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By John Owens
This year PPA is working with Krista Newbill of Murfeesboro, Tennessee, and Wes Roberts of Smith Station, Alabama, in all areas of their businesses to give their studios a total "makeover." Every facet of their businesses will be scrutinized to help them Be More Profitable. The makeover will touch on and improve their business model, branding, pricing, marketing, sales strategy, workflow efficiency and overall profitability--all based on the tools, information and resources set by PPA's Benchmark! project overview
All are encouraged to follow along with Krista and Wes's progress, challenges and changes right here on the blog and watch monthly webinar updates to track this year-long process. It's a series worth paying attention to, as there will be strategies and business tactics you can apply to your business too!
John Owens is PPA's resident wordsmith. Know how they say a picture is worth a thousand words? That's where he comes in. The Connecticut transplant and (still) avid Hartford Whalers fan is an aspiring adventurist/novelist/racer on a lifelong quest to find the best trails, brews and burger.
By John Owens
This year PPA is working with two lucky studios in all areas of their business, to give them a total "makeover". Every facet of their businesses will be scrutinized to help them be more profitable. The makeover will touch on and improve their business model, branding, pricing, marketing, sales strategy, workflow efficiency and overall profitability--all based on the tools, information and resources set by PPA's Benchmark!
Follow these two studios' progress, challenges and changes. Updates will be posted right here on the blog and you will be able to watch monthly webinar updates to track this year-long process. It's a series worth paying attention to, as there will be strategies and business tactics you can apply to your business too.
We're back with an update on Krista Newbill's Studio Makeover. Check out the previous post on the project overview if you need a refresher, and take a look at Wes Roberts' first update from last month.
Below is an update on what Krista has been doing with her team of PPA mentors, the early progress she's made along with some of the obstacles she's facing. Some of it surely applies to some of you and your business... maybe you can consider applying similar changes to Be More Profitable too?
Krista first came to PPA for help with her business back in 2012. At that time her studio's gross sales were down 21% from 2011 and what was more telling, expenses were up and her bottom line suffered, going down 52% during that time.
In 2013 Krista focused on cutting costs. Her sales that year increased and her bottom line recovered. Then in 2014 the stress of running and paying for a retail location caused Krista to rethink her location. She opted to co-lease a space with another photographer. With sales up 14% and her expenses once again down, Krista was keeping almost 61% of every dollar she grossed. According to PPA's Benchmark, top-preforming retail studios keep about 39% of each dollar, proving that Krista was doing a great job keeping her expenses in check.
As she started planning for 2015, Krista was feeling that she was working too hard, too many hours, and not spending enough quality time with her family. "How long can I keep up this pace?" is a question most business owners ask themselves at some point during their careers. That's why the concept of sustainability is one of the most important things to consider when you're planning each year.
What affects your business sustainability? The number of hours worked, stress levels, income, family life balance, and pretty much anything else that affects you as the business owner. Simply ask yourself, can your business continue on the same track it's currently on with you, as the business owner, doing everything as-is? Sometimes it simply comes down to time (or lack thereof). In the long run, can you realistically continue to put in the hours/week that you are currently spending and be achieving your life goals?
Krista realized that she's too busy and is now looking for ways to work smarter, not harder. Her main product lines include weddings, portraits and headshots. She lives near Nashville and has a very large clientele. Up until 2014, Krista created albums and sold prints to her wedding clients, but she only sold digital files to her portrait clients.
By: Lauren Walters
If you're looking to make a bigger profit, PPA's Benchmark Resources are here to help revise your budget. A small change can make a huge difference in your business. In fact, a 1% decrease in your cost of sales and overhead expenses can save you as much as $50,000 by the end of the year.
For a retail studio, overhead expenses should estimate to about 40% and cost of sales at about 25%. Keep in mind that your profit depends upon the amount of sales for that fiscal year. For example, you need about $143,000 in sales to earn a $50,000 profit. Make sure to use PPA's Square One tool to see the change 1% makes to your bottom line.
The video below stresses the importance of creating a strategic budget and sticking to it! Watch and learn more about how to keep your sales and expenses in line with your new 1% budget.
For more information, visit PPA.com/Benchmark. Be More Profitable.
In the previous post 2 Studios Are Getting a Full Business Makeover This Year! you met PPA Studio Makeover recipients, Wes Roberts and Krista Newbill and read the overview of the makeover process.
Now that the makeovers are underway, you can follow along with their progress! First up is Wes as he and the PPA mentor team dove into the financials of his business.
Wes was super excited to get started. He's been working with PPA's Business Consultant and CPA, Bridget Jackson, to get a handle on where he is currently and the best way to move forward.
First, we always did a complete financial analysis of the studio. It's important to know what's working and what's not. We did this by comparing Wes' studio's numbers to PPA's Benchmark Survey. By comparing his cost of sales, overhead and net profit we started to get a good picture of the pitfalls that are causing monetary loss. We also uncovered potential opportunities for savings.
Wes' numbers looked better than the average benchmark studios in 2013 and 2014. However, his 20% cost of sales percentage doubled between 2013 and 2014. While, in general, 20% is a great number to achieve (below the recommended 25%), we had to figure out what has changed to cause such a drastic uptick and put everything in place to ensure that trend would not continue in 2015.
Second, PPA mentors helped Wes develop a photography business plan for 2015 that included three goals:
- the number of sessions he wants to photograph (broken down by month)
- the sales average of each session
- his net profit