The Road to Wellness
5 photographers who overhauled their studios and hit paydirt
By Stephanie Boozer & Jeff Kent
First published in January 2004
Running the numbers:
How eliminating overhead and establishing financial goals helped turn negative profits around by Stephanie Boozer
Transitioning from photojournalist and reporter to owner of a fine art and commercial studio seemed natural to PPA member Wendy Woods of Wendy Woods Photography in Stillwater, Minn. After leaving The Washington Post in 2001, Woods launched her own business, initially concentrating on selling her fine art photography, then expanding to commercial projects. At the end of the first year, her profits came to a grand total of $285, and her client list was lackluster.
Hoping to boost sales, she added weddings and portraits to her lineup. Though she was able to drum up more business, her studio was still struggling to become profitable.
“I ended up with a net loss of $4,300, which doesn’t include the $20,000 to $30,000 of equipment I purchased,” says Woods. “It was pretty clear I had to take the bull by the horns here and figure out how to turn things around.”
Woods sought professional help, turning to the expertise of PPA’s Studio Management Services (SMS) group. A network of certified public accountants and mentors, SMS works with PPA members individually to help get their ailing businesses into financial good health. Woods’ assigned mentor was Steve Larson, M.Photog.Cr., CPP, of The Portrait Gallery in Anoka, Minn.
“A wedding photographer myself, I explained my own story and how I turned my own business around,” says Larson, who’s been in business for 28 years and mentors photographers across the country.
“Sometimes it takes a person who’s walked the mile before you to show you the best direction. The right little nudge at the right time can make a big difference.”
Larson and Woods concentrated on setting up business and marketing plans, and he helped her understand the relationship between income and expenses.
“It’s really wonderful to have a mentor,” says Woods. “Now I go out of my way to meet other photographers in the area because I’m interested in the exchange of ideas and the camaraderie. Networking has been one of the most important things I’ve done.”
In addition to the mentoring sessions, Woods worked with SMS CPA Steve Pressas. By analyzing her monthly costs and overall pricing structure, Pressas helped Woods develop a set of financial goals and find the best path to accomplish those goals.
“Without SMS, my books would be a mess,” says Woods. “There’s never enough time in the day and it’s just hard to keep track of everything.”
Pressas also helped Woods develop a strategic marketing plan, outlining how best to spend her marketing dollars. The result? Woods’ sales averages quickly doubled.
“It’s important for photographers to work with accountants who understand their industry,” says Pressas. “Many
photographers are very talented in their field, but have a limited understanding of the business side of things. That’s where SMS really helps out. We analyze each business individually, and help photographers determine where to spend their money.”
Getting her finances in order was the backbone of Woods’ recovery, but she also credits her turnaround to her recent switch to an all-digital studio. Currently shooting with the Canon EOS-1D, EOS-1Ds, and Canon EOS 10D digital cameras, Woods eliminated some overhead by keeping her production costs down. She modernized her studio, purchased an LCD projector for proofing, and invested in an impressive set of digitally produced albums to showcase her work.
“Because I work out of my home, I have very low overhead,” explains Woods. “I do all of my proofing on CDs and display the images as slideshows, which makes the cost of proofing much lower and less timeconsuming than it was with film.”
Getting a handle on her digital process was a tough job to tackle, and it took some trial and error before Woods was
able to truly streamline the process.
“For instance, I was color-correcting every image from scratch, and would get multiple results per series of images,” she says. “Just logistically getting the workflow together and learning how to work with the lab to get the image ready for printing was much harder than I thought it would be.”
Another big hurdle was getting her pricing in line. She admittedly gave too much away in the beginning, a common mistake in young businesses. Her initial wedding clients got a sweet deal, as Woods included the albums—40 pages of photos—the digital master files, and a QuickTime movie for one very low price.
“The greatest thing about Steve Larson is that he helped me structure a bonus incentive system,” says Woods. “Instead of handing everything out like Halloween candy, you provide a reason for people to spend more money, and then give them rewards as they go up the chart. That has really worked well for me.”
Woods also capitalized on the power of the Internet, and her Web site has proven one of her most versatile marketing tools. Designed and maintained by her husband, Woods’ site makes her portfolio accessible to a much larger audience, and allows newlyweds and their friends and family to view their images on their own password protected site.
“Today’s brides were babies when e-mail was invented,” says Woods. “I don’t bother with the Yellow Pages, or many magazines, because my Web site is the basic bottomline to identify myself to my audience.”
Woods’ new business plan, marketing strategy, and financial organization have had a quick impact. This year alone, her total sales have skyrocketed from losses in 2002, to $95,000 in sales through October 2003. Because her operating costs are fairly low, Woods’ profit margins are much more comfortable as well. Sticking to her current path, Woods anticipates a much stronger business in the years to come.
“When you combine the advantages of digital imaging, lower overhead, a more contemporary approach, and great advice, you get wonderful results,” says Woods.
View Woods’ work at www.wendywoodsphotography.com.
For Ed and Susan Mercer, integrating their digital studio into one comprehensive system made all the difference
By Jeff Kent
Everyone has a different formula for success. Some use the tried-and-true methods of their fathers, and their fathers’ fathers. Some hop on the latest technological bandwagon and ride roughshod all the way to the bank. Whatever works.
But critical to the success of any strategy are good organization and a solid business plan. For Ed and Susan Mercer of Mercer Photography, Danvers, Mass., these elements have not only streamlined their workload, but increased profits as well.
In business since the ’70s, the Mercers covered everything from weddings to business portraits to family and children.
The digital revolution brought new opportunity in the form of additional products and a new way of working. Unfortunately, it also brought confusion, archiving issues and the potential for problems with workflow.
The Mercers had grand plans for online selling and expanding their business, but they could never quite work
out how to do it without investing a ridiculous amount of time and money.
That changed in May 2003 when they purchased the Digital Studio Manager system from The Digital Edge (www.4digitaledge.com). This hardware software combination allowed the Mercers to integrate different elements of their business into one system so they could seamlessly manage client data, track sales information and manage their digital assets.
Most important for the Mercers was the newfound freedom to expand their business and reorganize their workflow.
With their current setup, they can have digital files online within five minutes of the shoot. The Digital Studio Manager works like an additional sales person when they channel clients to their Web site for online ordering. Online selling might not work for everyone, but the Mercers have effectively incorporated it as a low-maintenance addition to their sales strategy.
“With the online proofing, I can show clients everything I want to show them without keeping them in the studio for a long time,” says Susan Mercer.
“We’ve been shooting a lot of sports, and at the events we get word to the parents and boosters that the photos are online. Every time we check the system, we have additional on line orders. It’s very easy.”
They use a similar system for wedding photos, but they post only selected images for family and friends to purchase, and show the rest to the couple in a post wedding sales session.
One of the key advantages of any good studio management system is improvement in your workflow. The native ability of the Mercers system to incorporate metadata is pivotal in limiting redundancy in the workflow, yet still allows for double and triple checks before images go out. When a studio salesperson takes an order, she records all of the editing and retouching needed, then sends the order information and digital image file to Dan, the Mercer’s oldest son, who prints out a worksheet of the image editing instructions before tackling the changes in Photoshop. He sends the touched-up image to his mom, who double-checks it against the worksheet to make sure all of the changes have been made. Changes verified, Susan sends the edited digital image file to the lab via FTP transfer.
The Mercers haven’t dramatically increased their prices through this process, yet they’re making higher profits and living easier lives due to increased efficiency. Susan, who considers their prices on the high-end for weddings but lower-end for portraits, says she wants to encourage repeat business and additional sales by maintaining reasonable prices.
“I want to encourage my clients to buy some bigger prints, so I keep my prices at a level that makes me feel comfortable. I would buy my pictures at my prices,” she says.
For the holiday season, the Mercers also offer discounted sitting fees for repeat customers, offering both packages and a la carte sales, albeit with some structure.
“With a lot of package deals, it’s often hard to predict exactly what each individual or family will want,” she says. “With us, the client buys one big print at full price, then everything else is an add-on sale at a discount. It’s a
build-your-own-package concept that requires purchasing at least three units of something.”
While any studio can go out and buy a studio and digital asset management system, it’s how you use it that makes the difference. Improved organization and streamlined workflow not only make life easier for the photographer, but provide opportunities as well. Efficiency breeds freedom to be more creative and to spend more time augmenting the business through new products and promotions.
Most important, it gets the photographer’s nose out of the books and back behind the camera.
Learn more about Mercer Photography at www.mercerphoto.com
Get perspective on profit:
Better business planning can mean more time with loved ones… and more money
by Jeff Kent
Sometimes perspective makes all the difference. In 1993, Frank Donnino’s perspective changed dramatically when his wife was in a serious car accident that left her badly hurt. Though she eventually recovered, the experience forced Donnino to evaluate the priorities in his life.
Until then, he’d been a hard-working Long Island photographer who split his time between wedding and portrait work. He provided for his family and did some great work, but the combination of his wife’s accident and a flagging economy on Long Island changed things.
Shouldn’t life be about spending time with the people you love, he thought, and not so much about burning the midnight oil at work? While we’re at it, why don’t we go ahead and make more money?
Donnino took a look at the focus of his marketing and business plan, and revamped his studio from the inside out. He re-organized his studio finances and developed a targeted marketing strategy to increase his customer base. He even relocated to Florida, where he carved out a niche based on the local economy. His gross sales increased from $71,478 in 1998 to nearly $312,000 in 2002. Projected sales for 2003 are about $350,000. That’s an increase of nearly 500 percent in five years, with much of it coming during a recession.
Donnino’s success is the result of a business plan that integrates the teachings of several photographic business gurus into a specific strategy that he’s tailored to his particular market and specialty. An avid student of the continually evolving business of photography, he allocates at least 40 hours a year for seminars on marketing, studio management and other business issues.
Dina Ivory’s PPA Super Monday programs on baby photography were central to Donnino’s development of his own baby plan. For $39, parents can participate in the Frank Donnino Baby Plan, which includes portrait sessions at 3, 6, 9 and 12 months old. At year’s end, Donnino prints and mounts the client’s favorite image from each of the four sessions and presents them to the parents. If they want additional images from the sessions, they can purchase them at this time, either a la carte or in packages specially designed for The Baby Plan, ranging in price from $220 to $1,075. A la carte collections and add-ons can raise the total sale when the client chooses a lower-priced package.
The Baby Plan has been so successful for Donnino that he divides his studio income figures into two categories: BBP and ABP, Before Baby Plan and After Baby Plan. In 1999, he abandoned shooting weddings altogether to concentrate on the Baby Plan and on child and family portraiture.
“I remember the change like it was yesterday, it was so significant,” says Donnino. “Since we started this [new focus] we haven’t stopped increasing profit.”
He does some promoting through exhibits in a mall, maternity wards and doctors’ offices, but the most effective results come from direct mail sales letters.
“I typically send out 300 to 500 pieces,” says Donnino. “We average between five- and 10-percent return on those letters, and sometimes book 10 or 15 new clients the day after the pieces go in the mail. Each of those clients technically represents four sessions. With average sales between $300 and $500 per session, you do the math. It adds up.”
Donnino purchases targeted mailing lists from a marketing company. The lists arrive monthly via e-mail, and he imports them into his SuccessWare studio management software, which generates labels and keeps a record of past mailings.
The organizational features of SuccessWare (www.successware.net) have been critical to Donnino’s success. While conducting the interview for this article, Donnino repeatedly referenced sales and income figures, which he pulled up in SuccessWare in a matter of seconds. The program allows Donnino to easily organize his gross receipts and cost of sales to determine his gross profits. Based on those figures, he determines how much is available to spend on marketing and promotion, with the remainder being his net profits. SuccessWarealso allows Donnino to track returns from
promotions quickly and efficiently.
Donnino averages just shy of 11 studio sessions a week, most of those Baby Plans. He does a dozen or so location portraits a year, with average sales of $2,600 per session. Not too shabby for a studio whose total staff consists of Donnino, his wife, Donna, and his 21-year-old son, Tony.
Donnino attributes much of this sales success to the teachings of Charles Lewis, M.Photog.Cr., A-ASP, who advocates preportrait conferences and post-session sales presentations with an image-projection system. No paper proofs ever go out the door, and all orders are placed at the time of the viewing.
“There’s no way you can compare the sales you would get if you were giving them paper proofs as opposed to projection,” says Donnino. “I would give up my camera before I gave up my projection system. It’s the only way to do it.”
For Donnino, at the end of the day it’s all about making the most money possible in the least amount of time so that he can enjoy life with his family.
“I’m not materialistic,” he says. “I like having a great business that I enjoy, being able to spend time with my
family, go on vacation, and enjoy my life while I’m healthy.”
See more of Donnino’s work at www.frank.nu. For more on the Frank Donnino Baby Plan, visit www.franksbabyplan.com.
Finding the ball in the weeds:
In a high-volume business, identifying problem areas can be a challenge. Enter studio management.
by Jeff Kent
You don’t know what you don’t know,” says David Bourne of Roswell, Ga.
In business since 1975, Bourne had been running a fairly successful general practice studio. Family portraits, seniors, weddings, school portraits, sports and recreation photography—you name it, Photography by David did it, and did it in volume, tipping better than $1 million in sales at the beginning of the millennium.
“We puttered along doing that for a long time, doing great, until 9/11 hit,” says Bourne. “That really knocked us on our fanny. Business went down, overhead stayed up, and we went in the tank. So we started thinking about how we could do things differently.”
Bourne decided it was time to employ a studio management system. He did his research and ultimately settled on Photo One from Granite Bear Development (www.granitebear.com). He input his figures, transferred the relevant data, and sat down to figure out what he was doing wrong. One of his first actions was to run a cost analysis report to determine how much profit he was making on particular jobs.
“It was a real revelation to find out where our best business was coming from, and the profit and loss from that business,” says Bourne. “The jobs that we thought were making the most money—because a lot of money was changing hands—turned out to be losers. It was difficult for us to determine a lot of that because of the volume the studio handles. We were as lost as a ball in high weeds.”
For example, Bourne discovered that he was not charging enough for child portraits. Not only that, he and his photographers were taking too long with each session. Their income per hour was far below what people of their skill should have been producing. Bourne also figured out that his previous prices for wedding books were too low. At a rate of $1,650 per book and production costs of around $1,400, Bourne was only pulling in $250 a book. All that for a product that requires a significant investment of time and materials.
“I don’t want to work that hard for $250,” says Bourne. “Now we charge about $2,800 for the same product.”
Bourne set about instituting what he described as an “extreme makeover.” He changed the focus of the studio, reevaluated what he and his employees were spending their time on, and most important, analyzed how they could lower overhead. One key area was staffing. Bourne used to have a 14-member staff that he kept on full-time wages year round. Photo One helped him better identify when he could function with fewer people, when he
needed more help and when he could get by with part-time workers. Now, during the busy seasons leading up to the
holidays, Bourne staffs 14 full-time workers of which four are photographers, four are retouchers and the rest are sales and support staff.
In January, he scales back to nine full-time employees and six part-timers. The reduction in labor costs has been dramatic, to say the least Bourne also took advantage of Photo One’s organizational categories and the different ways the software recommends tracking projects for the photographers and the salespeople. Its electronic calendar features helped the studio be more efficient with scheduling, which, in turn, has actually helped them create better images because they are better utilizing the camera room facilities.
With reduced overhead, more efficient operation and higher-quality products, Bourne’s next step was to raise his prices. “We were able to substantially raise our prices without cutting back on the total amount of business,” says Bourne. “We’re going to raise them again at the beginning of the year.”
So, has all this affected the bottom line? Well, it has and it hasn’t, depending on how you look at it. Bourne’s studio did about $1.2 million in gross sales in 2000, a little less in 2001, and still less in 2002 as the recession dragged on. In 2003, with the help of Photo One, estimates at press time indicated that Bourne will be back to his pre-recession figures of roughly $1.2 million. But he hasn’t just gone back to square one.
“We’ve got money in the bank for a change,” he says. “We’ve done basically a 180-degree turn in our bottom line.”
With the same volume of work and similar numbers in gross sales, Bourne has found higher profitability by refocusing on areas that are better money makers. It’s not hard to see how increased pricing, reduced overhead and more efficient workflow can produce more profits, even with similar overall sales numbers. And all it took was a stern, introspective look at the business, with some help from a good studio management tool, of course. “You truly don’t know what you don’t know,” laughs Bourne. “Now we know what we were missing all those years.”
Check out Photography by David on the Web at www.pbdphoto.com.
Rebound and bounce back:
The rise, fall and resurrection of Michael’s Photography
by Stephanie Boozer
With business seemingly booming and his days filled with portrait sessions and weddings, Michael Meurot, M.Photog.Cr., of Michael’s Photography in Norfolk, Neb., was happy as a clam. He had no idea the trouble his business was in until the mid-1990s, when he noticed a decrease in profits and a slight falloff in business.
With a staff of 16 but only one photographer, Michael’s Photography had grown too big, too fast. In 2000, the profit margin was less than $2,000, despite billings of more than $300,000.
“That’s when I realized I needed to make better decisions,” says Meurot, whose love affair with photography began at 16 with his first Kodak Instamatic camera. He quickly took over as school photographer in high school, and moved on to work for local pros throughout college.
“I promised myself I would do it until I didn’t like it anymore,” says Meurot, who was 21 when he started his solo career.
Twenty-three years later, he has no intention of slowing down. “I literally started from scratch. I moved to Norfolk and hung out a shingle, not really knowing anyone here other than my grandparents.”
About two hours outside of Omaha, Norfolk was a good climate for Meurot’s budding business. In 10 years, he’d outgrown his original space and was able to buy a building and convert it into a studio. He added in-house lab facilities and embraced the digital age. His was the only studio in the area that had a Kodak Prism system, and he was shooting a multitude of senior and family portraits, as well as weddings. Those were the salad days, before Meurot realized the effects of his rapid growth on his bottom line.
“In a sense, you could say I built the business twice,” says Meurot. “Once from scratch, and a second time as a recovery.”
Meurot started paying more attention to his actual costs and expenditures, and even the structure of his business.
“I just had too many employees,” he explains. “I had people doing retouching, spotting, everything except shooting. I applied some common sense, and then took a management class.”
Meurot also hired an independent consultant who worked with him by phone once a week. Meurot was able to identify three main areas where things had simply spun out of control. The first was that he went digital too early, when the equipment was too expensive, and a lot of that expensive equipment didn’t exactly meet his needs. In response, Meurot began slowly replacing his equipment with more cost-effective pieces that met the specific needs of his studio.
With the right equipment in place, Meurot’s costs were lower overall, and the studio began to run more efficiently.
“I made the digital decision based on hopes and assumptions, rather than solid facts and good business analysis,” says Meurot. “We weren’t the first in the state to go digital, but we were close. I just assumed that everyone would flock to the studio afterwards, but that’s not what happened.”
The next mistake he identified was opening a second location, and the purchase of a declining one-hour photo lab. Neither venture was profitable, and the extra overhead terminated both projects in a hurry. Instead of counting on a second studio to build business, he’s hiring and training other shooters to shoot out of one location. “I would never have thought of that 10 years ago.”
Finally, Meurot says he simply didn’t know how to be an effective employer.
“I’m a nice guy and people like me, so they tend to stay around for a long time,” says Meurot. “We didn’t have job descriptions or evaluations, and I didn’t know the proper way to address raises and incentives. We just got overstaffed that way.”
The consultations and management classes helped Meurot bring the staffing in line, and he now has the right number of people to handle the workflow without stretching his budget.
“For the first time in 23 years, I have a budget, a marketing plan, the right people, and the right set of tools to manage my employees,” says Meurot. It hasn’t taken long for the changes to pay off.
One effective organizational tool for Meurot has been StudioPlus software (www.studioplus software.com), a package designed specifically for managing photography studios. The application tracks everything from the digital workflow to scheduling, and generates that all-important financial information.
“Michael’s Photography needed integrated software to manage the entire operations of their digital studio, from scheduling to invoicing to managing their digital workflow,” says Doug Keillor, the StudioPlus
Software support manager who worked with Meurot.
“Because the financial tracking of StudioPlus occurs automatically as orders are recorded, the software has provided them the key analysis information needed to improve their business.”
Each month, Meurot can see exactly how his business is doing, and has better data for making informed decisions on spending and marketing.
“If I had had a decent profit and loss sheet staring me in the face each month, the decline of my business would have been more obvious,” explains Meurot.
“As photographers, we’re great with people, and great behind cameras, but we don’t all have the business skills that we need because they’re not as fun as the creative part.”
Meurot’s advice? Learn as much as you can before your business gets in trouble. While Michael’s Photography is still on the rebound, the bottom line is definitely on the up and up. The studio currently handles about 30 weddings a year, with prices ranging from $400 to $4,000 ($400 gets 45 minutes of time and a set of proofs). The rest of the business centers around portraits, with session prices varying for seniors, children and families.
With his current plan of action, Meurot predicts 50 percent growth each year for the next three years.
“Don’t despair,” Meurot advises struggling photographers. “I’ve watched lots of very talented photographers go out of business because they didn’t have the tools they needed. We all make mistakes, but the good news is that most of them are recoverable.”
Visit Meurot’s Web site at www.michaelsphotog.com.