March 27, 2013

AVOIDING DEBT on YOUR NEW PHOTOGRAPHY BUSINESS


AVOIDING DEBT 
YOUR NEW PHOTOGRAPHY BUSINESS




Time for a new blog in perspectives,  and while reviewing some of PPA/Benchmark PDFs - This is one was so  worth re-reading, due to the reason many new self started business fail... they are in debt before they produce profits. So, I felt it was a relevant topic for my blog this week! 

New as well as aspiring photographers often are seduced by that old saying : "you have to spend money to make money.    In my experience Don’t spend it unless you can afford to spend it."

I am a believer, that in this world of evolving technology and new photographers in the field, we must all come together and share our experiences, and this why I enjoy writing  these topics so that others appreciate what some of us have gone through ...  

In the PPA/Benchmark article, Ann Monteith gives some great suggestions that I have followed , and proven to have work so far. Here are my thoughts:


  • Don’t go full time until you have developed a following among your target market (which means gaining client referrals) and developed consistent cash flow from your part-time business and an efficient workflow that assures on-time product delivery. It takes time to build a new business (usually between two and five years), and most experts agree that a photographer should be grossing between $50,000 and $100,000 annually before it is wise to consider a full-time home-based business, or $150,000 to $200,000 annually before considering a  full-time retail-location business.


          Although, my NOW full time job is my PHOTOGRAPHY BUSINESS... Like a lot of us, I did work over 120hrs a week between photography and a regular full time job for over a year, until I realized that my business was not only bringing in more income than the FT job I had in healthcare, but I was beginning to turn away photo-clients due to my assigned shifts at work.  
A time for a decision had arrived and I was not totally ready mentally, because I have always had a job while photography had been my enjoyment on time off and never thought of as a business... I am two years in and also I have relocated, it took a lot of work to get established where I lived in the East Coast {Wilmington, NC}, but this new relocation to Southern Utah, has brought on a whole new business revamping plan on all levels and I am really happy for this change, I feel like I have started again and not fearful of failure, but happy for the new opportunities that have opened in the West Coast and the growth.  Although, this year I will be traveling for assignments, these are opportunities that  had no open, would I have not taken a leap to leave that job.


THE BENCHMARK: Guard your cash. Too many photographers manage their businesses by checkbook balance: If there is money in the checkbook, they spend it; if not, they start to worry. A business plan that includes a cash-flow forecast will help you know when to expect lulls in your business that will require funding.Understanding normal business cycles will help you to conserve cash to cover those lean times.


  • Budget your start-up expenses (cameras, lights, computers, software, props, furnishings, etc.) very carefully. Even if you have the cash to purchase an item, make sure it is money you can afford to lose, as no small business is a sure thing.

         This is reality guys. Nothing in my business is financed. Everything has been paid for and all the work I have placed in the business, its profits went to acquire everything that feeds my business, and this has been... Education, lighting equipment, props, equipment {cameras, batt-packs, lenses} memberships and associations, insurance, hardware, software etc. and more lately, conventions and travel and higher end marketing. In my other blog that speaks about having that Homes-Studio... That has helped tremendously, I am always looking for ways to avoid debt.  


THE BENCHMARK: Budget your capital investments carefully. 
Too much debt is a business killer.


  • If you must borrow to make these purchases, create a prioritized budget for equipment essentials, as well as a few key marketing pieces, professional association membership, and professional education. &• If you decide to borrow for your start-up items, investigate lending options. Avoid using high-interest credit cards. Cap your borrowing budget at a level that you can pay back within 24 months using personal resources, in case you do not have enough positive cash flow from the business.

          I have avoided this step, unless it becomes a necessary, I stay away from borrowing to make any purchases - Once you have the essentials, a good rule of thumb is to purchase only those extras that you can pay for within 12 months.


THE BENCHMARK:  Start a reinvestment fund. Set aside a portion of each sales dollar in a reinvestment fund   for new capital expenditures.

Some resources have been used for this blog - provided by PPA.COM/BENCHMARK -  and the reviews have been provided by Allie Miller |AMillerFoto - PHOTOGRAPHY - Southern Utah Photographer

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