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Correcting Financial Management Transgressions: Part Two - PPA Today

Correcting Financial Management Transgressions: Part Two

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Last week, we looked at two of the cardinal sins photographers often commit: ignoring their numbers--or, more aptly, running away from an encounter with their numbers--and failing to plan. This week, we continue the crusade to help you overcome the "7 Deadly Sins of Financial Management," starting with your state of mind.

#3:  Failing to Think Like What You Are--A Small Business
Salem, Ore., photographer and Studio Management Services (SMS) instructor Eric Anundi calls it the "artist mentality." He says that before he started using managerial financial concepts and planning in his business, he had the mindset of an artist, not a businessperson. 

"Now wait," you say. "What's wrong with thinking like an artist?" It's not that thinking like an artist is wrong; it's failing to realize that your art is a business. As we often say, if you can't make money, your images will look awesome...hanging in your basement.

"Oftentimes, our members don't make direct correlations between the money they're spending and how those expenditures affect the bottom line," says Scott Kurkian, PPA chief financial officer and founder of SMS, PPA's business and financial management practice for photographers. "We spend money on products and equipment because we believe they'll help us make better images--and maybe they will--but you have to plan for those expenditures and ensure that, while they're improving your art, they're not breaking the bank."

Common Sense Business Principles

Anundi says that it might seem obvious, but more often than not, "photographers don't place enough value on common sense business principles."

 
For instance, Kurkian points out that photographers love to study the habits and techniques of great artists. But when was the last time you studied a successful businessperson? "We have to force ourselves to look outside our areas of proficiency and passion and seek out the habits and knowledge of successful businesspeople," he explains. 

There are many ways to get started, like networking and reading blogs and books. A simple search on Amazon.com will turn up dozens of books from successful entrepreneurs and mentors. And you can look around your area for small-business people who are successful and network with them. Don't forget to look for a PPA mentor who is running a highly profitable studio. Imaging USA classes are great places to start that kind of search because you'll find many successful entrepreneurs there who also happen to be talented artists. Most are happy to share information, or even spend some time with you and your balance sheets to offer suggestions. 

"Building financial and marketing plans, measuring historical financial results (and using that information to improve year over year), comparing performance to industry benchmarks, and continually measuring and refining product lines based on what sells," says Kurkian, "are all tasks that small-business owners perform as a given. But as artists, we often operate without these business basics."

And while being the next Donald Trump may not be at the top of your list of self-actualization goals, a healthy business can help you find balance in your life in many other ways. (And it will certainly lower the stress levels!) 

"Before SMS, I had no goals or budget. I thought that I just had to spend as needed to make the business work. I now see where I am spending too much and where I need to spend more," says Carla Nelms, M.Photog.Cr., of Midlothian, Va. "It's like having my best friend in the front seat to guide me to where I need to go."

#4:  Going It Alone (without a financial advisor or peer group to discuss financial results and ideas for improving profitability and efficiency)
The view is always different from the outside looking in. That's why peers and mentors are so helpful to a small-business person. Your peer group, advisors and mentors can see the forest.

"Having an outside set of eyes on your business can uncover issues you're not seeing, but just as importantly, they can provide assurances and confirm things you're doing well," explains Kurkian. "SMS has provided this kind of feedback and accountability for photography businesses for almost 10 years, and we've seen so many amazing things happen in peer groups and mentoring relationships."

"The greatest part is the advice they give," says SMS participant Amber McAdoo, CPP, of Benton, Ark.  "They know how they solved their problems and how to help solve yours. Currently, Julia Woods is my mentor...and she is amazing. Not only does she give business advice, but she is great to talk to about life in general. Whatever I am going through in my life, she has been there, done that."

Mentor Magic:  Finding the Perfect Relationship
If you haven't already, consider attending an SMS class, where you'll work with SMS mentors and have opportunities to develop peer groups with photographers whose businesses are of a similar age and stage. You can make your money do double duty by attending an SMS pre-convention session at Imaging USA in January and then staying for the main event, where you'll have the chance to network with thousands of other photographers.

Local organizations and affiliates are also fertile grounds for finding mentors and peer groups, as is the OurPPA forum. And don't forget to check out the September edition of "PPA Today" in Professional Photographer magazine--you'll find a mentoring article there with more ideas and suggestions from several PPA members.

"For me personally, mentors are vital," adds McAdoo. "I am in this business alone, so it gives me a chance to talk shop with someone who understands exactly what I am going through."

Change Your Mind
Finally, Kurkian says, it all boils down to your mindset. "When people ask you what you do for a living, do you say that you're a photographer, or that you're an entrepreneur who happens to be a photographer?  The core of how you think of yourself will dictate how you approach each day, and that will have a huge impact on the financial potential of your business." 

Next week, we'll shine the light on more misguided misdeeds, including attempting to attack too many areas of improvement at once and straying too far from your core competencies.

In the Meantime...
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!


About this Entry

This page contains a single entry by Professional Photographers of America (PPA) published on August 24, 2010 6:11 PM.

Super Monday Instructors: Bring Images Back to Life with Karen Walker was the previous entry in this blog.

To Win, You Gotta Play is the next entry in this blog.

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