Just today I saw a headline that the portrait studios within Sears and Wal-Mart are quickly and suddenly shutting their doors and going out of business throughout the United States.
These portrait studios compete on price and even with the large amount of foot traffic that each of these studios received it was not enough to be profitable. The reason that they are often so cheap is that they have always been loss leaders for the stores. It is a way to entice people into the stores who will mill about and purchase other more profitable items while they wait for their photos. Even though they were not really expected to turn a profit, they were a bit too much of a loss to keep them open. CPI Corporation, which owns the Portrait Me Studios, reported a loss of $20.2 million at the end of third quarter last year. That’s a whole lot of $10 8×10’s to sell to get out of that hole.
In the 1970’s and 1980’s these types of portrait studios flourished. It was an affordable way for most families to have portraits of their family or children. Then we entered the digital age. Fast forward to 2013, you can pick up all the gear you really need to be an on-location natural light photographer for less then $5,000. That includes software, a computer, a camera, and a few middle of the road lenses. That’s it. The barrier to entry for this profession is incredibly low. These types of companies could not compete with the large influx of cheap photography flooding the market. They were still focused on selling $10 prints.
So what can we learn as an industry from today’s events?
- You are running a business. A business is created to make money. If you are deducting your expenses on your taxes, you better be darned sure that you get to the place where your business is making money or the tax man is going to come a knockin’ for back taxes and penalties. Year after year of losses, even at a tune much smaller then $20 million dollars, is not how a business should be run.
- If large chain studios that are shooting multiple sessions a day cannot have a sustainable business with $10 prints then you probably can’t either. It is imperative that you understand your finances of your business. Know how to create a profit loss statement, know how to plan your year with an income and expense sheet, make a budget and for goodness sakes keep track of your expenses. Learn what goes into pricing your work. An 8×10 that you are selling for $10 is not really a 500% markup because you bought it for $2, you need to account for your time. Have a plan for becoming a profitable business, including knowing where your pricing needs to be to maintain a business.
- Who is your target market? Who is your competition? My competition is not someone down the street offering the disc for $75. My competition is new furniture, a nice weekend getaway, home improvements, or other extras that someone may spend their money on. My clients value artwork, albums, and wall art and will spend quite a bit of money on it. They do not have the time to mess with a disc of images and print their own images. Decide who your target market is and who you want it to be. If they do not match up, learn how to build your business to attract those types of clients.
- Differentiate your business. You must have cohesive branding and offer something more then prints and digital files. I believe that in the next few years even offering canvases will not be enough to stand out from the crowd with the availability of them in most big box store photo centers. When you are offering a different or specialized service you do not compete on price and people interested in that service will seek you out and they will pay more for it.
It is possible to make a good living as a photographer in today’s market. It takes determination to continually and always keep improving your craft, a tireless drive to continue networking and marketing your business, always thinking about every aspect of your business and evolving the client experience to be the best that it can be, knowing your numbers and how many sessions/sales are needed to show a profit and pay yourself a salary. It’s hard work, but it can be done.
A passion of mine is numbers and sales and it is impossible to have a profitable studio without those two things. If you are struggling with your pricing or sales process I am happy to tell you that I will soon be offering private mentoring sessions to personally help you build your pricing, marketing, and/or sales plans. I will be announcing those details in the next two weeks, so stay tuned. There is room in this industry for all of us to succeed.