In a Slow Economy - Cut Costs

If you are like me, you are are so sick of hearing about the slow economy.  And in an industry where we are likely considered a luxury instead of a necessity, you may have noticed fewer calls, more complaints about high prices, or smaller orders.  

So what's a girl to do if revenue is down?  Or what if it is up but you are still not bringing home the income you would like from your business?

If you cannot make more money (by adding sessions or increasing sales from each session), you'll have to look at other ways to generate more money from your business.

One way is to reduce costs.  There are a number of ways to do this.  Look at your monthly expenses and see if there are any expenses you can reduce.  For example, at one point I was paying a monthly fee for two different proofing systems, and a bunch of other online tools.  Yeah, I'm a sucker for a low monthly service fee...until I have 10 of them adding up to an an extra $200/month.  I'd much rather have that $$ in my pocket.

Another way is to look at your big expenses and see if there is a way to help control that cost.  For me, I looked at my loft space that I used as a gallery/sales space.  It is a great space but much bigger than I needed - especially since I was only going there a day or two a week.  So now I'm sharing the space with some other businesses (a web design company and pr/social media expert).  This greatly reduced the overhead on the space but still gave me the access I would need for meeting client there for shoots.  Since I don't actually shoot in the space having the other folks there is not a problem...and it has been nice having a crew in the space with me.

Another way to control costs is to not buy every new bright shiny object that comes out.  I know, I know, it is so fun to get new toys.  I'm guilty of this too.  Sometimes I'm embarrassed by the number of templates, tools, actions, and gear I "had to have" that hardly gets used now.  But as soon as new gadget comes out...it is hard to resist that urge to buy.  I read something once that said the difference between a business is a hobby is that a business plans their purchases where a hobby will just spend spend spend.  

So take some time to review your bank records.  Look at your recurring expenses and see if you can cut any of those out.  And think twice before you click "buy" to make sure you really NEED that object.  WIll it help you make more money?  How will you judge that it was a successful purchase?

Comments

[Julie]

Good point. I just spent two weeks studying our expenses from 2009 and I was shocked at how much money we had spent on twiddly stuff. I made a new budget for 2010 based on what we could realistically expect to be recurring expenses. Whenever we're tempted to buy a shiny new object, we now ask the question "How much will this profit the business?" It's hard to separate your own personal desire for whatchamacallits from your need to make good business investments, but I had enlightenment when I realized that our business is the sugar daddy that funds our own personal economy. Keep the sugar daddy profitable (i.e. don't buy anything for the business that isn't exceptionally profitable) and eventually I will have enough excess money to go buy whatever thingie it is that I want for myself. In cash. :D

And defining "exceptionally profitable" is another whole post, I'm sure. :)