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PPA Business Advice - PPA Today

PPA Business Advice

with Bridget Jackson, CPA and PPA Business manager

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!

Is your bookkeeping up to date? 

It's important to stay on top of this small but crucial task. It means not only entering your income and expenses but also reconciling them to your bank and credit card statements. Remember, the key to your success is in the numbers. Both keeping your financial records up to date and interpreting your numbers on a consistent basis are critical to running a successful business. 

All too often studios don't know that business is down or that they aren't meeting their financial goals until their cash account is impacted or they quite literally run out of money. Don't let it happen to you!

Do you have a clear idea of where your income is coming from? 

In other words, do you have a clear picture of what products your clients are buying and which product lines are profitable? It is vital to your financial success to know the answers to these questions. For example, you may choose to raise the price of a product everyone is buying to make it more profitable. You might also consider eliminating a product line or not offering certain products if they're not helping you achieve the financial results that you need to reach your goals. Your marketing plan and sales strategy are a direct result of this assessment. You need to know who your ideal client is, what they like to buy and then determine what your sales average needs to be for a given number of sessions. 

How can you clearly understand who you are marketing to and what they are buying if you aren't clear on the current number of sessions you are photographing by product line and your average sale for each? This is another huge reason to keep your financial records up to date.

Do you know how your business compares to the Benchmark? 

PPA's Benchmark provides you guidelines for running a successful business. If you keep your cost of sales and overhead percentages within the guidelines, you are guaranteed to make more money. 

Even better, set your goals higher by following the Top Performing Studios' guidelines you'll find in the Benchmark resources. PPA works with high-performing studios that achieve 60-65% bottom line percentages. You should know how your bottom line measures up against them every month! 

If you're using financial software it will be easy to analyze this data but the key is keeping it up to date. Every year a studio should look back at where they have been and then set goals for where they want to be. Studios that do annual goal setting have a better chance of meeting their goals than studios that don't. 

By staying on top of your numbers and consistently understanding how your current state analysis compares to your goals, you can quickly make the necessary adjustments that will move you to the next level. Making adjustments to overall spending, assessing the return on investment (ROI) of marketing dollars and tracking sales averages by product line are just a few more things that make a good studio great.


About this Entry

This page contains a single entry by Professional Photographers of America (PPA) published on May 27, 2014 4:43 PM.

Our 10 Favorite Photography Posts from the Week of 5/18 was the previous entry in this blog.

Skinning Onions, The Law of Jante and a Privacy Clause is the next entry in this blog.

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