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7 Questions to Ask Before You Start a Business
Most people think that the barrier to entering the photography business is low. All you need is to buy a camera, create a Facebook page, and start taking pictures. But consider the odds: 25 percent of new business start-ups close in the first year, and another 25 percent fail in the next four years. How do you beat the odds? You have to set your business up to succeed by asking and answering the following critical questions:
1). What products and services will you provide?
Your business plan should clearly define what you are offering in terms of products and services and how that compares to competitors in your market. It is important for you to carve out a piece of the market to make a profitable and sustainable business.
2). Who is your target client and how will you reach them?
In other words, it's not only important to identify your target client, but you also need to reach them through different marketing mediums. Your integrated marketing strategy should include a blend of marketing mediums such as print, digital and interactive and social media. The results of these efforts should determine if you have an adequate population of potential customers to reach your sales goals.
3). How does your business stand out?
Your one unique selling proposition is YOU. It's who you are that makes all the difference. It's the reason that the one product or service you provide is different from and better than that of the competition. This is where you need to shine through your art, product offerings and customer service. You must be distinguishably different from your competition.
4). Where will business be conducted, and how many employees will you need to provide the level of customer service your ideal client will expect?
It's important for your physical presence, the way you present yourself, where you conduct business and how you conduct business to be an extension of your brand and should resonate with your ideal client. Initially, the number of employees you need to deliver the level of customer service you want to project might not be ideal, but don't compromise. Find ways to outsource workflow in seasonal times so customer service isn't neglected.
5). How much start-up money will it take to open the doors and keep them open until you turn a profit?
I mentioned the barrier to a photography business is relatively low; however, after answering the first four questions, I'm confident you have realized that the barrier is misleading. It requires an investment of money and time to set up a photography business to achieve profitability. Prepare a conservative five-year projection of income and expenses, and re-evaluate yearly to confirm you are on track as most businesses are to show a profit in the in the first year of business.
6). What will be the source of the funds needed for start-up and sustainability?
Consider how much you are willing to invest and potentially lose, how much is needed from outside sources and how much you can generate in profits to reinvest in the business. Clearly identify these sources and include in your five-year projection a plan to pay back yourself and anyone else.
7). What type of business structure will you choose?
What forms do you need to file, and which licenses do you need to obtain to assure compliance? The type of business structure you have will depend on two factors: liability and taxation. PPA recommends when you are just starting out and you have substantial personal assets to be a LLC.
Your business can also benefit from business advisors and mentors. You should develop relationships with a banker, an accountant and an attorney before you start. Additionally, as a PPA member, you can get malpractice insurance, up to $15,000 of free equipment insurance, free education, connections to industry mentors, certification and other vital resources to help you run a profitable business. The Benchmark Survey and its principles are also helpful when setting up prices and measuring your business' growth.
There are no assurances that a business will succeed, let alone be profitable, but setting yourself up for success through planning certainly can help.
It's a shameless plug, but after all, we're here to help: Join instructor Jen Basford, Cr.Photog., November 15-16 in Atlanta for PPA's Business Basics Workshop. You'll learn strong business principles that will help you create a solid foundation for your business. The class will give you the information and confidence you need as you plan for a profitable and sustainable business.
What's more, when you register you get an additional virtual seat to share with anyone in your studio. More learning, not more spending! And you'll get all of the downloadable materials and the bonus of being able to (re)play the workshop back to pick up on things you may have missed.
There's always plenty going on here at PPA. So how about a monthly blog to keep you up to date?
At the start of each month, we'll give you an update on what workshops and live webinars are coming up! There's no excuse to miss out now!
Without further ado, let's take a look.
PPAedu's live webinars are offered FREE to members and non-members alike, but only available on-demand to PPA professional active members and PPAedu subscribers.
Here are this month's live webinars:
November 12, 2 p.m. ET
Learn strategies that can potentially lower your taxes and more with THE expert--PPA's resident CPA, Bridget Jackson!
November 19, 2 p.m. ET
Don't miss part four of SEO expert Brett Snyder's series on... you guessed it... SEO! Read our blog post from last week for more info.
look out for part 5 in early December!
December 3, 2 p.m. ET
And make arrangements for PPA's upcoming workshops!
PPA's Studio Management Services are hosting a few workshops at Imaging USA in Phoenix to help you be more in 2014. If you really want to get the most out of your Imaging experience, head out a few days early for these great pre-convention workshops!
Thursday - Saturday 9 a.m. - 5 p.m.
with Carrie Wildes, CPP & Allison Tyler Jones
Register for Business Breakthroughs and we'll throw in a FULL Imaging USA registration for free! Don't miss out on this exclusive deal to get a comprehensive and intimate workshop on your business followed by three days of Imaging USA to give you all the inspiration you need to put your new business plan to action!
And TWO Certification Prep Classes
With Gary Meek, M.Photog.Cr., CPP, API, A- ASP, EA-ASP
& Kathy Meek, M.Photog.Cr., CPP, API
with Al Audleman, M.Photog.Cr., CPP, API
Friday - Saturday 9 a.m. - 5 p.m.
PPA is also offering two SMS Business Basics workshops in Phoenix.
$379 $279 (Save $100!)
with Ann Monteith, M.Photog.Cr.Hon.M.Photog., CPP, ABI, API, A-ASP
$379 $279 (Save $100!)
with Carrie Wildes, CPP
These experts and PPA's Benchmark Survey will help you understand your numbers and be more profitable in 2014!