Join Skip Cohen for an in-depth discussion in this video Understanding revenue, part of Running a Photography Business: Pricing Your Work.
- So let's talk about the importance of understanding revenue. First of all, it doesn't make any difference how much you make. It's how much you keep. So one artist could be billing out and doing gross sales of $100,000 a year but keeping $50,000 in profitability. Somebody else might be doing $200,000 a year but their bottom line, they're only making 25,000. That's the difference between controlling your costs and understanding your costs, charging the right amount and not understanding your costs or charging too little for your services.
So I want to spend some time, we're going to talk about defining your revenue streams. As a wedding photographer for example, there's so many different ways for you to make money. It's not just the coverage of the wedding. It could be the engagement session. It could be selling slideshows of the client and putting together hybrid shows for example which are a combination of still images, short video clips all put to music and creating something for your client. The same would apply as a portrait photographer. We're going to talk about each one of those revenue points but the point is that as you start to think about your business and define your revenue streams, it's important to remember how much flexibility and creativity you've got to be able to create products that get people excited that they want to purchase.
Most important of all, we're going to talk about time being money. Time is money. If you're a mediocre photographer and this is where your skill set starts to play a role, one of the things that really gets me excited when I'm working with a great photographer is their images are always terrific right out of the can. Now, that right out of the can expression goes back to old film days but it means their exposure, their composition, everything in the image is terrific so they have a minimal amount of time that they've got to spend on Photoshop or Lightroom retouching and cleaning up their images.
So when we start to talk about time is money, if you're creating great images and you've made it a point to make sure your skill set is terrific then that means you're going to spend less time at the computer cleaning up last weekend's wedding or yesterday's portrait session and that means you've also got more time available to do marketing and to pay attention to ways you can grow your business because the success of your business is based on you and how much time you spend in marketing and getting the community to know you, relationship building.
You won't accomplish building much in the way of your business if you're behind your computer all day long cleaning up images.
- Understanding revenue
- Looking at target demographics
- Understanding your target audience
- Identifying your real costs
- Deciding which products and services to offer
- Pricing your products
- Working with key suppliers
- Controlling your costs