9 elements of a business plan
The purpose of a business plan is to provide structure for your business.
By Ann K. Monteith, M.Photog.Cr.Hon.M.Photog., A-ASP,
First published January 2003
Whether you’re selling pencils, ball bearings, or photography, the elements of a business plan are essentially the same.
There’s a great deal more to operating a photography business than just taking pictures. Whether you’re selling pencils, ball bearings, or photography, the elements of a business plan are essentially the same. The
plan need not be grandiose: Simple statements —specific rather than general—based on well-researched concepts and figures will suffice.
The purpose of the plan is to provide structure for your business through identifying the functions that must be managed.
Product. What do you plan to sell? To whom do you plan to sell it? What potential customers have you identified and how do you plan to reach them? What “Session/Sales Volume Category,” “Operational Profile,” and “Technology Profile” do you plan to pursue? Who else competes for these customers, selling
Promotion. List the promotional media that will convey your marketing effort, and estimate the cost of these promotional enterprises. Who are your contacts in the community who might be helpful in promoting your new business?
Pricing. Determine the wholesale costs of your photographic products. Decide on an appropriate mark-up percentage (the cost of sales factor), according to a realistic appraisal of your general expenses (overhead). Using your cost of sales factor, calculate your retail prices. (See story, p. 45.)
Presentation. What sales tools will be needed to sell your products? What method(s) of sales presentation will you employ? Will you do the sales presentation yourself, or will you hire someone to do it for you?
Place. Where and when do you intend to conduct your business? List any modifications required to conduct business at the desired location.
Personnel. What key functions of the business must be staffed? Can you handle all of these functions yourself, or will you have to hire full- or part-time staff? Calculate the wages, taxes, and benefits that you plan to pay any personnel on your payroll or from whom you might purchase freelance services.
Productivity. List both technological and personal factors that can enhance your time management and the productivity of your business. List factors that can have a negative impact on productivity.
Projections. How many portrait sessions, weddings and other photography jobs do you expect your business to perform within a 12-month period? List the projected amount of your total sales by each type (product line). List the cost of sales of these projected sales. List the annual general expenses (overhead, including your salary and the employees’ salaries). Create a capital expense budget that includes equipment, furnishings, fixtures, automobile(s), building (if you intend to purchase a business building) or
leaseholder improvements, and any other assets you will buy for the business. From these data, create a projected annual income-and-expense budget for your proposed business. These two budgets— capital expense and income-andexpense— are vital, because they will spell out the financial reality of your proposed business venture.
Profit. What amount of profit will be necessary to provide an adequate return on your investment to a) justify the risk and burden of operating a business, and b) provide funds for future expansion?
Abridged excerpt from “The Professional Photographer’s Management Handbook” (Marathon Press), by Ann K. Monteith, M.Photog.Cr.Hon.M.Photog., A-ASP, CPP