A friend of mine was considering a new business venture, it was the kind of deal where some of the top earners are making $10,000 a month, although the average income was $100-$200. The problem is that this commitment would tie up his considerable talents, and he wouldn’t be able to make much money in other places. My advice to him was this: “If you are going to do this, then make damn sure that you are not average, because you can not afford to be average” It sounds like obvious advice, but how many of us go into business assuming that we will be at the top of the heap, when statistically we are more likely to be average? You only have one option here if you want to be in the business of being a photographer, Don’t be average. There is just no money in being average, and there is not much of a future in it. Let me explain why.
In 2006 the PPA (Professional Photographers of America) released the 2005 Studio Financial Benchmark Survey Analysis, it was a survey of photo studios across the country, it included photographers that had retail locations or home studios. It was not good news, on average studios where not performing well. It was a glimpse into the industry that we face today. If you didn’t read it, here are the results
Now please bear with me as we go through some math. In 2005 the average sales from a retail photo studio were $238,689. and for a home based studio it was $129,394. Looks pretty good, right? Not by a mile. After expenses are factored in this left a net profit and salary of $46,036 for the retail store photographer, and $32,977 for the home based photographer. The average median income per household in 2005 was $46,326. So the Retail Photog made slightly less than the average, the home based Photog made $14,000 less.
PPA’s suggested benchmark is that photographers should be able to take home 35% of the sales, and yet the overwhelming majority of studios were not able to reach this standard. Retail photogs average 19.3% of gross sales, and the home based studios took home 25%. Bottom line, retails stores saw more sales, but the costs ate into more of the profit than with home based studios. On average studios are not run close to the level that the PPA thinks they should be.
A few things to take into account. The PPA may have an unrealistic goal for photographers, maybe photographers should expect to only take home 20-25% of sales. Ok maybe that is the case. But the real kicker here about the 2005 study is this. The survey was done when the economy was good. Where are we now, where are we today? It is safe to assume that the prospects have gotten worse.
Lets look at some new math here. Lets assume that you are a home based studio, and you are able to take home 25% of your sales. And lets say that you want to make $150,000. in sales. Assuming that you work 5 days a week, 50 weeks out of the year, that is 250 working days. That means that every day you work you have to bring in $600 in sales. Your profit for all of your hard work at the end of the year is $37,500. That is less than a retail store manager or an elementary school teacher . The average salary for someone with one year experience in their career is $41,647 So the business major one year out of college makes more than the average home studio photog, and close to what the retail store photog.
The simple truth is you cant afford to be average.You have to be better. So how can you insure that you are not average? First you need an understanding of what average is. In photography it means paying attention to the PPA, they are the only ones I know who compile this information. The results of the latest survey will be out in December, they are releasing it in book form, along with a slew of articles to help you make sense of it all and profit from the knowledge. When it comes out, get a copy of it, In my opinion it is vital to your success. Keep your eye on PPA.com for more information. If you are not a member, join up. (Its worth it just for the indemnification insurance alone, but there are many many benefits.) www.ppa.com
The next step is that you have to be smarter than your competition. I don’t even recommend you try to work harder than your competition. for the reason that most photographers work incredibly hard. Can you really take that 60-80 hours a week you work now and work more? That is just not sustainable. You have to work smarter. You will have to discover for yourself what exactly that means, but for me it is a commitment to being a lifelong learner, your formal education was just the beginning. The majority of Americans never complete a book after they leave school, that is the average, that is what you have to beat. Read a book, go to a convention, start learning more about business and photography than your competitor.
If you want to beat the averages, I can offer no better advice than listening to Skip Cohen of Marketing Essentials International. Skip was the president of Rangefinder, and the driving force behind WPPI. I have known Skip for years, but last year was the first time I saw him speak. He was entertaining and more important he offered killer advice for the photographer, I still look at my notes from that lecture to remind me of the things I need to focus on. This last summer Skip put together Skip’s Summer school, an event geared to educate the photographer about their business and where this industry is going. Trust me when I say you should listen to what Skip says and watch what he does. Check out the MEI website, and become a fan on Facebook, you will thank me.
Most of us became photographers because it was our passion. We had a vision that was best expressed in images. Our business don’t fail because we don’t have enough passion, they fail because we don’t have enough knowledge. Making money as a photographer, means learning how to make money, and that is straight business education. This bad economy wont last forever, but the results of bad business practices can. Take the time now to educate yourself because when the dust settles you don’t want to be left in it.
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