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When starting your photography business it’s easy to get caught up in how good your portfolio looks, buying new equipment, or how many followers you have on social media. While these tasks are important, you risk overlooking some crucial numbers that will help you to hold yourself accountable and succeed as a result.
Large corporations have whole departments tracking data to help their CEO’s make better business decisions. So why is this completely overlooked in one-person businesses?
In this article you will learn the Five not-so-obvious mistakes photographers make when starting a business. I will also give you some handy tips on how you can avoid these mistakes in the future.
One of the most common mistakes you can make as a freelance photographer is not setting any targets around how much money you want to make. I think we can all agree that it is an amazing feeling to be able to earn enough money to support yourself.
An effective way to grow your income is to first be aware of how much you’re currently earning so that you can figure out how much you want to earn in the future. Have a good solid brainstorming session about the next 12 months and really ask yourself, “How much do I want to realistically earn this year?”
Making a million dollars a year photographing would be fantastic, but you have to be realistic about your financial goals. You don’t want to set a figure that is so high that you feel discouraged. You also don’t want to set a figure that undervalues your talent. You want to choose a figure that makes you feel a little stretched but is still achievable with some hard work.
A good place to start is to look at how much income you made in the last year, and then add 30% on top of this amount to calculate how much you’d like to make in the next year. For example, if you earned $15,000 last year, your goal this year should be $19,500 ($15,000 x 1.3).
If you don’t have any income records from last year, just choose a figure that you feel comfortable with, and that is attainable.
After you’ve worked out your target income for the year, the next thing to do is calculate your average fee. You can calculate this by dividing your total income by the number of sales (clients) you had over the last year.
So now that we know what your target income and average fee is, we can move on to calculate the number of photo sessions required to reach your target income goal.
The number of sessions that you need to do in the next 12 months is dependent on your target income and average fee. For example, to make $20,000, you will need to do 40 sessions within the next 12 months to reach your income goals. This is calculated by dividing your income goal of $20,000 by your average fee, which in this example is $500.
Your required number of sessions may feel daunting at first. It’s important to break it down into smaller increments so that you can visualize these amounts so it appears more attainable, so 40 sessions for the year turns into 3.3 sessions per month. This is calculated by dividing 40 sessions by 12 months.
When you’re setting your income goal, think about how much time you want to take off for the year. You need to give yourself leeway for traveling, illness, recovery, planning and so forth. Just because you’re a business owner doesn’t mean you don’t need
to have time off like the rest of the world.
Going back to the example, the number of sessions required is 3.3 per month. Let’s round this down to three sessions to make things cleaner. This means you need to do 0.75 sessions per week.
If you’re not comfortable with the volume, you could tweak your targets. For example, if you were to get more skilled at charging higher fees, we could set your average fee to $1000 instead of $500. How would this impact your volume? Well $20,000 divided by $1000 is 20. That’s 20 less photo sessions you have to do for the year, which equals out to just 1.6 sessions per month or only one photo session every couple of weeks.
So the next question is, should you focus on doing more sessions, or should you learn how to effectively increase your fees? The choice is ultimately up to you, but this example illustrates the importance of knowing your numbers so you can make the necessary adjustments in your business that will help you succeed.
Inquiries are the first point of contact you have with potential clients. Your main goal when you receive an inquiry is to convert it into a booking.
Measuring the number of required inquiries in your photography business can be a little challenging as some of the people that contact you initially don’t end up booking for various reasons. So as a rule of thumb I like to use a 50% conversion rate. This means that to get three bookings for the month, you need to get at least six inquiries.
As you can see, generating inquiries is easily one of the most important steps in the sales process. When it comes down to it, if you want to achieve your goal of $20,000, you need to generate six inquiries per month with an average fee of $500. Once again, you will only know this if you are aware of the important numbers in your business, which I’m sure, most of your competition is overlooking.
Converting enquires into bookings is another often overlooked part of the photography sales process. Not only do you get the opportunity for income now, it gives you an opportunity to book future business through referrals.
The number of bookings required in your business should match the number of sessions required. So if you need to do three photo sessions per month, then you also need to book three clients per month.
Obviously the bookings you get today could help get you more sessions in the future. However, I have found that these numbers tend to correct themselves if you focus on getting your target bookings each and every month. So if you’re not doing enough sessions, you have to revisit your bookings and see how you can increase your inquiries.
Hopefully by now you have a better understanding of the relationship between different targets in your photography business. It is clear that more inquiries lead to more bookings, which lead to more sessions, which ultimately leads to more income.
It’s all well and good to be aware of the numbers, but to make significant change in your photography business requires you to hold yourself accountable and ensure that you’re following through on your goals. There are a couple ways you can do this.
One way is to draw a table in your notebook that displays each target for the month. You then record a dash next to the target when you get it done. So if you have a target of three sessions for the month, every time you do a session you draw a dash next to this target. You can also break this down into weeks if that makes it easier for you to update.
You could also track your numbers by drawing up your targets on a whiteboard in your home office or studio. This is an excellent idea as you’re constantly looking at it.
Another way to do this is to create a spreadsheet. I know a lot of creative professionals cringe when they hear the word “spreadsheet”. However I encourage you to push through your barriers and use a spreadsheet to track your numbers.
The advantage of a spreadsheet is that it does all the work for you. All you have to do is input your progress and the spreadsheet can tell you how you’re doing. I can just hear what you’re saying at the moment. “Michael, this sounds great, but how do I actually create this spreadsheet you’re talking about?” I thought you might ask, so I’ve prepared a spreadsheet for you to download for you to use in your business. I initially created this spreadsheet for my partner’s photography business to track her numbers, and it really helped change her mindset in her business.
Before using my tool she couldn’t tell me what percentage of inquiries were converting into bookings. After she started tracking her numbers, she felt empowered and knew exactly how her business was going at any given time. Sometimes it was a pleasant surprise to know that she smashed her targets, other times she knew that she had to find ways to generate more business.
You don’t have to look at your numbers daily. I recommend updating your numbers at the end of each week. I also suggest that at the end of each month you send your numbers to an accountability partner. Knowing that you have to submit your numbers will only motivate you more. Choose someone you trust and you’re comfortable enough with to share your goals. This could be your spouse, sibling, good friend or business buddy. Sometimes all you need is some encouraging words to keep you focused in your business.
It can be somewhat soothing to plan and think about how much money you’re going to make. Having said that, it’s just as important to understand how you’re spending your income.
Lots of new and even seasoned professional photographers overlook this highly important step. Reducing your costs is another method of making more money so you can spend it on more important things, like a new lens or a holiday.
So how can you go about tracking your expenses? Well it’s quite simple, use accounting software. There are many accounting solutions on the market that are both free and paid. Personally, I recommend going with Wave (because it’s free) or Xero (because it’s awesome). Both systems allow you to automatically pull your transactions from your business account bank statement directly into your accounting software. This means you don’t have to spend hours entering your expenses. Pretty cool huh?
Most photographers get overwhelmed when they think of financial management. But investing time in this area will do wonders for your business.
By far the most important feature of accounting software, is the ability to create reports that allow you to see where, and how much, money you are spending in your business. From there you can make necessary adjustments to cut back on your costs.
The whole purpose of this article is to bring clarity into your business. A lot of photographers like yourself start a business because you want to earn a living doing something that you enjoy. But you soon come to realize that making a living and growing your business is not easy. It can be overwhelming thinking about how you’re going to get through tomorrow’s to-do list while keeping all of your existing clients happy. This overwhelming feeling often leads to “fog brain” and prevents you from having clarity in your business.
Being aware of your numbers will ultimately help you make better decisions. Instead of spending one hour on Facebook today, you could spend that time contacting potential referral partners for your business.
At the end of the day, activities that generate more inquiries are much more important than getting bogged down with emails, packaging, social media, design and other administrative activities, especially when trying to reach higher income targets. Get someone else to do those things so you can focus on what’s important: servicing your clients, doing sessions, finalizing bookings and generating so you can fund the lifestyle that you want and deserve.
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