A Confession of Losing at the Game of Chance

Sometimes you have to take chances to grow your business  And not every change will work. 

This year was a year of experimenting with my business.  For the first third of 2009 my revenue was up 38%.  Super exciting, right!?  But I was trying to look ahead and grow the business so I brought in some associate photographers.  The idea was that I would lower the per-shoot revenue but making it a package deal including the disk but that the associates would be taking on the lower-priced shoots and I would continue doing the higher end shoots.

 

Unfortunately my little experiment was a failure.  Clients were not lining up for these lower priced sessions like I expected.  It seemed that many people were nervous about paying more upfront and not seeing the photos before paying.  And they wanted to come to me - not to a new associate. And they didn't see the option of purchasing the disk ahead of time as a savings over the traditional portrait sessions.  And we ended up discounting the sessions further trying to build up clients for the associates which only made the situation worse by having sessions that were actually below cost.

We did do some great mini-session events in September which is why we had a spike in revenue in September but we also had higher expenses that month due to those mini-sessions.  And because  sessions were prepaid at a discounted rate, our revenue dropped quickly during the time that our revenue was on the rise last year.  So instead of finishing the year with a 40% increase in revenue over the year before, which was my goal, I actually finished out the year a little behind. 

The good news is I'm not afraid to make changes.  Clearly.  So I've decided to go back to my more traditional model with a session fee for the payment...then selling the prints and digital files after they see the proofs.  It was a better model for me and it allowed me to keep a much more reasonable schedule.  So I'll be going back to that for 2010.   In addition, I'll be subletting some of the space in the loft that I'm leasing to a design company since I'm not there that often and it is a lot of overhead to carry.  Actually, I was thrilled when I saw that suggestion to sub-let in the PPA magazine this month because it helped me feel better about reducing my overhead that way.    2010 is looking up already.  I have a bunch of newborn sessions scheduled between now and April in a time that is traditionally slow for outdoor portrait photographers.  

Don't be afraid to take chances but know what the risks are, the worst case scenarios, and plan for them.  I actually didn't plan my Fall very well because I kept thinking that suddenly people would realize the holidays were around the corner and book sessions  with the associates.  I really had no back-up plan.  So now I'm adding, "BETTER PLANNING" to my goals for 2010.   

What about you?  What mistake did you make in 2009 and what did you learn from them?  Or what changes did you make that worked great for you?

Comments

[viviZ]

Hi. I don't think I've ever posted before but thought it was time to do so. I came across your blog(s) a while ago when I was just starting out and have continued to enjoy following you. I have enjoyed watching you grow and succeed! I appreciate how open you are with your business decisions, providing us with so many details. Your insight and sharing allows so many of us out in cyberspace to learn from your successes (as well as the less than desirable strategies & plans). Thank you so much!

[kristin]

thanks for this post - it's really refreshing to hear from a successful photographer that they make mistakes. sometimes it seems as if everyone else is magically making great decisions all the time and their businesses are soaring. it's really nice to hear someone be honest about stumbling - momentarily - and knowing that i'm not the only one.

thanks.

[Lisa Turner]

My biggest challenge last year, and I have done this previously...is being priced too low, taking on too much work, and then getting so burnt out I can't even look at my camera for 2 months. I think I might pick it back up today...haven't done anything since December 11th. My entire Christmas was point and shoot. So lesson learned-price right, choose sessions that are the right fit for me, and find my passion again! Thanks for your post-so great to know I'm not the only one who makes business mistakes!

[Joanna]

This is good to read because i need to hear that it's okay to fail and make changes! Thank you for that. I spent too much money on advertising in 2009 - in print and on the radio - and it barely worked. Definitely not enough to pay for itself. What DID work best was one little arts & crafts fair where I met people in person. Hands on was the best approach by far.

[Julie]

Ok, it's funny you should post this b/c my husband and I are seriously thinking about hiring associates. Do you think it's the associates in themselves that didn't work for you b/c your clients wanted YOU; or was it that the traditional model with the Session fee for payment just worked better for your business? Are you going to keep your associates? Please elaborate!! :-)

[Jessica G]

Julie-I think it was a variety of factors. Part of it was people still wanted to come to me. Our original idea was to have the associates call upon their own networks to build up their clientele but it didn't work as we expected (both had pretty large social networks when they started). Part of it was by charging more upfront to have sessions that included the disk of images instead of charging a lower session fee and taking a chance on the orders from the clients.

The way we went was to provide the equipment and training and marketing support but they would also cultivate their area. We did try different methods of reaching out to their networks. But it was very slow going and only when we DEEPLY discounted the product were we able to build up any traction - but it was at a loss for the business so not sustainable.

I think there are some different things we could have tried to make it work but it was a pretty expensive lesson for us. I think Laura Novak has a good system where she has a sub-brand for her associates so there is more differentiation (I think she also has her associates in a studio setting and she is on-location). I think also if we had had a lower cost of entry with the session fee for associates but then have the sales for prints or digital files, they would have booked more sessions. The problem is that in that case we would be taking on more of a risk because we wouldn't know what kind of sales they would have and the editing would be done on spec. It is one thing to do that for one person...but to be editing three people's worth of images and not really knowing where the sales would land was more of a risk than we were willing to take.

Another way it possibly would have worked better would be if we were in completely different markets. I did think about that - possibly hiring and training a photographer in another city/state with my style and then provide the umbrella of support from corporate.

Anyway, we are not continuing with the associates. It was a really hard decision for me because, of course, I thought, maybe I could try all these different ideas and maybe in the future I can but I need to take a little step back for 2010. I've been pushing so hard for two years and I need to refocus a bit.

[Nikki]

Like some of the others...I stumbled across your site a while back and bookmarked it...Funny I should choose today to read your post. I sublet space this past year...one small tip...Make sure you have an AIRTIGHT contract and have an attorney look over it. We had or or having an issue and although legally we are in the clear...we are having to spend the time dealing with it "legally" b/c the person thinks they found a loop hole to get out of the contract. Luckily the law is on our side.

Something we are looking at is maybe "day" leasing. As we have had several people interested in "using" the studio for various purposes. Good luck with the new year.

[Julie]

Thanks, Jessica! I always enjoy your blog. :-)

[Melissa]

The best thing I did at the beginning of the year was take up my rates. I went with smarter pricing and thinking, I would rather work less and make more. Lucky for me, work stayed really steady.

My 2nd best move was attending the Learnfest workshop, which I discovered here. It changed the way I do my business. I know do in person, projection sales and my sales have been double.

Where I need to improve, my spending and my organization.

[Jessica]

I know, I know! If you look at 2008 there is that HUGE spike at the end...it happened RIGHT AFTER LEARNFEST and it was no accident. It wasn't just the holiday rush...it was the holiday rush combined with me putting together what I learned at Learnfest from a sales perspective. And my early 2009 was so promising too with the 38% sales growth. I mean, hello, 38% sales growth!!!!

I felt like there was this HUGE market segment just waiting to be tapped that wanted higher end photography but with a budget. I thought if we stripped down all the bells and whistles (no in person pre-session consultation, no online gallery, fewer proofed images, no sales - just a shoot-edit-burn model) that we could make it more affordable. But as it turns out, that middle market wants all the bells and whistles, they just don't want to pay for them. So they would ask and ask and ask some more for extra this or that service and then complain about the $500 price tag being so high and not getting MORE for it. So going back to a higher end market where I'm thrilled to service them because they are willing to pay for that extra service is totally fine with me. I love photographing folks but honestly, I really let a lot of other things in my life suffer because I was too busy taking pictures and I, like many of the readers, really want to find better balance and certainly higher prices can help find that.

[cindy]

Thanks so much for this post. And for the comments elaborating on it. I'm so afraid of failing that I don't take the chances, so it was so nice to hear about your year, the chances you took, and the outcome. Especially that it didn't crush you. I really want to follow Laura Novak's business model of focusing on Home Decor, but I've been to scared to make the jump since most of my clients buy the (way underpriced) CD of files. Your post has given me more courage to do it.