Now that you know your gross sales goal by running a break-even analysis, you have to figure out how to actually make that money! If you have not run your break-even analysis but still want to try this out, remember that most photography studios need gross sales of $150,000-250,000 depending on if you have a studio or not. You forecast how to make your gross sales by making educated guesses on your sessions and sales. You break your gross sales down by how many products and services sold at what price.
Here is an example: if your goal is $200,000 in gross sales per year, you can photograph 20 weddings at $10,000 each. You know your salary and all expenses are covered at this point if your break-even analysis showed you need $200,000. Anything over $200,000 is extra cash for you and the business.
It is more likely though that you offer more than just wedding photography or may not be able to command $10,000 from each wedding you photograph.
Let us try another example using the same goal of $200,000 in annual gross sales. Perhaps we want to focus on wedding photography but also start up a portrait photography line. Plus, we would like to break down what we might be able to do in additional album and canvas sales. For example:
30 weddings at $5,000 each = 150,000
10 album upgrades at $2,000 each = 20,000
30 portrait sessions at $500 each = 15,000
7 portrait albums sold at $1,000 each = 7,000
16 portrait canvases sold at $500 each = 8,000
Gross Sales = $200,000
Do you see how there are many different ways to budget for your future sessions and sales income? There is no correct answer of what works – this is for you to guess, test, and estimate based on your market, clientele, demand, and previous sales.
You will want to take this a step further now and assign how many sessions you will do each month. Put your sales goals on a calendar! Using the simplified example of 20 weddings photographed at $10,000 each, you might assign two weddings per month except for January and February. If you live somewhere where weddings primarily happen in the spring and summer, you might aim to photograph 4 weddings per month in April, May, June, July, and September. This also adds up to be 20 weddings total.
Once you have been in business for a few years, forecasting your sessions and sales will be much easier. You can simply look back at previous years’ numbers and adjust these numbers for the upcoming year. For example, if I photographed 25 weddings in 2006, 20 weddings in 2007, 25 in 2008, and 20 again in 2009 I’d likely look at booking a similar number of weddings (20-25) for 2010. Evaluate your goals and numbers and adjust accordingly. Perhaps in 2010 I decide I’d like to focus more on portraits, I may consider photographing fewer weddings at a higher average and then increasing my portrait sessions and sales.
The point of putting these numbers on paper and assigning sessions and sales goals for each month is to keep you on track. If you have a goal of photographing five weddings in May, and May comes and goes with only two weddings on the books – you know it’s time to hustle and bustle to make up for the income. You might need to book those three weddings during a future month instead (in addition to what you already forecasted for that month), or look at making up for it in other ways such as doing a canvas print promotion or taking on some additional portrait jobs.
Predicting your sessions and sales, putting the sessions on a calendar, and watching your progress throughout the year may be one of the best things you can do for your business. A photographer in Australia went through Boot Camp in April 2009 and did this exact exercise. When I returned to Australia less than a year later and met with her again, she shared an interesting observation that many others experience as well. For the first six months after predicting her sessions and sales, she kept a close watch on these goals and her gross sales more than doubled from the previous year! After that she got super busy and took her eye off her sessions and sales goals, and her gross sales returned back to what it had been previously. It’s not just her but about every business I speak with that makes sessions and sales goals will increase their income and stay on track. You need to do much more than put these numbers on paper though, it’s the follow-through that makes it count!
Written By Liana Lehman Hall
Liana’s main job is to photograph Atlanta and Destination Weddings. In the winter months Liana can also be found speaking at major industry events and teaching Photo Biz Boot Camps throughout the US and abroad. Liana is one of the only professional wedding photographers who is accredited and actively teaching managerial accounting, finance, and business planning to other professional photography studios.
Join Liana at Pictage U Atlanta, Family & Kids. A two day intensive conference focusing on the world of family and kids portrait photography taught by professional photographers who own successful family and kids portrait photography businesses, like Liana.
(NOTE: This post is an excerpt from Chapter 3 of Liana’s upcoming book, Nuts, Bolts and Bananas | The crazy stuff every wedding and portrait photographer needs to know in order to run a successful business. Due out Fall/Winter 2010)