CHAPTER 8-: This is the eighth chapter of “The Complete Guide to Starting a Photography Business.” – A lot of the owners of photography businesses claim that the corporate world does not take their enterprises seriously. While there may be a lot of truth behind those claims, it does not change the fact that when such statements are made by entrepreneurs involved in the photography business, they sound quite ironic.
This is because, a considerable portion of the budding photography business owners fail to take their own organization seriously. This argument stems from the fact that photography business owners often do not feel the need to take time off of their busy schedule and focus on allocating a budget for their business.
Photography Business Requires Budgeting
You may find yourself in a position during the formation of your photography business where the need to create a budget and adhere to it may appear non-existent. This faulty assumption once again emerges from the blurring of lines between a photography business as an institution of art and as a business enterprise that is motivated by profit. Any organization that is intended to generate revenue and yield profit must be based on a concrete and comprehensive budget structure.
Budget allocation is therefore imperative for the existence of a business in the industry, let alone the success of it. Without budgeting, it will be extremely difficult, nearly impossible, for business owners to initiate and sustain a systematic and steady development of their business. As a matter of fact, ignorance towards budget allocation practices may actually cause a business to go off track and be stomped by rivals and competitors from left, right and centre. Such is the vast significance of budgeting. In very simple words, it is the bread and butter to ensuring that a business makes the most of the funds that are available to it.
An Unique Insight Into Your Business
A lot of professional photographers who lack experience in the field of entrepreneurship often end up with a stunned and blanked expression when they are asked about their budget plans. If you turn out to be such a business owner, then you can be assured that your business is in a very poor condition.
As the figure head of the business, the onus is on you to have all the future plans concerning your business set in stone in your mind. The lack of budgeting shows you inability to plan, and entrepreneurs who are unable to plan ahead of time are the ones that are likely to be swept off their feet by the wave of competition and slide downhill till they reach the gutters of the industry.
Being at the bottom of the deck is certainly not something that you want for your business, therefore it is extremely important for you to shift your focus on budgeting before you can start paying attention to the more exciting activity of coming up with creative marketing ideas and strategies. Being a good business person is all about nailing your basics first, and when it comes to a photography business, there is hardly anything as rudimentary as getting your budget spot on from the onset.
Defining and Describing Budgets
There are probably massive clouds of confusion hovering above the subject of budget allocation in your head. What exactly does a person understand by the term ‘creating a budget’? Unlike what many people assume, creating a budget is not as simple as stating the amount of money that you are going to spend on your business activities.
As a matter of fact, budgeting deals more with the processes and procedures that you need to take into consideration to come up with the statement rather than the statement itself. You cannot simply go around stating random figures that sound appealing. Each figure you state should have reasonable logic behind it and must be backed up by extensive research work. It sounds like a ton of effort and painstaking studying, and that is exactly what budgeting is all about.
Perhaps this is the reason why naive and somewhat lethargic entrepreneurs tend to shy away from budgeting in an attempt to avoid all the hectic endeavours that they have to go through in order to come up with a flawless budget plan. If the word budget had to be defined in business terminology, then you could describe it as the set figure that tells you exactly how much you can afford to spend on a particular aspect of your business so that you can hold yourself accountable to your resources.
An Essential and Challenging Component of Business Growth
As mentioned before, setting a budget is anything but a piece of cake. You need to fully aware of where you and your photography business are in the ramp of professional growth before you can come up with figures that limit the spending. The rate of your growth and development is one of the major factors that will influence the size of your budget. The greater the rate of growth is, the bigger the budget will be in order to accommodate and facilitate further development in the future.
You can however choose to play defensive and come up with a constrained budget to put a leash on your spending and prevent yourself from punching above your weight class. Whichever the strategy you select, the fact remains that budgeting is essential to ensuring the growth and maintenance of a business.
Relationship Between Business Goals and Budgeting
Other than taking a good look at where your business is standing today and assessing its future growth prospects, you also need to take into account your goals and ambitions for the business before coming up with the budget. If you think that your business needs to make up considerable ground before it can reach the target that you have set for it, then you need to expand your budget.
In the opposite case, you can simply constrict your budget and let your business grow at a slower pace, knowing all the while that it will reach the target quite comfortable at the end of the day. When you come to think of it, budget allocation provides you with the fantastic opportunity of taking a look at your business with a brand new perspective and also assessing it from an entirely different angle.
It basically allows you to renew and refine your understanding of the photography business that you are involved in. When entrepreneurs have thorough knowledge of their business, they are more than likely to succeed in the long run.
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What Makes a Budget Effective?
You can set your goals according to the budget or you can set your budget according to the goals. Both are valid ways of conducting your business. When you are determining a goal for the annual campaign, you must first figure out the purpose that your budget will serve.
For instance, if you are a professional photographer who is relatively new in the photography business industry, then your funds should be exhausted for the purpose of making some noise in your scene or in other words, establishing your company’s identity and improving its visibility in the market place. The budget that you set therefore should be catered to meet the goal of shedding more of the spotlight on your business.
Most of the money that you have available to you should be spent for the sake of increasing the exposure of your business. If you are able to meet this target by the end of the year, then you can be assured that your budget allocation or budgeting was effective. More often than not, businesses fall short of their targets but that is no reason to think that the budget plans have undergone failure. As long as your business is on track to fulfilling the budget goals, it can be assumed that there is hardly anything wrong with your budget planning.
Financially Accommodating Sales and Marketing Tools in your Photography Business
During the initial stages of your photography business when you are trying to create some waves in the market place, your budget should be focused on allowing your business to build its sales and marketing tools. Sales and marketing tools are the most effective media through which you can draw the attention of the industry figures towards your business.
In other words, the budget should be spent in creating the foundation steps that are needed to hog the spotlight and convince people into believing that your business is credible, legitimate and worth the place that it has secured in the market place. The build up or the development of these core marketing and sales tools should be the priority for you during the first few years of your photography business.
Just because your budget is meant to be marketing centric during this period of time, it does not mean that you have the license to spend an overwhelming percentage of your money to feed your marketing and sales agenda. Considerable chunks of the budget must be distributed in the cause of improving the quality of your products and the quality of the services provided by your employees. If your services and products do not back up your catchy marketing taglines, then all the budget that you have spent in creating and enhancing marketing and sales tools will simply go to waste.
Changing the Budget with Growth of your Photography Business
After you have spend a decent number of years in the industry gathering experience from every nook and cranny of the realms of photography businesses, you can plan on changing the motives and the dynamics of your budget to suit your renewed goals and ambitions. The business plans that you had for your photography service company during the first few years of the business will surely not remain the same after a period of 7 to 10 years have passed by.
As a matter of fact, you are highly recommended to change the business strategies and your budget allocation practices in order to keep up with the pace of the latest developments in the industry. Failure to do so will be interpreted as your inability to adapt, and the lack of adaptability is what leads to businesses going bankrupt. Once you spent a decade in the industry and survived the competition and thrived in it to a certain degree, you are likely to have a stable flow of revenue and an impressive collection of clients who are satisfied with your work.
In other words, this is the stage when you would have achieved your initial goal of creating an identity for your business and making a mark in the industry. At this point in time, your focus should shift to maintenance or sustainability of the growth rate that you have triggered, so that your business does not decline and continues to develop with time.
If you spent the first 3 years chasing the coveted championship title in the industry (which in this case is a decent portion of the market share), then your next objective is to defend the title for as long as you possibly can without giving up on your hopes of winning a bigger title in the not so distant future (a bigger title refers to a greater market share in the industry).
Changing Budget with Increase in Photo Creativity and Expertise
It is often said that you are required to change your budgeting strategies when your business is big enough to flow into a different sector of the photography industry. While this statement is true, it fails to mention the fact that budgeting tactics must also be changed when you are looking to stay within the same sector of the industry but are willing to take on more challenging and creative assignments.
For example, if your niche is wedding photography and if you have been capturing beautiful moments in normal wedding ceremony settings around the country, then you might want to take on the challenge of working for couples who have eccentric and innovative settings for their wedding ceremonies, such as a wedding ceremony on a cruise ship.
This not only exposes you to further experience in the field, but it adds to your expertise to a great extent. Being a part of challenging and creative assignments allows your employees to improve their skills and prepare themselves to meet the highest standards in the industry. The more creative you will be with your work, the better are your chances of enhancing your client roster.
An Example of Budget Modification Based on Revamped Photography Expertise
To make room for this creativity, you must modify or expand your budget in one way or the other. Going back to the previous example, if you want your photography business to be the very best at covering wedding ceremonies on cruise ships, then you need to set aside a certain portion of your funds for the purpose of training your employees or handing them out educational material on how to perfect the art of taking photographs on board.
You cannot expect your photographers, who are used to taking snaps at backyards, churches and gardens, to all of a sudden be experts in sea or ship photography. Hence, you need to invest a good amount of money to make sure that they are ready for the challenge. This change in investment should be planned out in your budget, or else you will end up losing money that could have been spent far more wisely.
Budgeting for National Accounts in a Photography Business
As the degree of your creativity keeps increasing with each assignment, you will find yourself increasingly eligible to take your photography services to the national level. In other words, the augmentation of your specialization skills will one day allow you to take into consideration the scheme of working on national accounts. This is what you call taking your photography business to the next level or introducing it to the big leagues.
With the privilege of working in the big leagues comes the responsibility of changing your budget to fit the monumental demands of working for national accounts. Allocating your funds for national accounts is certainly not the easiest job in the world and it actually may turn out to be the hardest thing that you have ever done as an entrepreneur working in the field of photography. The margin of error with such kinds of work is extremely narrow, therefore your budgeting has to be picture perfect in order for you to conduct your operations as smoothly as you possibly can.
If you feel that the task of coming up with such an important and extensive budget is too overbearing for you, then you could always resort to the help of a top-notch consultant. Although you have to reimburse the consultant generously for his or her high quality services, it goes without saying that the service you will be receiving will be worth every penny. Make sure to include the expenses of a consultant in your budget plans as well. With a top-notch consultant at your disposal, you will be provided with assistance in creating visuals that will prove to be instrumental in attracting a national client base.
Budgeting To Facilitate Greater Market Penetration in the Photography Industry
If you have your body of work all figured out and are ready to launch the product in the market, you need to consider hiring a marketing assistant or consultant who can guarantee utmost efficiency and effectiveness of your marketing and sales strategy. During the initial stages of your photography business, you are required to invest money in creating marketing and sales tools. When you are in an advanced position or when your business is ready to dominate the market and the economy, you need invest in a marketing consultant.
The introduction of the marketing consultant will once again cause an alteration in your budget plans. This is for two simple and specific reasons. The first has to do with bearing the cost of the marketing consultant. Much like the budgeting consultant, a marketing consultant surely does not come cheap. You must reward the consultant handsomely if you want to get the best services out of him or her.
In addition to that, the marketing consultant is likely to bring about drastic changes in your marketing and sales strategies. More often than not, the marketing consultant will aid you in lowering your marketing costs, and thus you will be required to readjust your budget plans to accommodate the new changes that have been brought into your business.
Accounting for Inventory Substitutions in a Photography Business
There will be countless changes that you have to adapt to when your business grows at a healthy rate. Among them, is the change in the inventory that you have. This is particularly true for photography businesses where you need to make sure that your cameras and camera equipment are all up to date and in sync with the recent developments in the field of photography technology. Using old and antiquated cameras, accessories and equipment will stunt the growth of your business and deteriorate the quality of your product and services. Thus, it is imperative that you take into consideration the expenses of buying new inventory when coming up with a complete and extensive annual budget plan.
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