You've probably heard that PPA has kicked off the latest Benchmark Survey. (In fact, if you participate by August 31, you could win an iPad or more!) But are you set up to take advantage of the information that the Benchmark Analysis is going to provide? To make your numbers make sense--for your own sanity as well as for getting the most use out of PPA's benchmarks and all the educational tools we'll be releasing around the new data--start setting up a managerial accounting system now. Don't worry; it's easier than it sounds!To make your numbers make sense--for your own sanity as well as for getting the most use out of the Benchmark Survey--set up a managerial accounting system. Don't worry; it's easier than it sounds!
Managerial accounting is structured so that everyone (even non-accountants) can tell what's right and wrong with their businesses. That's why PPA's financial benchmarks are structured to support this system. After all, you can't improve what you can't measure, and we want all PPA members to be able to improve their profitability with the benchmarks!
So, in the next few weeks, we're going to work together to set up a managerial accounting system (and get your numbers benchmark-friendly), so you can take advantage of the report when it's published. Let's start this week with the first step:
Step 1: List your sales by product line and category.
Make a list of everything you sell. For example, one product line could be your studio portraits. That product line's categories could include the subjects of those portraits, from couples to children, families to pets or executives. A wedding product line could be categorized by packages, and so on.
Along with being able to compare more specific results with PPA's benchmarks, organizing sales this way will help you figure out important facts down the road:
- The percentage of your income coming from each product line and category (so you could focus on your profitable ones)
- The parts of your business that are growing or declining
- The effectiveness of your marketing efforts for each product line and category
But let's not get ahead of ourselves. This week, your goal is just to make a list of all the product lines that you sell. Be specific, but don't over think it. And don't forget to stay tuned for Step 2 next Tuesday.
If you haven't already, now is the time to sign up for this year's Benchmark Survey. You can be a part of the only industry survey and analysis that helps photographers run better businesses. Plus, the next drawing to win a free iPad is Friday, July 29!
Remember: PPA's Studio Management Services (SMS) can also help you set up your accounts according to managerial standards.