Marketing: Finances - MPN

Financial planning is just as much an important part of your marketing plan as choosing what colour folio you want, but how much should you spend on marketing?

This is a conundrum that foxes even the most experienced marketing directors at times. The answer depends on how much you can afford and how much you earn, or predict you will earn from your photography. On average companies spend 10% of their profit on marketing although there is always going to be exceptions to the rule. The highly profitable multinational American retailer 'Walmart' apparently only spends around 0.5%, whereas equally successful businesses spend up to 30%, it varies depending on what the businesses' financial priorities are.

As is the case with most businesses, you will be required to invest a substantial amount of time and money into your marketing efforts when you start out, especially in comparison to what you earn. The biggest outlay is going to be your branding portfolio and website. It should be a motivating thought that the more time and money you allocate, the sooner you'll reach your objectives.

Let's look at some approximated but not unrealistic figures for the first five years of a photographer's career. As we have discussed, many photographers diversify any income from other related fields. The profit that is being referrerd to here is profit from your own photography after overheads and before tax.

Don't be put off by the low earning potential initially. As I pointed out, photography is an extremely competitive industry that might require other means of income in the first years.

10 reasons why your marketing might not be working

How can you tell if your marketing is working? I suppose you might think the answer to that is obvious: “By how much money I'm earning or how many jobs I get”. Fair point, but there are other ways to measure effectiveness.

It can be difficult to quantify the effectiveness of the specific marketing tactic although it's always worth asking people how they found out about you. As you establish yourself in a particular market, the answer as to how you were found gets more wooly. This is a good thing. When the answer is simply that they've heard of you, that means your marketing is working. Having said that, there are certain barometers that give a good indication of the success of your overall marketing plan.

If the product (you and your photography) Is up to standard, a well thought out and proactive marketing strategy should get results. If you measure the effectiveness of your own plan and feel disappointed, double check its not for any of the following reasons:

1. Your photography is not of a high enough standard

2. Your photography is not memorable enough

3. You are promoting your photography to the wrong market

4. Your photography is not relevant to the market you are promoting it to (While the previous reason implies that there is a market for your photography, this one implies that there might not be)

5. It's not clear what you're offering, that is to say you haven't established recognisable signature style, or found your niche.

6. Your work has been badly edited

7. Your marketing is not consistent in quantity; It usually takes more than one speculative meeting or advertisement to secure commission. You need to remain permanently visible in order to be in people's minds when a suitable job comes along. Apparently it takes seven direct marketing approaches before acknowledgement.

8. Your marketing tools are not consistent in quality. You may have an effectively designed website but perhaps your portfolio is badly edited and presented. Or you might send out a fantastic email about your website, but it is impossible to look at without crashing.

9. If you have started to get work, something is putting people off of using you again. Are you getting a reputation for being unprofessional or rude? Or did you show a lack of confidence on a shoot? Word travels fast and it's a very small world.

10. Your pricing is wrong.

Once you have you have settled with your financial plans the next step is to slowly build up your profession so that it'll eventually create some profit. But how do you do that? Well we have to figure out your pricing, and how that compares to the competition in your area, not only on how much they are charging for their work, but also the standard of their images, and you want to find a happy medium between both. Figuring out how much you're going to charge for your work can be quite challenging, but that's why I am going to try and explain what I have learnt so far. How much you think your work is worth compared to how the world perceives how much it's worth could be very different things, and that is why researching other photographers and even your own work is pretty essential in this process. Now at the end of the day, your pricing will be personal to you and how much you put into your work as well as what your financial plans and income goals are, so on that note, to begin managing your prices there are other more technical factors that we should think about, such as;

A- Business Overheads (Overhead expenses include accounting fees, advertising, insurance, interest, legal fees, labour burden, rent, repairs, supplies, taxes, telephone bills, travel expenditures, and utilities. There are essentially two types of business overheads: administrative overheads and manufacturing overheads.)

B- Personal Survival Income (all the costs and expenses you would incur in a typical month/year such as your rent, your utility bills and your monthly grocery bill etc...)

C- Amount of days expected to work each year. (you can do this monthly, weekly or yearly)

Once these are considered, there is a little bit of maths we need to do *anxiety rises*, don't worry, luckily its through this simple equation; A + B divided by C = minimum day rate required. Of course, this is just a basis of how you can work out your income, so you can personalise it to what fits you and your experience. If you're unsure on how many days you will need to work but know what your daily rate is or vice versa , you can invert the formula to find a rough idea of each of those points.

Now what are you going to actually have to factor in when planning the cost of a photoshoot in itself?When planning a shoot, it is vital to know how much to charge. Plucking figures out of thin air is dangerous; there is only one thing worse than not being paid, and that is making a loss. Make sure that you have a plan so that in a worst case scenario, when all else fails, you do not lose money, also if someone asks you for a quote on a job, you need to be able to quote a competitive rate whilst still making a profit. You need to be aware that charging too little makes you sound cheap (and therefore not very good) whilst being realistic about the value/quality of your abilities.

Here I will give some more detailed information and sources on things to consider when it comes to costs and money management in your business.

Costs involved in running your photography business

Firstly let's think about what costs are involved in running a photography business. Some examples could be:

• Rent / Mortgage on studio

• Utilities Bills / Business Tax

• Advertising costs

• Film

• Retouching

• Prints / CDs / Creating PDFs

• Assistants

• Transport

Assistant Rates

Think of what you would be happy to charge as a freelance photographic assistant? Remember that you will be freelance, or if you are offered regular work, can you afford to charge less?

For example where I live, the price here in Leeds is around £75-£120 per day.

Consider

How much do you need to earn in a year to survive?

This includes:

• Rent

• Food

• Utility and phone

• Travel

• Disposable income (entertainment and shopping etc…)

Make it happen;

What are the tangible items that you need to operate as a photographer?

• Method of contacting:

  • Business card

  • online presence

• Legislation:

  • Quote/Invoices

Example of a digital invoice:

That is excluding things like travel and accommodation, which you can factor into the total or as a separate item.

• What happens if you don’t get paid? What is the protocol?

  • more invoices (final)

  • ‘making a court claim’/ also known as ‘small claims court’ (is there a cost?) https://www.gov.uk/make-court-claim-for-money/overview Can be anywhere from £25.00 - £595.00, - you can claim interest on money owed. Not guaranteed to be paid, in which case you will not get your court fee back

• Transport: do you have access to a car/van - could you hire if needed? Are you insured, do you need insurance? http://www.esurance.com/insurance-resources/commercial-car-insurance-myth

• Equipment: what do you need/what do you have?

• Insurance: do you need it? http://www.startups.co.uk/working-from-home-what-insurance-will-i-need.html

The table below sets out a framework for artists’ fees for work such as commissions, residencies,

community projects and gallery education, that reflect artists’ career stage, experience level

and overheads, take account of the nature and costs of self-employment, and that align artists’

practices with comparator professions.

Day rates are based on 177 paid days’ work for an artist per year. This figure takes into account

time spent on pitching and tendering for work, studio and research time, training and

professional development time, administration and accounting, illness, family commitments and

holidays. If an artist is likely to gain fewer days’ work, the day rate can increase accordingly.

Rates exclude project specific expenses and VAT where applicable.

Whilst these rates provide a general guide, we recommend each artist takes account of their

unique circumstances and overheads and uses The artist’s fees toolkit to calculate a

personalised day rate when preparing quotes for work.

Once your buisness starts to thrive and you get a significant amount of income in, you can start charging more for your work-the more demand, the more money, meaning higher quality equipment, more money on storage etc. Your prices must keep up with your demand and reputation. Typically these kinds of topics can be the more boring ones to discuss but vital in the process of making a passion into a job, I hope this information was somewhat helpful and interesting enough for you to stick around for my next blog post!