Today, in the third installment of our series of articles featuring the "seven deadly sins" of financial management for photographers, our main subjects are about just that--too much of a good thing isn't always the right thing.
If you've missed one or more of the previous articles, you can find Part I here and Part II here, but let's start with a quick summary of the sins--or transgressions--we've pointed out so far:
- You can ignore it--in this case, your financial statement--but it won't go away.
- Failing to plan is planning to fail.
- Failing to think like a businessperson as well as an artist puts you at a disadvantage when your entire focus is on your passion and not your profitability.
- Trying to go it alone means you turn away from financial advisors and peer groups that can help you understand financial results and get new ideas for improving profitability and efficiency.
#5 - Trying to Fix Too Many Things at Once
You've admitted you have a problem. You've taken the first step of really analyzing your books...and guess what? Being brave and facing your numbers has likely produced a whole list of new ideas to make your business more profitable. So as your mind races with all the things you can do, it's almost too easy to head off in multiple directions without a clear plan for success.
Not so Fast
"Stop," says Scott Kurkian, PPA chief financial officer and founder of Studio Management Services (SMS), PPA's business and financial management practice for photographers. "There is a time to take action, but before you rush out and start implementing sales and marketing programs, you need a plan."
A great place to start is a detailed read of PPA's benchmark survey analysis, which can help you measure your business against industry averages to determine your strengths and weaknesses. And that, of course, leads to a look at the opportunities and threats.
A detailed and well-reasoned S.W.O.T. analysis is the foundation of a great marketing plan. And it doesn't have to be a long, drawn-out process, says PPA's chief executive officer David Trust. "Make an appointment with yourself. Set aside a few hours, grab a cup of coffee, a notebook and a pen and start with your strengths," he advises.
We'll talk more in-depth about marketing planning next week, but if you decide to try this at home before then, don't forget to clearly articulate your weaknesses and threats as well. They'll reveal as much, or even more, about where you need to focus your sales and marketing efforts.
Focus. Focus. Focus.
If you don't understand what you need to improve or, in some cases, minimize, you'll lose focus on what you need to grow. And that focus, Trust says, is the key to avoid failing by overreaching. "Photographers have to be relentless about sticking with the products lines and clients that generate the most revenue for them. It's a basic tenet of small business management. You have to be vigilant about focusing on your core competencies."
Focus on the most profitable product lines and customer types and, Trust concludes, "be ruthless with yourself about pricing properly."
Kurkian also points out that pricing is one of the most misunderstood and difficult concepts for photographers. "We spend hours on pricing in SMS workshops because it's a complex concept that photographers need to grasp in detail in order to improve profitability. We'll never get where we want to be as a business if we fail to price for profit."
This focus on focusing leads us to the next to last of our deadly sins to avoid.
#6 - Straying Too Far from Your Primary Sources of Income.
"One of the most common marketing mistakes small businesses make is trying to be all things to all people," says Trust. "When focused on driving revenue, it's easy to fall into the trap of chasing after every kind of client. But in reality, that lack of strategic focus will end up costing you in time, resources and lost opportunities."
How do you figure out your sweet spot? Start with an analysis of your previous sales by product line. Which clients produce the highest average sales per session? Which markets have the most potential in your particular area? What kinds of clients do you enjoy photographing--or photographing for--the most?
Look for opportunities to expand to adjacent markets as well. For instance, if you're focused on high school seniors, encourage a pose or two with the family pet and then offer a coupon for another family session involving people, pets or both.
"It will almost always be more cost-effective and more profitable to stick close to your current source of clients and revenue," says Kurkian.
Coming Up Next
Last but certainly not least, our final article in this series will address one of the deadliest of the big seven: failing to develop a marketing plan. In the meantime, get a head start this week by thinking through your strengths, weaknesses, opportunities and threats. You may discover some interesting--and exciting--directions for your business that haven't occurred to you before. The power of a notebook, a pen and a cup of coffee should never be underestimated.
Want to Know More?
If you'd like more information about SMS, you can read all about a typical two- or three-day class on PPA.com. You can also sign up for those upcoming workshops in November in Atlanta or at Imaging USA in San Antonio this January.
Not ready to register for a class yet, but intrigued? PPA members can also check out a variety of resources, including the Financial Benchmark survey, templates and other tools in the SMS section of the PPA website.
In addition to SMS resources, PPA members can also glean a wealth of ideas from the Resources section of the PPA website, including archives of Vital Signs, the weekly newsletter focused on business and marketing information for PPA members.
Do you have financial management success stories of your own that you'd like to share? We're all ears--just e-mail Angela Wijesinghe. You may be an inspiration to others as well!