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3 - Financial Skills
Business Plan
Financial skills include having a business plan, understanding
of a profit-and-loss statement, and lastly, policies and paperwork.
Doing a business plan is essential.
While doing a business plan is here under financial skills, business
plans also include many other topics.
Business plans start off simply, and gradually become more refined.
Even a one-page business plan can help you grow your business.
Here's an example:
Pet Photography Business Plan
Google Search: "business plan" software
A business plan is a road map.
While getting lost because you don't have a road map, can be
fun sometimes, that's not the way to start up a business.
Get started on a business plan.
Profit & Loss Statement
The second financial skill you need to have is an understanding
of a profit-and-loss statement.
If more photographers understood how much money they need to
charge to pay their overhead, they would be empowered to demand
more for their services.
However, many photographers, for the few years that they're in
business, subsidize their clients.
Jane is a wedding photographer.
Let's say Jane has personal expenses of $2,000 per month.
Her business expenses are $3,000 per month.
Jane has to make $5,000 per month, or $60,000 yearly, to pay
her personal and business expenses.
Jane expects to book the following number of wedding jobs.
| January |
1 |
| February |
1 |
| March |
1 |
| April |
2 |
| May |
4 |
| June |
8 |
| July |
4 |
| August |
2 |
| September |
2 |
| October |
1 |
| November |
1 |
| December |
1 |
| Total |
28 |
Dividing her yearly expenses of $60,000 by 28 jobs, Jane has
to bill each client at least $2142.
Jane expects to work 2036 hours.
| Preparation for each job |
28 x 2 hours |
56 |
| Weddings |
28 x 5 hours |
140 |
| Postproduction |
28 x 5 x 8 hours |
1,120 |
| (8 hours for each hour
of shooting) |
| Marketing |
10 hours per week
x 48 weeks |
480 |
| Office- billing, taxes, etc. |
5 hours per week x
48 weeks |
240 |
| Total hours |
|
2,036 |
Jane work week averages out to about 42 hours a week.
Of course, in June, her busiest month, she'll be working many
more hours per week.
Jane finds that she needs to making about $30 per hour to cover
her personal and business expenses.
$60,000 ÷ 2,036 hours = $29.47
She should also factor in profit.
Profits can be used by Jane for such items as college savings
for her twins, and the expansion of the business by hiring other
photographers.
You don't need an accountant to create a profit-and-loss statement.
Use the National Press Photographer's Association
Cost of Doing Business Calculator.
BTW—you don't need exact figures to get started.
Just sketching out your figures will be beneficial.
You'll refine your financial picture as you go along.
Go to:
NPPA Cost of Doing Business Calculator
Independent Photographer's Toolkit
The Value of Photography Debra Weiss
Paperwork & Policies
Paperwork and policies is the third financial skill you need
to have to be a success.
Do you want to get paid?
You have to have policies and the corresponding paperwork in
place.
Let's look at two aspects of billing.
How do you invoice your clients?
You can use software, Blinksale.
What sort of payment policy do you want to have in place?
You need a policy about enforcing the timely payment of your
invoices.
To continue, use the menu
above, or click Next below.
