I look at those famous photographers, too. You know, the ones who have tons of gear and who seem to be growing bigger and bigger every year. And sometimes I catch myself thinking, “gosh darn it, how did they get so lucky?”
And then I realize that it probably was only a sprinkling of luck on top of a solid foundation of planning and a bucket of sweat to represent their hard work.
Even though I forget sometimes, I have actually come to realize that so much in business hinges on good planning. And it’s not to say that plans can’t shift and change. They can. But going in feet first with no plan at all can mean rapid disappointment.
“By failing to prepare, you are preparing to fail.”
– Benjamin Franklin
As photographers, most of us just want to be behind the camera. If we had all the money in the world, we’d pay someone to do our marketing, respond to emails, do our post processing and do our business planning for us. That stuff is all yucky and boring. Being behind the camera is fun.
The good news about planning, however, is that you really only need to lay out a photography business plan once a year and then visit it monthly to ensure things are staying on track (or to see if things need adjusting).
If you’re starting a photography business and have never done a photography business plan before, it probably sounds kinda scary, right? Well what most of us think of when we think of the words “business plans” are really long, drawn out documents that take up a lot of time and hard work. But then, they sit on a shelf to rot.
That’s the kind of business planning that I loathe. It isn’t helpful to anyone, except, perhaps, a bank if you’re seeking funding. A solid business plan, and one that actually works and makes a real impact, however, is a business plan that is simple and fits onto one piece of paper.
I’m going to walk you through each step for creating a sample photography business plan.
1. Know Your Strengths
We’re all good at a lot of things. However, when you’re evaluating your strengths for your photography business plan, you’re comparing yourself to your competitors. So let’s talk about each of these things for a minute, starting with your competition.
Your competitors are your real competitors. Meaning, they’re the other photographers that your customers are considering when they’re looking for someone like you. So if you’re a wedding photographer in a really big town, you might have 3-4 actual competitors out of all of the dozens of wedding photographers serving your area. And even though there are other photography businesses, your competitors are only really the select few that your typical client considers.
Now, picturing those few competitors, when you’re thinking about your strengths, you want to be thinking of the strengths you offer that these competitors don’t. Perhaps it’s that you’ve shot at more locations than they have. Or perhaps it’s that you’re more networked than they are. List whatever strengths allow you to shine, where your competitors are weak.
For our sample photography business plan, we’re going to pretend we’re a portrait photographer in Philadelphia. We’ve evaluated our competition and narrowed it down to three. And after careful consideration, we’ve listed our strengths as being: better customer experience, more referring partners for our business, and more connections with Philadelphia non-profit groups.
Why are strengths important?
Because when you realize your a list of strengths that your competitors do not have, you may see some opportunities for further growth. The key to market significance and capitalization is to leverage your strengths to their fullest
Too many photographers try to match their competition. That just creates more of the same. Leverage your unique strengths, instead, and leave the competition in your dust.
2. Identify Your Weaknesses
So while strengths are competitive differentiators, weaknesses are holding you back from even more success. Just as we all have strengths to leverage, we also all have weaknesses.
The important thing to remember when thinking about your weaknesses for your own photography business plan is that the weaknesses you list should be things you’re looking to improve before the end of the calendar year. It’s no use listing weaknesses that you have no interest in improving. Think of your list of weaknesses as an alternative version of your to-do list.
When thinking of our sample photography business plan, our fictitious Philly portrait photographer really wants to improve her skills with lighting, the search engine optimization for her website, and her packaging. These are three things that she believes will enhance her business if she can manage to improve them all before the end of the year. As a result, they’re good things to have on her weaknesses list.
Once we know our weaknesses they cease to do us any harm.
– Georg C. Lichtenberg
3. Target Your Ideal Customer
When working on your own photography business plan, your ideal customer might not be the type of people that have hired you in the past. No, this is the opportunity to be super critical and super detailed about the type of person you want as a customer moving forward. They’re the people that make your job easy, don’t ruffle feathers and who are super appreciative of what you do.
They pay what you want them to pay, and they don’t think twice about it. So while they might not be who you’re working with now, it’s important to document who they would be going forward. And be as specific as possible.
For our sample photography business plan, we’re going to list the following attributes for this Philadelphia-based photographer’s ideal customer (see if any are on your list, too):
- the customer lives in Philadelphia’s city limits
- is married with at least 1 kid… usually a dog, too
- An active lifestyle and seems to really like marathons
- both spouses work full-time jobs
- their extended families tend to live far away
- they commute to work each day via public transportation
- they frequently do day trips and go out to dinner on the weekends
So while much of the above list seems to have nothing to do with photography, it reveals some interesting marketing opportunities. For example, in this photographer’s case, they’ve identified that most of their customers participate in marathons. So what if they found an opportunity to sponsor a marathon as a marketing opportunity? Perhaps they could take shots of runners crossing the finish line as promotional pieces for their business. Or, since their customers’ families typically live far away, perhaps they can leverage some product sales by marketing special holiday keepsake books that help to connect families through photography that live miles away?
Some really fun brainstorming can come from listing out the commonalities amongst your ideal customers.
4. Understand Your Financials
All good business owners have a keen awareness of their current financial state. They know the revenue they need to bring in each month to make their number, along with their current standings against the goal. While financials can be a scary thing for many creative types, what I’ve found is that awareness actually moderates the fear. A basic understanding of your photography business financials allows you to plan better and manage the business better, thus alleviating this general sense of ignorance and uncertainty.
So while crunching numbers and determining financial goals can seem like nerd-work, it can actually have a really positive effect on your own personal outlook on your business.
Here’s how I recommend you start:
Determine Your Total Sales Per Month
Grab a calculator and a pen and paper. If you’re an ex-corporate type like me, feel free to open up Excel and do this work there, instead.
You’re going to determine how much in total sales you want to earn for every month that remains in 2017. If you’re a wedding photographer or any other photographer that is booked further out, feel free to start your planning for 2018, instead.
Your total sales generally consist of:
- Session fees/month
- Average product order amounts per session
- Any other miscellaneous fees you charge your clients
If you’ve never done this kind of planning before, you’re probably thinking, “but I have no idea how much I’m going to book from now through the end of the year.” Or, “but everyone orders different amounts of stuff after each session.”
Don’t worry. The lovely part of planning is that we can use rough numbers for now.
To figure out your session fee revenue, determine how many sessions you think you will reasonably schedule between now and the end of the year. Then, figure out how many sessions, on average, you’ll book each month and multiple that number by your average session fee.
To figure out your print and album fees, it might help to look back at the earlier months of 2017, or last part of 2016, and figure out an average print/album order amount and go with that.
Finally, add your monthly session fees to your product order fees and other miscellaneous fees to get an estimated total sales number per month. Remember, a rough starting point is fine. There is an opportunity to refine your estimates later.
Determine Your Cost Of Sales Per Month
For every shoot you book, you have costs. There might be editing costs (if you outsource your editing) or second shooter costs or, at the very minimum, your own costs to the print lab or album company.
When thinking of your cost of sales (otherwise known as cost of goods sold), consider anything that is variable and only incurred if a client books you. Your business has other fixed expenses (like your website hosting fees or marketing fees), but those expenses fall into another area.
Again, if you don’t know how to figure this out, look back at the earlier months of 2017 and associate your averages from this time period to what you’ll incur going forward. Be sure your cost of sales is a monthly number, as well.
Calculate Your Gross Profit
This is a fairly easy number to calculate. Your gross profit is determined by taking your total sales number and subtracting your cost of sales. You should be left with a positive number, which equals your average gross profit per month.
If the number you’re left with is a negative number, you need to take a closer look at your prices. A photographer should never have a cost of sale higher than the total sale.
Identify Your General Expenses
Your general expenses are the fixed costs associated with running your photography business. They consist of things like:
- website hosting fees
- accounting and legal fees – manage them using Freshbooks (affiliate)
- equipment and computer expenses
- studio rent, etc.
In most cases, general expenses don’t vary too much from month-to-month, aside from annual fees or quarterly fees you might pay to keep your business running. For example, I pay my website hosting fee and my email newsletter software fee in an annual payment to take advantage of their annual payment discounts. Therefore, my expenses are abnormally high in the specific month when these two payments are incurred.
Figure out your own personal business expenses per month. Then, add your own compensation to that number. Now, you have a total general expenses number, including owner’s compensation. If you’re currently running a part-time photography business while still working a “day job” your owner’s compensation may be $0, and that’s okay. Obviously, when you’re running a photography business full time and are wanting it to be your source of income, you need to provide yourself with monthly owner’s compensation.
Calculate Your Net Profit
When figuring out your photography business’s financials, the two numbers you’ll find the most enjoyable are owner’s compensation and net profit.
Net profit is simple to calculate. It is your gross profit minus your general expenses. If you’ve been in business for years, you’re likely to have a positive net profit number. If it’s your first year being a photography business owner, your net profit number might be in the negative and that’s perfectly okay if you’re planning for the loss. Many businesses take a year, sometimes more, to get out of a negative net profit (known as operating in the red) and see positive net profits. Smart businesses owners know this ahead of time and save up equity to cover the losses that will be incurred for the first year or so until profits become positive.
If you’re at the point where you’re making money and you’re left with a positive net profit number, you have a couple of decisions to make. You can either boost your owner’s compensation and take home more income from the business or you can decide to invest more money into the business to increase its longevity and future success. There are other potential uses for positive net profit, such as charitable donations or keeping more cash in the business for use later, but investments and bonuses for the owners are typical uses. Investments that photographers typically make are in staff, assistants, new equipment or additional marketing.
5. Set Your Goals
The last piece of a solid photography business plan is articulating some goals for the business. When you’re thinking about your goals for the remainder of 2017, review the sections of your business plan that are listed above. They’re loaded with ideas for really strong, growth-oriented goals.
When setting your goals, remember the acronym SMART. What that means is goals you set should be:
- A well-defined goal so you know your target.
- A way to measure progress toward your goal.
- The goal is within reach (although it may be a stretch).
- You have the means to achieve the goal (time, resources, knowledge)
- A realistic time limit to achieve the goal is essential. Too short and you may get discouraged, too long and you may lack focus.
In the case of the Philadelphia-based photographer we used for our sample photography business plan, she should consider:
- making each of her weaknesses a goal to improve upon before the end of the year
- leveraging some of her strengths through her marketing, such as attending more non-profit group events for marketing and networking, for example
- taking a closer look at her financials for: opportunities to raise prices and earn more per shoot, lower her expenses and/or invest in some things that will help her photography business grow (this is recommended for all photographers)
To help ensure your success, set goals that are Specific, Measurable, Achievable, Realistic, and Time-bound.
Planning Made Easy
A Guide to Crafting a Killer Vision Statement
A vision statement can mean the difference between a ho-hum business and a business that stops you in your tracks. Learn the questions you should be asking yourself, see examples, and learn how to write the perfect vision with this free PDF workbook.
Quick and Easy Template for your Business
I designed a photography business plan template and accompanying tutorial video to help photographers easily create a photography business plan. The best part? You get to watch me complete my actual photography business plan in the tutorial video using the same template you’ll receive, and it only takes about an hour.