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“Shoot A LOT and figure out what you’re really good at.”

New York Magazine last week published the most in-depth article yet chronicling the sad financial downfall of celebrity photographer Annie Leibovitz. The question on everybody’s mind is how a person who’s making an annual salary of $2-to-$5 million could run into a debt of over $24 million. The Wall Street Journal blames it on her “leverage-and-live-large lifestyle.”

In a surprising move, Time Inc. has purchased a house in Detroit to serve as a long-term base of operations while its publications document the struggle of the nation’s automobile capital. This seemingly unprecedented move will allow Time’s journalists to cover the story not only as observers, but as part of the community.

The iPhone emerged this month as the most popular camera on Flickr, ousting the long-reining top uploader, the Canon Rebel XTi. We’re not surprised considering how easy  iPhone images are to upload and the improved picture quality of the new 3GS. At the time of writing this post, the XTi has climbed back to the top of the chart, but we’re betting Canon is paying attention and expect to see wi-fi upload capabilities in their DSLRs soon.

Matt Mandelsohn’s The Lesson of Lindsay is a beautiful story of young girl struggling with personal tragedy. The fact that the piece was turned down by every potential publisher, one because they wanted “happy” news stories, is just a tragedy. A Photo Editor boils it down to the “duh” soundbite that publishers still refuse to listen to.

One of Gustavo's photos from his Hogs for Kids tour. ©Gustavo Fernandez

No one has more power to change the world than photographers. Yes, yes, doctors are regarded as the human deities of the world, but with few exceptions photographers are embraced with open arms everywhere they go. Because whatever your photographic discipline, and no matter where you travel, you can barter your talent as a shooter for just about anything. Including the well being of children in a far away country.

A week and a half ago photographer Gustavo Fernandez packed up his Harley Davidson to be shipped back to California from New York. He had successfully concluded his second annual “Hog for Kids” motorcycle ride across the United States in a bid to raise money for impoverished children in the Dominican Republic, where Fernandez was born.

In his first career, as a pharmaceutical rep, Gustavo frequently contributed to Children International, a Kansas City-based organization that aids needy children around the world. When he left that steady paycheck last year and plunged into a new career as a photographer, Gustavo (like most making that transition) was watching his bank account with a frugal eye. His budget wouldn’t accommodate his annual donation to his favorite charity.

Gustavo Fernandez ©Michele Celentano

Unwilling to abandon the kids of the Dominican Republic, Gustavo went on a motorcycle ride to conjure a creative solution. He was sitting on the answer. He loves riding his Harley and he loves making pictures. Thus emerged Hog for Kids.

As he rode east to New York, Gustavo shot portraits of the children along the way — in exchange, the families contributed his room, board, and a $264 annual ($22 monthly) sponsorship of a child through Children International. This year’s successful trip took 28 days and received international attention. Gustavo says he is looking forward to riding again next year — provided he gets the feeling back in ass by then.

There is no other art form that is so versatile in it’s adaptability and portability for aiding others than photography. As Gustavo demonstrated, all that’s required is the will and the application. Your efforts don’t need to be as grand as a motorcycle ride across the country, but I do urge you to try and find a charitable application of your talent at least once a year. Not only is it good for your soul, it’s good for your career.

As Gustavo discovered, any experience with a camera in your hand, paid or charitable, will always make you a better shooter than you were the day before. He returned from his first Hog for Kids ride a markedly better shooter than before he left. When you place yourself in photographic situations that are unfamiliar and require you to adapt quickly, you’ll be improving by a significant factor. If those situations are charitable in nature, you have more latitude for mistakes, which will ultimately prepare you for the times when mistakes are less tolerable.

Photography is a unique profession that is a golden key to the world. Don’t keep it all for yourself.

From Doug's "Heaven, Earth, Tequila" project, which was a commission as well as a book and exhibition, with prints like this one now for sale on his website. ©Doug Menuez

So far in this column I have touched on general issues of starting a photography business. Now we’ll explore the mystery of profits. If you want to make a profit, stay in business, and retire some day, you need to know your break-even point. Break-even is reached when your income is equal to all your costs: production, marketing, fixed overhead, taxes — everything.

Why is this useful to know? Because every decision you make impacts your costs and/or potential revenue, so you should be evaluating all options in the context of your cash flow and whether you will make a profit. When you print a new portfolio, buy a camera, or advertise in a source book, you are taking a calculated risk that these expenditures will yield jobs and revenue. If you can’t do the math and actually calculate that risk, it’s just risky.

Most of the photographers I know take every job they can, happy to be working and oblivious to the fact that some jobs cost them more money than they will earn. This happens because they don’t know their break-even and are not factoring in all their costs.

You simply must know if you can even afford to take a particular job before you consider it. Sometimes photographers take a loss for a great assignment that will help the portfolio. But if you rationalize a low fee because the job makes you feel better, or think it gives you momentum, think again. Sometimes we are asked to do a job as a favor with the promise that next time we’ll be paid properly. I can pretty much guarantee you that this promise is a lie 99 percent of the time. Especially in this economy.

You can go out of business in a hurry working under the illusion that being busy is the same thing as making a living. More likely you are just churning and burning resources without getting ahead. If things slow down, look out. Instead, be strategic. Your goal should be to make a profit to provide financial security and funding for future creative endeavors. Therefore, each job you accept should fit into what you defined in your business plan.

The next step is to understand your profit margin. This is where you can really refine your goals, focus your mind, and get the business in gear. This often-ignored tool is simple: profit margin equals your net profit after taxes divided by total revenue.

Say your net profit is $30,000 on $300,000 of revenue. Your profit margin is 10%, not so great. Average business margins are around 30%. With that knowledge, you know it’s time to cut overhead, raise your fees to earn more, or both. If you regularly check yourself against an ideal profit margin, you are utilizing a potent tool to analyze your business costs. Now you are starting to take control of your own destiny.

Let’s break it all down another way: Say your total yearly overhead at the moment (Fixed Expenses + estimated Cost of Goods Sold + estimated taxes) is in fact $300,000. That is the minimum amount you have to earn to break even. Now look at your income and how it is billed. If you bill per ad, and you’re getting an average of $10,000 per ad for usage fee, and you shoot about two ads per month, your total annual income is $240,000 — and you are losing money.

Until you do this math you probably think you are skating by because the checks are coming in. You are short and late on some bills, but you are working. But by not making a profit, you are actually way behind and won’t last long. You shot 24 ads at $10K each, but you need to do 30 ads at that rate just to break even. To make a profit you’ll need to significantly cut costs, raise your rate, or both.

Based on your break-even today, and considering your market, forecast a number of jobs for the year that seems conservatively realistic and how much you’ll need to charge to arrive at a 30 percent profit margin. Carve that in stone or on your forehead and aim for it. Now you can be strategic about every job you accept and every dollar you spend. You can keep track of your progress easily and push yourself and your team toward that goal. Profit. Make it part of your plan.