Simply put, a benchmark is a standard by which something can be measured or judged. What does that have to do with PPA benefits? Well, PPA surveys hundreds of photographers and studios across the country to establish benchmarks specifically for you! It's PPA's Financial Benchmark Survey, Analysis & Toolset.
Where They Come From
To develop these tools, we collect photographers' financial data, analyze it with accountants from our Studio Management Services (SMS) team, and then establish benchmarks (or goalposts) for different financial categories. These benchmarks are designed to help you set sales and expense targets, and then use those targets to develop goals for your business. The end result is a unique set of tools to help you set goals and measure your studio against many others in key financial areas (cost of sales, revenue, expenses, net profit and so on).
So far, PPA has held three surveys--2005, 2008 and 2011--and the latest survey is being analyzed right now!
How They Can Help
In a sense, the Benchmark Surveys provide financial snapshots of the industry, showing what it takes to achieve specific financial results in a photography business. For example, they make the connection between your total sales and your take-home profit, so you can determine how much you need to sell to support your family. They also help you gauge expenses, like how much you're really spending to produce your products and operate your studio.
"The Benchmark Survey has been a good way to measure our costs to an industry standard," says Susan Hoermann, M.Photog., CPP, of Evergreen Studios in Texas. "It gives us an overview of where our industry is headed, what is an acceptable cost of sales and where we are in relation to other businesses."
In fact, with the Benchmark Survey findings, you'll discover not just where you should be, but where you could be profit-wise...and start learning how to get there.
To get a sneak peek at the 2011 Benchmark Survey results, watch "How to Measure Success: Key Findings from PPA's 2011 Benchmark Survey." If you have an Online Learning Pass, you can get this and unlimited access to all live and archived webinars for just $99!
PPA's Studio Management Services team has created a suite of nifty Self-Evaluation Tools to answer some questions that members often ask about their finances and their business plans. A brand-new version is coming soon, but in the meantime, these free tools will guide you step-by-step in calculating how your studio measures up to the Benchmarks:
- How Does Your Studio's Cost of Sales Compare to the Benchmark?
- How Does Your Studio's Overhead Compare to the Benchmark?
- How Does Your Studio's Marketing Compare to the Benchmark?
You can also check out free online articles, PPA Benchmark Reports and the PPA Business Handbook for more critical insight on what it takes to run a profitable business--and how the PPA benchmarks can help.