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Bridget's New Year's Resolution Checklist - PPA Today

Bridget's New Year's Resolution Checklist


By Bridget Jackson, CPA, PPA Business manager

As you look to 2015, it's important to assess where you've been and where you want to go. It's impossible to achieve your goals if you don't have a plan to get there.

Here are 6 things you can do in 2015 to meet your financial goals:

1). Visit Square One, to get a bird's eye view of your business. Square One will take a look at several factors--how many sessions, by product line, at a certain average, while controlling your costs, based on the benchmark recommendations--to help you understand what you need to do meet your overall financial goals.

2). Implement managerial accounting.  Managerial accounting is basically recording your income based on product lines and expenses based on a recommended chart of accounts that is comparable to the PPA's Benchmark Survey.  If you need help implementing, PPA can help.

3). Understand how many sessions you did by product line at a given average. If you don't have studio management software to help you calculate, use the Sales and Sessions Summary spreadsheet under Managerial Accounting. Understanding where you are versus where you need to be in terms of session counts and sales averages is more than have the battle of developing a 2015 sales projection.

4). Use your managerial financial statements to see how you compare to the benchmark. Perform a couple of quick calculations:

a.     Cost of sales assessment

                                          i.    Divide your total cost of sales by your sales. Your cost of sales will include the following:

                                                      i.        lab costs

                                                     ii.        imaging/processing/storage media

                                                    iii.        editing and retouching costs

                                                    iv.        production employee costs including taxes and benefits

                                                     v.        contract labor

                                                    vi.        shipping costs

                                                   vii.        frames/album/accessories /packaging

                                                  viii.        merchant credit card fees

                                                    ix.        job-specific costs

                                                     x.        commissions

                                         ii.    Is your goal at or below the benchmark recommendation of 25%?

                                        iii.    If it's above 25%, revisit your pricing by assessing what you are selling versus the cost associated to produce. Look into the multiple PPAedu offerings on pricing to see what adjustments you need to make.

b.     Overhead assessment

                                          i.    Divide your total fixed costs, basically your remaining costs, by total sales.

                                         ii.    The goal is at or below 30% for home studios and 40% for retail studios.

                                        iii.    If you are above the recommendations of the benchmark survey, review your costs and look for ways to lower them. Ultimately, you might need to revisit your sales goals to increase your sales average and as a result overall total sales.

5). Assess your marketing efforts by product line

a.     What worked

                                          i.    Did it generate the desired number of targeted sessions and did they spend they generate the desired sales average?

b.     What didn't work

                                          i.    Was the ROI of time and/or money adequate to achieve the overall goals of the product line?

c.     What needs to change in 2015

                                          i.    Using a grid system helps you manage your marketing efforts.

                                         ii.    Reducing your grid to a calendar helps assure you that your marketing efforts are implemented in a timely manner.

6). Evaluate your sales strategy

a.      What worked

                                          i.    Did it generate the sales average goal?

b.     What didn't work

                                          i.    Assess the overall sales script to determine if any changes need to be made.

                                         ii.    Consider new product development to help increase the sales average.

c.     What needs to change in 2015

                                          i.    Update the sales strategy

1.     Update your price list.

2.     Revise your sales script.

Taking these 6 financial management steps is guaranteed to change your business. Seriously. What's your New Year's resolution... more of the same? I challenge you to step outside the box and take your business to the next level and Be More Profitable!

jacksonbridget_blog.jpgAbout the author: 
Bridget Jackson is a Certified Public Accountant (CPA) and PPA Business manager. Over the years, Bridget has helped hundreds of photography studios become more profitable. 

About this Entry

This page contains a single entry by Professional Photographers of America (PPA) published on December 17, 2014 8:25 PM.

Peter Lik's Record-Setting Photograph, Astronaut Photography and Dramatic Lighting: Top Blog Posts 12/8 - 12/12 was the previous entry in this blog.

Behind the Camera with PPA Photographer, Sharma Ferrugia is the next entry in this blog.

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