Showing posts with label tips for starting a photography business. Show all posts
Showing posts with label tips for starting a photography business. Show all posts

Friday, 30 December 2011

How to Set Your Pricing and Generate Profits - The question on many photographer's minds

Pricing your photos is one of the greatest hurdles for photographers looking to turn their passion into a business. We are often insecure at this point in our personal photographic growth and may not believe we are as good as others believe... so how could we ever believe people would pay good money for our images?

It can be especially nerve wracking when a client asks you why they have to pay so much for your photos and services. Especially if you have not done your homework and you just stole some pricing from some other local photographer’s website as a quick fix.

You HAVE to understand that you are now a small business owner, you have to separate personal feelings and let go of the personal connection with your images, then charge a fee where you are generating a profit margin. You need to calculate and understand what you are charging; and be confident that you are worth what you are charging.

You see, you need to not only know the worth of the services you are providing, but you need to know how to articulate what you’re worth and why you’re worth it. Make sure you’re equally versed in the business practices as you are in your photography skills. If your images are of a certain quality and you have the confidence to negotiate the value proposition of your company with confidence, you give your client confidence as well.

The following should provoke some thought and give you some ideas on how to better price your images and services and generate a profit.

Know What You are Worth

Before we go any farther... you have to know and believe what you are worth.

Scenario #1... This is your full time job
The first step is to do your research and find out what the competition is charging for what they are offering. This will give you some confidence at coming up with your own prices. But do not just cut and paste their pricing. People do not only buy on price alone... they buy relationships and value.

The first step you could do to determine what you are worth is by calculating your Cost of Doing Business (CODB). Your CODB is what it takes at the end of every month for you pay your bills. Be realistic here, you’re likely not going to be bringing in a lot of money during your first few years of business.

You could reach your CODB by a few simple calculations. Take all the expenses you need to run a business for the month – website hosting fees, insurance, rent, insurance, food, travel etc., add a salary, and then divide that figure by the number of jobs or images you think you’ll book or sell during any given month. Keeping in mind that you may have to lower your salary or overhead in order to achieve new business.

Scenario #2... You have a full time job and you are also in the development phase of building a photography business
I have a full time job that I love doing at this point. But I am also a nature photographer by heart and sell my images and run workshops for people of all levels looking to be better photographers or need help growing their business.

When I first started out I would determine that an image will be for sale, I took into account what it cost me to take a specific image. For example, I drove 50 miles, slept over at a hotel, had breakfast and dinner and came home with a couple hundred images. It took me one hour of editing time, and the result, I have one image I deem good enough to sell. So my hard costs were:
$25 in gas,
$15 in food
$75 in hotel accommodation,
$40 for my one hour of editing time
Total hard costs to produce image was $155.

I then determined that i will sell this image no less than 10x. That leaves a hard cost of $15.50 per image sold before I print. I then add a cost to print which could be $75 for a canvas print. That leaves $90.50 as my hard cost to produce the finished print. On top of that I always ad $50 for my profit and that leaves the price of that particular image at $140.50. A few different variables may come into play with lowering my hard costs, things like, I did not stay overnight, I came away with two images that I could sell... you get the point.

Now that I have been doing this for a few years and I can now average my prices by size and know I am generating enough profit for every image I sell. I also use a formula that determines ROI from my marketing efforts and you can read that in my blog posting about converting clients using social media.

For my workshops I simply charge what I believe my time is worth. I offer three different types of workshops. The first a quick one hour camera tutorial for people that just received their camera as a gift and want to know what the camera does.

The second is a four hour workshop where i give a price break on my time for multiple hours, but maintain a decent profit margin based on my experience and tenure.

The third type of workshop is a mentor program. I know how many hours it takes to be a mentor and I price it out based on hours spent with each client.

For any workshop I can justify the expense by the added value that I offer and the quality of my own work. As I do more workshops and my images elevate to another level, I will increase my price and be able to justify it easily.

How to Articulate Your Worth

Now that I gave you some sort of idea on how to charge for your images and services. The next thing you have to be able to do is to be able to articulate why you charge what you charge. A good way to do this is to create marketing materials that can be described as a “sales pitch”. It is simply a page of the features and benefits of doing business with you. This is the “why are you worth it” document.

A good example of this is the following... I have been to Paris six times in my life. I have stayed in 4 different districts and know people that live in the city. I know what time of year is good to visit certain attractions and how to get deals in order to get into a maximum amount of venues for anyone attending a photography workshop in Paris. I also know where to stand to get better images and what times of the day work best for specific attractions.

Is that not more appealing to a potential client than simply going on a Parisian photography workshop with another photographer that does not know the city like I do? I offer a lot of extra value by coming with me.

Another good way to get the price you want from a client and subsequent referrals is to under promise, over deliver. I’m not telling you to down play what you bring to the table and definately not exaggerate what you can do for a client. Negativity can spread like wild fire. Just go the extra mile to really deliver on your promises – you’ll not only create a happy client, but the referrals will already come to you sold on your services.

Here is a real world example of mastering this art form. I sold two images to a gentleman and he paid me the price that I was asking. I also had a third image from the same series of images he wanted. Understanding that the images were for his father for X-Mas, I sent him a third image in digital format as added value. He had to print the third image, but he got more bang for his dollar by buying the images from me than he would have if he bought from anyone else.

Listen to Your Clients and Watch For Buying Signals

OK, so now you know your worth, you’re prepared to articulate it with confidence, and now it’s time to discuss the importance of listening to what clients are telling you. This is important step in being able to adapt your photos and services to your clients’ needs.

Every client may be different, so you need to be able to adjust your offerings. Especially today in a very competitive market. Your clients know more today than they ever had, and even some may be amateur photographers that have their own opinions.

You also need to understand buying signals... watch for the body language and not so much their words. People are conditioned not to say “no” when you are sitting down with them. People generally hate confrontation. You may walk away from a client meeting and think you sold them, when really, they just didn’t say “no” to your face and save it for a phone call of email when you follow up.

You have to learn to recognize the hidden signals and not just the verbal ones. If you’ve got a client leaning forward, engaged in what you are showing them and nodding a lot while you’re talking, chances are you’ve sold them. If you find them leaning backwards in their chair, hands crossed ... or even taking phone calls, chances are they are just going through the motions with you.

Engage them, ask questions, overcome objections and ask for feedback. God gave you two ears and a mouth for a reason, listen twice as much as you are talking when selling a client... If you give them what they want and can agree on a price... then show them how you are going to over deliver on what was discussed. I guarantee your chances of success will increase.

Last, ask for the order. Never be afraid to ask the client for their business more than once. If you don’t ask, you are never going to get!

Say it Ain’t So...

Yep, sometimes you are going to have to walk away from a client. You will have clients that want everything for nothing

It’s never fun to have to know that you walked away from work. It goes back to those inner thoughts, “Am I good enough to be charging this?”

If you are this far, than I would say you are good enough, and you should walk away. Unless of course there are strategic reasons to do something for little money, or business is so bad you have to take it.

Compromising on price is a slippery slope. If you discount too much, people will find out about it and the next client that walks through the door will come expecting a discount instead of seeing the value in what you offer. Why, cause the referral they got was that you were talented and your prices are inexpensive.

What I offer here are guidelines and examples... food for thought if you will... The lessons here are... (1) to know what you are worth, (2) be able to defend it, (3) give value and be smart about what clients you do take.

I wish you all luck in your own photography business. If there is any way I can help, please contact me through my website here.

Good luck in 2012, and I thank you for all your continued support over the past year,

Kevin

Friday, 18 November 2011

So you want to start a photography business...

Whether you are a talented amateur photographer, or have a great deal of experience working professionally, starting your own photography business demands that you make important choices about the market segments you will serve, and how you sill serve them. These choices will determine what kind of operations you must develop and how to direct your marketing and the services you will offer clients. As I will explain later, it is increasingly difficult to cover all types of photographic work due to the competition from specialists and other external factors, so do your homework on what your business should be...

You should also keep in mind that because of modern technology in the form of DSLR cameras, you do not even need the room for a dark room. You need only to have a personal computer and a photo-editing program. The standard is Adobe Photoshop. There is no need to clutter yourself with equipment you do not need; you can rent equipment when you need it. You even have the freedom to work part time until you can devote yourself full time to photography. All you need to be is a serious photographer and a dedicated business person.

While the technical skills needed to make a successful photographer have never been easier, other aspects have changed our business. The market for photographs of virtually every type has widened, the world seems to have an insatiable appetite for photographs. However the price has fallen as the marketing net has broadened. Sites like shutterstock have sliced into our profits like a hot knife through butter. The good news is, photographers are needed in many more fields. For instance many people now, mor ethan ever, remember special occasions with photographs and more people are taking photos of their kids, and as the number of people that own cameras increases.

Another way to generate an income is to teach photography. With the growing number of amateur photographers out there, the need for people to run workshops and teach photography is also growing. In my opinion, it seems to be recession proof. Photography is an escape, and during a recession people need an escape more than ever. They will therefore find the money to invest in themselves. Taking photos that one can be proud of does wonders for a person’s ego! And while the economy and investments twist in the wind, who doesn’t want to give themselves an ego boost.

So you see, it can now easier than ever to turn your dream into reality and create a worthwhile business out of an engrossing passion. However in today’s modern world there is more to than simply pointing a camera and shooting a picture. You need to be aware of marketing techniques, and here marketing simply means growing the potential of transferring ownership of a product, in this case an image from a buyer to seller. You also need to be aware of any local gaps in the market in your local area, understand the power of the internet and know your competition. You should try to always be aware of your competitor’s prices. To undercut an existing photographer is one choice, but to neglect to value your skills and not charge enough to cover your overheads is another matter entirely. Remember this, it’s an important point. Reduction in price to gain business is a slippery slope. Sell your value to justify your competitive price.

Writing a business plan is a great place to start. It helps to keep you focused on the areas you specifically want to exploit. A business plan helps you to define your goals and strategies, it will be changed and updated, but it will help you to keep things in perspective and keep you focused. You should always refer back to it when things become confusing or complicated. Everyone’s business plan will be different, as every objective will be different, but there are certain common factors that make up a good business plan which will help your business grow. It allows you to develop a professional attitude to your business, which not only helps you to increase your earnings, but also help you to finance your business when needed.

For the photographer a business plan should include your business name, or your own, with full details of the proposed location of the business, a copy of your logo, as well as details of your copyright notices. You should also consider what is the form of your proposed business is going to be (sole ownership, partnership, Limited Liability Company or Corporation). This should be followed by a table of contents, which focuses on a logical order. Included after this should be the type of business you intend to pursue, in a fair amount of detail, and it should contain the services you intend to offer. This section should include any future goals or avenues you would like to explore, stating your clear objectives. This is so you can check at a later date whether your objectives are on course, or if you have got sidetracked. If you envision at any time you may need financial help, then you should include your personal business history to show how viable you are as a business person.

You should also state a clear and concise marketing plan that should demonstrate how your business will differentiate from the businesses of your competitors. You should be able to establish who your customers will be, how large the potential market is, as well as where your market will be, as in wholesale or retail or a combination of both. You should also be able to determine how long this type of market will be available to yourself.

The next section should clearly define your opposition, as well as their strengths and weaknesses. This should include the ways you may be able to exploit any gaps in the market in the specific area where you live. A section should follow this on how you intend to market and promote your individual services. This is called a SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. You should apply this to your business and your competitors.

A financial segment should be included as to how you intend to manage the day-to-day bills of the business. How you intend to price your services, and what factors influence this pricing structure, which includes a section on your competitor’s financial structures. This means a fair amount of detective work as well as homework. Get your friends to ask from quotes from the local competition. Or try an even more direct approach, tell your competitor’s that you intend to start a new business, and that you do not want to undercut them, as this reduces the cake for everyone. They may well offer to help you construct a pricing structure that ensures everyone’s livelihood. It is in their interests to help. Not everyone will be cooperative, but it may mean you can get a truer picture of the market factors that govern your area.

Make a list of all the equipment you will need in your first year, as well as how and where you intend to purchase. Note any difficulties that may arise in obtaining your supplies. Note whether the prices of your supplies have a seasonal fluctuation, which may help you influence you when to buy. You should make a note of any local licenses that will be necessary, as well as any zoning restrictions that may restrict the growth of your business. You should also conduct a study of all your business insurance requirements.

The final segment should be devoted to how you intend to finance the growth of your business, as well as isolating what your financial needs will be. This should include a projection on your future earnings, as well as an accurate assessment of your outgoings. This should be assessed on a monthly basis for the first year and on an annual basis for the following three to five years. An important aspect of the financial statement is an assessment of the break-even point of your business, in other words the minimum you will have to take to pay your expenses.

Financing your photography business can come in many forms. There are numerous small business loan avenues through local and federal government agencies and there is the route of a business/personal loan or line of credit. You can also build the business slowly, rent equipment as you need, use your own money and credit and build the equity over time.

You can also approach government agencies and companies to sponsor specific initiatives. If you are a landscape or nature photographer, maybe there are local and national dollars available to sponsor a book etc.

The opportunities for aquiring money is out there, its just not easy to aquire. If it was easy, everyoen would be getting it. My advice, believe in yourself and your abilities, dig hard and talk to everyone. You will find the money if you are passionate enough and believe in your abilities.

Once all this has been done, take action. Planning is important. But planning isn’t enough. You have to take action on your plans and put them into place. Follow through and make sure your business is always moving forward.

Good Luck,

Kev

Friday, 4 November 2011

Starting your own photography business by creating a BRAND around your name

I was talking to one photographer that other day that basically said that starting a photography business was as easy as buying a camera, renting studio space and then taking bookings from the lines of people hoping that you’ll take their photograph. I asked him how his customers are going to find him and his response was, “I know I am a good photographer and I will just buy keywords on Google.”

Another landscape photographer went into this long dissertation that he was going to apply to be sponsored by a manufacturer, travel the world taking images and sell them to companies in the tourism industry. When I asked this person how he was going to be sponsored, his response, “I know a guy at Nikon and he said he will make an introduction. “

While both goals are admirable, it really is not that easy, never has been, and definitely never will be. As I am sure some of you who are reading this know by now.

So, what is the secret sauce in building a photography business? For me it’s about “branding you, the person” properly. Of course there is the creation of the marketing plans, price sheets, a portfolio, website, joining associations and also networking. Those are the must have’s… you can learn about how to do those on any number of sites. What I want to discuss here is separating your “BRAND” from the hoards of competition out there.

There have been a lot of very talented photographers that have failed in this business; conversely, there are some successful photography businesses that succeeded even though they were not top notch photographers. The difference is that the successful photography business was run by a much more efficient marketer and business person.

Don’t get me wrong, you still need talent, you need to be schooled and you need to invest heavily in this passion. Someone once told me that you need to take more than 25,000 photos before you have learned the basics, another 25,000 to get proficient at taking a quality photo, and another 25,000 to get to the level where you can call yourself an accomplished photographer. I laughed when I heard it, 75,000 photos… “Come On”… but I counted the images on my external hard drives the other day. It was cause for another laugh… “that ole fella knew what he was talking about”, I thought.

I have taken more than 80,000 images and you can see the progression as the years have gone buy. It’s not the number of photographs; it’s the practice and repetition that crafted my skills.

OK, back to the separation of photography skills and business skills. My advice… put your ego and photography aptitude on the shelf for a minute… Let’s discuss business building skills and how to separate the business you from the photographer in you. How we are going to accomplish this is by creating an approachable brand around your name.

The more you give, the more you will receive
Ohhhhhh how I firmly believe this is pinnacle to your long term success. This theme is in almost all my points here. I am a firm believer in giving of your time and products to create long term sustainable relationships that will help you in the long run. A little goodwill now will pay off in the long run.

Be the recognized expert
Be the person that people know they can come to for answers or ideas. If people start associating you with a genre of photography you will create that top of mind awareness you need… then when they think of a photographer when they want to spend money, you will come to mind first. This isn’t about always being selling… this is about always being helpful, a long term business strategy

Learn from the best
Look at a couple successful photographers. Find out how they got to where they are today… don’t be afraid to ask them. They will give you at least some guidance.

Emulate success; don’t try to reinvent the wheel here… this has been attempted many, MANY times before you, if there was a better way, it would have been tried already… so emulate the people who carved out the path.

Press the flesh
Get out there and meet people, and when you do, give them your business card. When you put a face to a company name it will go a long way and making people remember you.

Let them see you everywhere
Here are some ideas to help you get your work out there… (1) go to local coffee shops and find out the process to hang your images in their coffee shops, (2) go see local banks and offer to hang images of the local area in the local branches, (3) investigate local art tours where people go and visit homes or galleries to see local artists, (4) give away images to friends and family to hang in their homes.

To get yourself out there, (1) you can join local photo clubs to network with other local photographers and find out other ways to help you grow your business, (2) get involved with charities and offer to take portraits for the less fortunate before X-Mas, (3) offer your services to the local government or heritage committees for free.

Social marketing is all about relationships built on trust
Facebook, Google+, Twitter, each are online social marketing tools. But they are not a place for hard selling of your product or services. They are a social community where people go to have fun and they do not want to be sold when they are there. These places are an avenue for you to just put your services and products out there for people to see. If people have all the information of your services and products, see that you are personable and available, and your products and services are what they want, they will come to you.

To sell your products and services online use keyword buys on the search engines to target potential customers searching for your products or services. Your website is for this as well. The website is your number one tool, IMO, to attract the maximum amount of clients. It is your online business card. The more people you drive to it, the more successful you will be. It’s a numbers game.

Social networking sites also offer excellent search engine optimization advancements for your website… something you should become intimate with. (Lots to discuss in this area but its a blog entry into itself)

Persistence Wears Resistance
Never give up. You will put in a lot of work, give away a lot of free photos and offer a lot of advice before this pays off… but it will. One day the flood gates will open up and you will look back and be thankful all this hard work was done.

This is where people fall down. They don’t see the immediate payoff. So just be patient.

I am not saying that this is all you have to do… far from it. What I am talking about is the icing on the cake. You still need a traditional and online marketing plan, a sales plan, talk to the banks, create a business identity, create the right website, price your images and services properly… and, of course, always be growing as a great photographer.

What I covered here are just the extra things that will separate you from the others that think that this is easy. Remember what the guy said in the first paragraph? He said, “I know I am a good photographer and I will just buy keywords on Google.”

I know if you follow my advice you will be one of those photographers that this guy looks at while he scratches his head wondering where he went wrong.

Good luck,

Kev