Say hello to your newest guest column! It comes to you from none other than Bridget Jackson, resident guru for all things numbers and profitability. Bridget is the manager of PPA Business and also a CPA. She's helped hundreds of photography studios be more profitable and will address some common questions each month. Heed her advice folks--this lady knows her stuff!
What do all entrepreneurs need to know?
By Bridget Jackson, CPA
This is a question I receive frequently, and see it all over the place on other sources of photography advice. Some of it is good, but some, well, you know...
I've read through multiple columns on what it takes to be an entrepreneur, and here I present you an abbreviated list of often-overlooked qualifications. It's not a be-all-end-all list by any means, but these are some takeaways that seem relative in light of the fact that I am a numbers person and a consumer.
1). If you don't know your numbers and how to read them, you've got one foot in the proverbial grave of a failed business.
That might seem harsh, but did you know that according to the Small Business Administration (SBA), only 2/3 of small businesses survive two years? The reason they flop is poor accounting.
Let me take that one step further and say that it's not enough to have your tax return prepared once a year. You have to understand what your numbers mean.
PPA is here to help you understand the principles of sound financial management, and it starts with managerial accounting. PPA provides resources to members to help you implement, understand and manage your business based on these principles. If you are not practicing, I encourage you to follow in the footsteps of what many successful studios have done before you and embrace managerial accounting today.
An added benefit of visiting the Benchmark Resources is participating in the current survey. Not only will you feel an overwhelming sense of community knowing that you contributed to the only industry-wide financial survey, but that you helped shape the results of the survey. PPA will release preliminary numbers at Imaging USA 2015.
2). Company culture drives a successful business
As the boss it is your job to define, provide the resources and participate in the implementation of your company's culture. Businesses that succeed in this area have an increase in overall employee satisfaction and retention.
For those of you who don't have employees; don't feel left out. I have one for you too!
2A). As the sole employee of your studio, you need to be prepared to "take out the trash."
That's right, although you won't have a boss to answer to, you will be left with the potentially unwanted tasks of answering the phones, cleaning, etc. So prepare yourself mentally for these roles. It's up to you to take care of the dirty work too!
3). Know your competition and treat them with respect.
Just because someone is a photographer doesn't mean they are your competition. Continue to evolve yourself as an artist by entering print competitions and by continuing to update your product offerings. Cultivate a professional relationship and level of respect among your peers. Their opinion of you and your business often outweighs others. As a consumer, negative comments by one entrepreneur about another actually have detrimental effects on the business owner making the comments. One way to rise above is to become an industry expert in your market and lead by example.
Of course, it takes much more than this to create a successful business. But taking these small steps can make a huge difference along the way!