Portrait studio start-up

[banderson]

Okay, so for the past few months I've been working on a business plan to start my own portrait studio. I have been making spreadsheets of the initial start-up and monthly costs (Still in a very preliminary stage) I plan on focusing on senior portraits, as well as wedding and event photography. I feel like this would be a good start.

However I do not have any idea what possible returns I would be looking at in the beginning. I am definitely not expecting a huge return in the start, but I am going to be pitching the idea (Including preliminary financial projections) to an investor. The studio location would be close (Within 10 miles) to at least 4 high schools, with many more in the surrounding areas.

So does anyone have any previous experience about what sort of returns I'd be looking at, providing I do everything right??

Thanks!!!!

 

[photoentrepreneur]

Hi

Thats a broad question. What are you charging for your portraits? Are you printing them or doing digital files (Old School photographer might not like this one, but I'm all for it.) Are you going into the Schools (I made $4000 in a day shooting headshots (200 students nearly killed me!)). If it was me, I would approch the schools first before getting your studio and see if you could advertise and shoot there. You will need insurance, checks and planning.

Good luck

 

[12sndsgood]

have you looked at what your competition is charging? your sucsessful competition, see what they are charging and then figure out what your costs are going to be to figure out what you will need to charge to keep your head above water. and then you at least can know how many clients you need to bring in to stay going.

in my area a senior portrait runs anywhere from $50-$1000 dependnig on the company so its really an open ended question. your client based is so dependant on who you are and how well you are generating business that id imagine this would be a hard question to answer.

 

[MLeeK]

You are aiming at seniors-your research needs to include the local schools. They have everything from no expectations on the senior portrait to requiring that they be taken by THEIR senior portrait. The specs that they require can be so incredibly detailed as to measure exactly where the head will be positioned in the image by giving you exact measurements.... As the entrepeneur up there mentioned advertising in the schools-a FEW will allow you to do it, but MANY will charge you to do it and still more will not allow it as they require THEIR photographer. You need to plan your work around for the NO's and your budget for the ones that charge-or work around... The schools can be a profitability killer.
If they do require that the senior use THEIR photographer find out how and when you can bid that contract. You also need to know if they expect you to produce the yearbook for them-many photography studios do produce the yearbook and that can require you providing the school with software AND---cameras!!

As to what to expect for return you have to do your own math. I can't tell you what to expect as it's all based on YOUR price point, YOUR marketing program, YOUR projections for the number of clients you will shoot.
I will tell you that you have to be FAST in the computer department to make it work during that june thru october time frame. If you are shooting a wedding on Saturday and a dozen seniors during the week you are looking at having to post process maybe 3000 images a week or more. If it takes you only 30 seconds an image that's 25 HOURS of COMPUTER ONLY time. Are you fast enough to totally complete an image in 30 seconds? Then to add in a 12 hour day of wedding photography and 20-30 hours of studio shooting AND your overhead time for running the studio. That's a work week of about 87 hours-at 30 seconds an image. Wedding clients can wait a bit longer but, if you are shooting a wedding a week during that season you are only screwing yourself over and going to tick off the client. If you are shooting their wedding in July and delivering the images in December-and figuring editing time that's realistic. If you don't finish the wedding by the next wedding you are compounding each week what your work load is. Senior portraits can't wait-they have deadlines. Usually in October or November. So... How are you going to work around this time constraint? Do you plan on having a production crew doing your processing/editing? That's how a high volume studio works... There goes some profitability too...

You also need to remember that seniors and weddings are a limited time frame. I am starting a few seniors now, but in June thru October I will do seniors and weddings like there is no tomorrow. Then it's famine if you don't plan for those off months. Are you going to pay your overhead for 12 months of the year out of your 4 month busy season? Probably not realistic. So... you might want to add something to at the very least get you through the Christmas Portrait rush.

 

[banderson]

Thanks for the info! Yeah, I know it's kind of a broad question. The area is mostly upper-middle-class and the competition is making a killing (600-800 on average or more a person) including prints of course. I have contacted the schools and they have the headshot photographers, but I was mainly talking about senior portraits. At least around here, I'd say close to 75% of students around here go to private studios for their portraits, and then have them submitted to the yearbook. So thats the market I'm really going for - Plus events. Right now I'm looking into advertising in yearbooks, school papers, Malls, facebook, and what not. Mainly I'm just coming up with a proposal to an investor. I am going to try to get things rolling by early to mid 2013. In time for the main season for senior portraits. The competition is very harsh about copyright, and will give you one digital image. (A low quality one at that) So I think I would like to make it so that if you get a print of that photo, I will include a digital copy of it, reasonably sized with a small watermark in the corner with our name on it. I think the competition is really undercutting themselves here because facebook (Where they will probably post the pictures of their shoot) is a really great free advertising source and they are doing themselves a disservice by not letting teenagers show their friends the shoot on there. So, I guess another big decision is whether or not to do in-house printing. Because I am wanting to also provide prints, but I am unsure of the benefits of both. Any thoughts?

 

[MLeeK]

Ask the school specifically about the senior portraits. More often than not their headshot photographer is very different than the senior photographer-even for the headshots.

You have a good view on the digital and prints. I have more to add, but I have to go shoot a game. i'll be back!

 

[KmH]

Visit- http://www.jessicaedwardsphotography.net/

Most new businesses will have little, if any, profits for the first couple of years.
Most investors know it takes time for an investment to yield any return. The return on an investment is not the same as the profitability of a business.

Part of writing your business plan involves determining your anticipated cost-of-doing-business (CODB) and cost-of-goods-sold (COGS). Part of your CODB is the salary you pay yourself.

Researching the competition shows how you can provide a service no one else is providing. But, expect the competition to react once you get started.

High school senior and wedding photography are both pretty seasonal so you'll also have to figure out a way to generate revenue in the off season, or just be sure you have enough revenue during the wedding/senior seasons to carry you through the slow times.

Historically, well run studio based photography businesses realize profits of 15% to 20%. Since you will be relying on an investor for your startup funding, some portion of your early year’s profits will go to the investor. That means you will not be able to invest that portion of your profits that go to the investor back into the business.

Doing some basic math gives us some working numbers.

If the business has a total yearly profit of $30,000 and the business realized 15% profitability, the business will have had total revenues of $200,000 for the year. That is $16,667 a month, average, and at 4.3 weeks a month, average that’s $3876 a week average.
If the business had total profits of $20,000 at 20% profitability the business will have had total revenues of $100,000 for the year.
Profit dollar amount divided by the % profitability = yearly revenue. ($30,000 / .15 = $200,000)

Running a studio based photography business is more about doing business tasks than it is about doing photography tasks. Consequently you cannot shoot every day.

Though 3 shooting days a week is more likely we will assume you can shoot 4 days a week. It is not prudent to plan on working 52 weeks. Accounting for business and photography seminars, sick days, and other unplanned for can't-work-days lets use 48 weeks as our figure of merit.

4 days a week times 48 weeks = 192 shooting days a year. To have $200,000 in revenue for the year, each of 192 shooting days has to bring in an average of $1042 for each shooting day. Don't forget the off seasons for weddings and seniors. You may be challenged to actually shoot 192 days a year. I think the actual number is closer to 130 shooting days a year. for that $200,000 in revenue you would need to average $1540 in revenue each shooting day.

How many seniors do you think you can shoot in a year’s time? How many weddings?

 

[rub]

Apologies if I misinterpruted your statement, but if you think making $600-$800 per stundent is "making a killing" you better take a VERY hard look at your expenses, not just your anticipated revenues. Once you know what you have to earn, you can set your prices accordingly. Earning $600 from a shoot, after expenses, tax, time, product, etc. is not a killing.

Good on you for doing your research and making a business plan. Market research is critical for you right now.

Good luck!!

 

[photoentrepreneur]

I'm shocked that the average is 15-20% profit, are you sure? I really don't mean to brag in anyway but mine has always been around 50-60% for the last five years. I do pay for two studios, tax, advertising (although not much) And buy my own equipment. There are a few business models you can use.


I like your use of Facebook. Works really well in my studios.


Good luck though.

 

[KmH]

No doubt there are exceptions, but then too you are in the UK, not the US.

 

[MLeeK]

I'm shocked that the average is 15-20% profit, are you sure? I really don't mean to brag in anyway but mine has always been around 50-60% for the last five years. I do pay for two studios, tax, advertising (although not much) And buy my own equipment. There are a few business models you can use.


I like your use of Facebook. Works really well in my studios.


Good luck though.

Your profit margin shocks me. Benchmark (which isn't easy to attain and maintain) is about 35%.

 

[MLeeK]

Apologies if I misinterpruted your statement, but if you think making $600-$800 per stundent is "making a killing" you better take a VERY hard look at your expenses, not just your anticipated revenues. Once you know what you have to earn, you can set your prices accordingly. Earning $600 from a shoot, after expenses, tax, time, product, etc. is not a killing.

Good on you for doing your research and making a business plan. Market research is critical for you right now.

Good luck!!

Adding to what she said... I am guessing you're looking at your COG's only in paper, not into the EVERYTHING that goes into COG's and not your full CODB. If the average shoot is $1000 you'd be doing better than the average guy if you actually MAKE in profits to the owner $350.

check out The U.S. Small Business Administration | SBA.gov There are a lot of resources there and there will be a local chapter at a college near you that offers seminars and classes for entrepeneurs like yourself that will teach you all of what goes into these different costs. I have a feeling you aren't considering the replacement of equipment, insurances, ALL of your overhead...
Here is a good CODB calculator for photographers. NOTHING in there should be a zero and if it is, you need to think long and hard. Maybe ask some questions regarding it. Don't coddle yourself or lie to yourself when it comes to expenses-that's setting yourself up for failure.

 

[MLeeK]

You'd also HIGHLY benefit from an aspiring membership to PPA Join PPA | Professional Photographers of America
They have some incredible resources for members ranging from business guidance to insurance and indemnity.

 

[photoentrepreneur]

I can promise you it's correct.

Took me a while to perfect it but it's still growing

 

[banderson]

I really appreciate all of the helpful advice. And when I say 600-800 I'm including the cost of prints and what not. The only thing im not referring to is labor time. Plus they have 5 or so photographers per location- and do 5-10 students a day per location during that season lol they have at least two locations in our area. I feel like they're not using social media to the fullest. So I'd like to use that as a reason to get some of their business. Plus want to use stuff like living social to promote my work.