Setting Up a Workable Budget

This post is Day 9 of 30 Ways In 30 Days To Redesign Your Life With Photography. This series seeks to provide you with practical steps to get you from wherever you are today, to exactly where you want to be – this year! If your goal has always been to take your photography to a whole new level, hang on and start enjoying a new lifestyle you’ve always dreamed of.

 

In many industries, when people decide to set out on their own path and start a business, the first thing they look for is a financing option. They determine how much they will need and find a source for it, whether it’s through credit cards, dipping into a retirement fund, borrowing from family, or taking out a loan.

But for some reason, I’ve found photography to be one of those industries where the same doesn’t hold true. Maybe its because many photographers start out as hobbyists, have a bunch of equipment on hand, and decide to turn it into a business at that point. In any case there is a long stretch between having some equipment on hand, and running a profitable business.

Scour the Internet and you’ll find there’s no shortage of advice on how to fund your dream of operating a photography business. There are many sites dedicated to turn you from a small business dreamer to a multimillionaire in just a few short weeks using a “proven” method. Yet when you weave your way through all the smoke and mirrors, what it really comes down to is a budget. There are no tricks or secrets – you simply need to create a budget that allows you to grow your business.

The Best Road Is The Simple Road

It’s easy to print up a few business cards and begin telling people you have a photography business. But it’s a more difficult task to get business coming in on a regular basis. When it comes to getting your name out there, you have two choices.

1. Spend money on advertising methods to gain recognition.
2. Dedicate time to free activities that will gain recognition.

It’s easy to say you want to do the latter, but in reality there is only so much time in the day. It has to be a balance between the two in order to give you enough time to do what you truly love, and that’s photographing.

No matter how small it may be, having a budget will ultimately help you make decisions about how to move forward. “I have $150 to spend this week” will give you a guideline as to what you can do. “I can spend $1000 a month” will help you look for the right decisions, and not just grab at anything.

Specialize First, Pay Second

Most photographers are generalists. In other words, they do a variety of things within their business. So if you say you do baby portraits, seniors, family portraits, model portfolios, and weddings, you are a generalist – you do a variety of things within your business.

A specialist focuses on one area. As wedding photographers, we specialized in weddings, and that’s all we focused on. We did engagement images, weddings, and the occasional family portrait of our past wedding clients. But we never advertised for anything other than weddings. Our website was all about weddings. And we only focused on getting our name into the wedding photography world. We were wedding specialists, and even used that in our tagline.

The difference between the two is focus. Focus allows you to sidestep all of the other opportunities that are out there, and only focus on things that will help you become more recognized within that area.

Then once you are recognized, it’s easier to expand into other areas because you already have a following.

Once you have your focus, then its time to look into opportunities. Do you want to advertise in traditional sources, like bridal guides, magazines, or newspapers? Do you want to use direct mail? Do you want to join networking groups in your local area? Do you want to spend your time online?

The truth is opportunities are everywhere. And if you are talking with a salesperson, every opportunity can sound like a gold mine. Some methods result from trial and error. And some result from common sense. For example, can you really see today’s 20 or 30 something bride picking up the yellow pages to find a wedding photographer? No matter how well your yellow pages rep talks it up, if you think about it logically, you’ll soon realize the answer is a big NO.

Then realize that no budget is going to be 100 percent accurate, but a rough idea of what you are truly capable of spending will go a long way in helping you choose opportunities.

Let’s Get Started With Creating A Budget

If you’ve been through an accounting class, you’ll probably remember that on average a business spends about 10 percent of its gross profits on marketing. If a business wants to grow, it may bump that number up towards the 15 to 20 percent mark.

So that means if your goal is to make $100,000 this year, you’ll need to spend $10,000 to $20,000 on marketing. Break that down to a monthly amount, and you’re at around $834 to $1667 per month.

Seem a little steep for your lifestyle? Then simply break it down.

Earn Money With Your CameraIf you are just starting up your photo business, maybe your goal is to make $25,000 this year. Using the same philosophy, you would budget your marketing costs to be anywhere from $2,500 to $5,000 per year, or $208 to $416 per month.

Now you have something to work with. You have two ideas to work with.

1. How do I spend my $208 to $416 this month?

And more importantly:

2. How do I come up with my $208 to $416 this month?

If you know $208 stands between you and your dreams of creating a new lifestyle, what would you do to find that $208? Give up your daily coffee runs? Get rid of cable? Cancel the gym membership and workout at home?

Back in Day 5 I gave you my favorite quote:

“Entrepreneurship is living a few years of your life like most people won’t, so that you can spend the rest of your life like most people can’t.”

I got rid of my cable, and still don’t have cable television years after we made that choice. (I just don’t watch that much television anymore, and what I do watch I can get online.) I made choices because the alternative – creating a business – was more important to me.

Once you have your budget, it’s easier to spend it – AND to spend it wisely.

What! This will never work for me!

For you, you may have a larger or a smaller budget. It all depends on your desires, your obligations, and your opportunities. But if you really want it to work, you will find a way. Once you have a dollar amount in mind, its much easier to think in terms of a dollar amount, and weigh it against the opportunity that is presenting itself. Without the dollar amount, you have no idea of what is possible.

“I have a shoestring budget.”

“I’m living on a fixed income.”

“I have very little money to spend on my photography business.”

All of these phrases are a simple way of hiding behind the fact you have never taken the time to figure out what you CAN do, so you assume you can do nothing.

Homework:

1. Test the theory. Pick a number right now that seems real and logical for you. How much do you think you can make this year? Take that number and multiply it by 10 percent and by 20 percent. This will give you your range of yearly marketing dollars. Now take those two numbers and divide them by 12. This will give you your monthly amounts. For example:

$50,000 x 10 percent = $5,000
$50,000 x 20 percent = $10,000
$5,000/12 = $417
$10,000/12 = $833

2. Choose one niche or specialty. If you focus on one niche or specialty – one specific type of customer – its easier to find marketing and advertising options. For weddings, you may sign up for a bridal expo, or for family portraits, you may invest in a BNI membership. With your specialty in mind, find one place you can advertise this month, and see if it works into your budget. In some cases it may take a two month budget – that’s okay. Just save up for the two months, and jump on your idea. Don’t waste the money on something else – save it for your desired option.

3. Track and follow. The only way to make this work is to dedicate the time to track and follow your results. Keep the funds separate and available so that you can take advantage of opportunities when they present themselves.

4 thoughts on “Setting Up a Workable Budget”

  1. I disagree with the 10-15% budget amount for marketing. With so many amazing and free online networks, I think you can do a way better job of getting your name out there by using untraditional methods such as facebook than by paying for more traditional advertising. Then take any money you want to spend on marketing and invest it in making your current clients rave about you – such a promotional pieces that you give out for free that they LOVE and can’t help but to rave about to their friends. Spend some of it over coffee or lunch while networking with other photography professionals so that you can pass business around when you’re booked. These things have a much better return on investment than most traditional expensive ads, and the nice thing is that they’re way cheaper, too. 🙂

    I’ve maybe spent $1500 on marketing in the three years we’ve been in business and we’re making enough for my husband and I to both be doing this full-time this coming summer (and about half of that was on traditional methods that don’t yield anything that I regret!).

    Reply
    • I completely agree with you Jamie – and what you are talking about is actually marketing. So instead of spending money on advertising in the bridal guide, you are creating promotional pieces that you hand out to clients or referral sources. That is a form of marketing – referral marketing – and that’s how we completely built our business.

      In this post, I didn’t get into all the ways of marketing – its more from a budgeting standpoint, and how you come up with funds to use to promote your business. In some of the future days I’ll cover more about actual marketing methods.

      Also remember that time is money. I did list in here that you have two choices – either spend money on advertising, or dedicate time to free activities. If you have the time, Facebook and other online resources are GREAT. But they do take away from your shooting time. So its a trade off. Be aware that your time is money, and if you can use your money in a more effective way, you should always choose that path.

      Lori

      Reply
  2. I agree with Jamie and Virtual as well.
    I’m actually starting fresh with my business. I’m 23 years old trying to maintain an affordable living. What’s the best way to catch clients eyes and to retrieve them to my biz?

    Reply
    • Hi Brian

      The key is getting your name out there. You can do it on the social sites – Facebook, Pinterest, etc. And you should also get out there and network. Go to groups where your potential clients might be. The more they see you and what you do, the more clients you will find. The rest will build over time.

      Lori

      Reply

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