How We Did It - Shannon & Steve Ho
For Shannon and Steve Ho of Shannon Ho Photography, scaling business to family life is the top priority.
By Jeff Kent
Managing a business isn’t always about money. It’s often about one’s lifestyle. For Shannon and Steve Ho of Shannon Ho Photography, scaling business to family life is the top priority.
Shannon launched the business in 2002. With one part-time assistant, she built a thriving home-based portrait and wedding studio in Norman, Okla. Adamantly debt-averse, Shannon did the photography, collected the fees, and banked the money. She did a fantastic job of that, but she had no real understanding of the financials, or how to forecast business cycles. She’d be maxed out at certain times of year and see little business at others. And while her print pricing was in good shape, her product pricing for albums and other items was a guessing game based on multiplying material costs by four.
For the first four years, Steve helped Shannon add technology and build the workflow system while he held a corporate IT job. When Shannon’s assistant moved away in 2006, Steve came onboard full time to manage the business.
Shannon was pregnant with their son at the time. “I was torn … I didn’t want to be a fulltime working mom, but I loved photography. I wanted to figure out how to manage our numbers and increase the amount of time we could spend together as a family.”
For the next year, the Hos implemented good, if instinctive business habits, but weren’t necessarily seeing where the business was headed. Then they came across the initial PPA Financial Benchmark Survey, and for the first time, had a set of hard numbers to aim for. “We knew that if we could apply these numbers to our studio, we’d have a successful business,” says Steve.
In early 2008, the Hos attended a PPA Studio Management Services (SMS) workshop in Atlanta, and became SMS clients shortly after. Their SMS consultant, Bridget Jackson, immediately noted the Hos’ excellent savings habits and extremely low cost of sales—less than 20 percent of their gross sales. The benchmark for a homebased studio is 35 percent. As a result, the Hos’ net profit plus owners’ compensation was about 60 percent, an outstanding figure.
Yet Shannon and Steve wanted to work less, on a set schedule, and devote more time to family life. Their SMS mentors, Jeff and Julia Woods (both M.Photog.Cr.), counseled them to raise their prices and reorganize to function with fewer clients. The objective was to increase the per-session sales average and decrease the number of sessions.
The Hos raised prices in stages throughout 2008. Following more advice from Jeff and Julia Woods, as well as a new set of SMS mentors for 2009, Jeff and Allison Rodgers, they modified their sales procedure to include an in-studio pre-session consultation and a post-session ordering appointment. Now Sharon asks clients to send her digital snapshots of the rooms in their home. Before the ordering session, she uses Photoshop to scale and “hang” the client’s
portraits at the size and in the spots where they’d make the maximum impact. That’s how clients see the portraits during the ordering session—large and in place. Irresistible.
“All of these changes help build relationships with the clients so it doesn’t feel like a sales environment,” says Shannon.
“Exactly,” agrees Steve. “Decreasing the number of sessions allows us to spend more time with each client—quality time.”
As the prices rose, inquiries decreased, yet sales averages increased. The Hos have cut the number of sessions they do by about 25 percent in each of the past two years. Meanwhile, the per-session sales average has risen by about 30 percent each year, and the studio’s gross revenue has remained consistent. Fewer clients leads to less production overhead, so even the Hos’ cost of sales has dropped, pushing up the bottom-line profit to over 70 percent in 2008. So Shannon and Steve Ho have managed to increase their take-home pay while working less.
“Their case is absolutely amazing,” says Jackson. “The cost of sales and bottom-line profit blow away the benchmarks for their type of studio. They’ve built themselves intoone of our top performers.”
With better understanding of their numbers, the Hos have a stronger grasp on their product lines and an improved sense of their success in specific markets. They ascertain which areas are most profitable and adjust their time to focus on those segments. They can also forecast seasonal demand and book appropriately.
“That’s been one of the biggest things for me,” says Steve. “Having the knowledge to forecast the future helps both our short- and long-term planning. With no real idea of what to expect, it was hard to set goals.”
“The two things I gained were balance and freedom,” says Shannon. “Now I know that I can have set days with my son and not feel guilty that I should be working. I have the confidence to schedule my life.”
The Hos hired a part-time assistant in April 2008. The increased sales averages more than pay for the addition. The assistant works offsite, answering phones remotely and helping with client correspondence, scheduling and accounting through online accounting applications, such as QuickBooks Online, Google Calendars and Google Docs. The presence of the assistant helps Shannon concentrate on the clients while Steve focuses on fulfillment, technology and business development.
“Our main goal is not to make a ton of money,” says Shannon. “It’s to have a good balance between work and family time. SMS helped us with that in terms of adjusting cost of sales and other benchmarks so that we could target certain markets better, adjust our schedules according to our lifestyle, and be more comfortable with the decisions we make about our business.”