6 months ago.  satellite radio, costs the studio $200 a year, works only most of the time in our building (about 1/3 of the time you hear about 2/3’s of each song with segment of silence mixed in).  Everyone that works in the studio has music mixes on their iPods, huge CD collections and if all else fails you have local radio stations, why pay the $200 per year?

Let’s face it, in this country we buy what we have been sold!  We are like sheep following the flock.  If you don’t think so, how many products does the average photographer have from the Apple Computer Company?  How many are necessary?  How many did you buy just because everyone else had one so you wanted one to?  Many Apple fans are sold during the first press release of a future product!

You want to someday be wealthy, make more, spend less!

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~ by jeffsmithbooks on May 19, 2010.

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