livebooks blog

Are you keeping an eye on your bottom line? ©LaCour

Many of my favorite photographers have built successful careers on being excellent observers. Their images are powerful because they watch, anticipate, and press the shutter at the decisive moment.

But being a keen observer of people is not enough. To succeed in the business of photography, you must employ a careful combination of observation skills. You must be an excellent observer of people AND business. To succeed, you must watch your business –- know it inside and out. As John D. Rockefeller said, “Everything that is watched improves.”

Rockefeller knew exactly how much it cost to extract, refine, and deliver a barrel of oil. He was fully aware of all his costs. Knowing this information –- and acting on it –- gave him a competitive advantage. He knew how to price a barrel of oil to turn a profit.

As a result, he implemented cost savings measures like manufacturing his own barrels and starting his own transport company. By carefully observing the data that mattered, Rockefeller made Standard Oil wildly successful.

The success of your photography business also depends on your observations. Are you watching each area of revenue and cost? What things are you tracking? What systems do you have in place to help you measure and manage your business’s success? Here are three areas that you should be observing particularly carefully.

1. Calculate Your Profitability

• First, create a price list of all your “items” (individual products and services you offer) and calculate profit margins for each item. By understanding profit margin, you will ensure that you’re making money on everything you sell.
• An item’s profit margin is based on “Cost of Goods Sold” (COGS). In order to calculate the total profit margin on packages/proposals you create for clients, identify a COGS for each item on your price list.
• COGS for an item is calculated as the total direct expenses incurred in the production of a good, including the cost of materials used to make that good and the cost of labor to produce it. COGS does not include indirect expenses, like marketing, accounting, and shipping.
• Knowing the COGS will help you determine which products and packages are turning a profit. Subtract an item’s COGS from its sales revenue to determine the gross profit it earns.
• Net profit is the difference between COGS and indirect expenses from sales revenue.

2. Identify and Track Referrals

• Referrals are the lifeblood of many photography businesses, especially wedding. In a good economy, fostering strong referral sources is the most effective growth strategy. In a bad economy, it’s critical.
• If you don’t know where your profitable referrals are coming from, you’re wasting time and money. For example, let’s say five colleagues in your community are responsible for referring 60 percent of last quarter’s business. Don’t you want to treat those referral sources differently than the florist down the road who hasn’t referred anyone? Tracking your referral sources allows you to invest valuable marketing resources into the right people and groups that will give you new business.
• Tracking referrals is a detailed process — one that requires organization and automation to be effective. You can use simple Excel spreadsheets to track referral sources and leads. There is also more sophisticated studio management software available. The good news is that both options can be cost-effective for even the smallest studio.

3. Create a Marketing Strategy and Track Your Success

• Marketing can seem daunting at times, but even a simple marketing strategy can have a beneficial impact on your business. Here are a few things that most successful businesses strategies have in common.
• First, a contact database. The importance of maintaining an organized contact database can’t be stressed enough. It may sound like a basic tactic, but trying to grow your business without a contact database is like trying to drive a car without an engine. If you want to grow your current relationships and develop new ones, you must keep track of communications with every client, referral source, partner, and prospect with whom you interact.
• Second is email marketing. Email communication is the name of the game these days. And with the help of your growing contact database, you can easily reach thousands of prospective clients with a single key stroke. Keep your contacts up to date on events, new services, awards, specials, and other important information with emails. That way, you will already be on their mind when they are seeking photography services.
• Finally, make sure to track your database efforts. Some automated solutions allow you to track the read and response rate for email blasts through easy-to-read reports. Whichever way you decide, be sure to regularly review your efforts to understand what’s helping you drive revenue and what’s not.

©Edmonson Photographers

The reason I started in photography is that my father is a photographer and my grandfather, who did sales for photographic equipment, also did photography as a hobby. By 1983 my dad opened his own business, and at that point his father and him started these stock photography trips. My dad submitted my grandfather’s photos for a book that ended up becoming the number one best-selling book in the 1980’s. That got my grandfather pretty excited. So they spent the rest of the time until his death running the photography company together. And that’s kind of what I grew up with, with both of them shooting together.

Originally I had no desire to grow up and be a photographer. But when I got to college, I suddenly realized that this is the lifestyle I’m used to. Being a photographer is unique because you have permission to go places you’ve never been. Every day is different and you work with all these different creative people. So one night, I said to my father, I’ve never expressed an interest in this, and I’m still not sure, but would you support me while I explore photography? And he said, absolutely. It’s a great gift he gave me.

I ended up getting a degree in film, so I could still be different from my father. My pictures can move, while his are still. But that was just out of my youthful need to be different. By the time I was 28, I had gotten to the point where I could work with my father, rather than for my father. Plus, I’ve always been a little envious that my grandfather and him worked together. So when I moved back to Dallas from San Francisco, I ended up saying to my father, let’s do photography together.

What we found works best for us is to divide up our roles and responsibilities. My father, for instance, handles all of our Photoshop retouching and all of our printing. That’s one of his talents. I try to handle our new business relationships, our marketing, our websites, our blog, and those kinds of things. That helps us keep enough energy in our own personal batteries to do a good job for our clients.

©Edmonson Photographers

As far as family-run photography businesses go, working with my father is different from a husband and wife working together, simply because we’re not the same age. Here I have my father, who’s been in business for 30-plus years; he has wisdom from longevity. He’s seen a lot of different things. At the same time, I have a youthfulness and the ability to relate to clients on a different level. For example, when my dad flirts with the bridesmaids, it’s more of a fatherly kind of thing than if I do.

One of the things that I appreciate about my dad is the fact that some people kind of get stuck in doing the same thing. Once they figure out that something that works, that’s becomes their signature and they don’t do anything else. My dad has been really good at reinventing himself, almost like Madonna, throughout the years. Sometimes we play a games with the bride and say, “Guess who took what photos.” Sometimes the wildest ones, the most energetic ones, are ones that my dad took, but the brides would have guessed it’s me. It’s fun because he still has that youthful spirit.

I think in any relationship, the biggest question is, are you still growing as a person? Whether you’re husband and wife, whether you’re brother and sister, whether you’re father and son. We can all learn from each other. You just have to have that open heart and open spirit. Not only do my dad and I work together, we live together, too. It’s just him and me. We are literally around each other 24/7. We’re very blessed by our photography business; it gives us a lot of opportunities to do things together.

©EDMONSON Photographers

We have a wedding site, an Indian wedding site, a site for David, a site for me, and an associate site for weddings. Then we have a commercial site, a portrait site, a catering site for my brother-in-law who is a chef, an Italian event site for two of my sisters who are living in Rome, and a couple others. We use our sites and the blog to be able to cross link and drive traffic to each other. We also invested in the liveBooks SEO service and now about a third of our business comes from people who are just searching for us on the internet. Another third of our business comes from vendor referrals — people in the industry who we work with. A perfect example of that is the photographer Robert Evans. He shot Brad Pitt’s wedding simply because he had given images back to a florist he worked with. No one had done that for that florist before, so he stood out and they recommended him for the wedding. So if you can find ways to give back to your vendors, it always pays off because they’ll send you some business. The other third of our business comes from word-of-mouth bridal referrals and people who endorse us in the community.

We advertise on a few exclusive websites and we’re part of organizations that help us create buzz, like WPJA, WPPI, and PPA. We also advertise in publications in our local markets, but the best way to get publicity in magazines is to just send them images from real weddings. That’s a great way doing editorial work, and it also helps the magazines out. My basic analogy about your business is, it’s like you have a container that you want to put a bunch of water in. Some of the cups that you’re using are big cups, and some are Dixie cups. But the more you’re pouring in, the better off you’re going to be. So whether it’s SEO or word of mouth, every little bit helps.

Then when potential clients come to us or to our websites, we found that for all our clients, when they initially have contact with us, they want see content that is very targeted towards exactly what they’re asking us about. If they ask about baby photos, they want to go to a site that looks like nothing but babies; if they want us to do a wedding, they want to go to a site that is nothing but weddings.

©EDMONSON Photographers

Most websites I see have portfolios divided up into four or five different types of photography. Then they have their blog link there, and their pricing. And they blend together after a while, because all the sites are the same. Everybody is showing that they do a variety of stuff. We just found that, for us, to connect with our clients, especially a higher-end clientele, they like things that are rare and unique, or specialized. They want to go to someone that is considered an expert in their field. So if you present yourself as a jack-of-all-trades, you may come off as a master of none. Versus if you have different websites, you’re able to show these different clients that you invest yourself into this particular niche, whatever it is. All of a sudden they’re building this trust with you. And you’re giving them a reason to want to use you because they think this is what you eat, dream, and sleep about, is taking baby photos, or taking commercial photos, or taking wedding photos. And it doesn’t actually have to be that way. It’s just the way that you’re presenting it to them.

And then, when they’re looking at our work, we don’t come up to them and necessarily start telling them all the other different kinds of stuff we do. We just show it. It’s like when we meet with wedding clients, we still have a few of our commercial products up and available, because it builds our trust. We’ve shot a number of recording artists and we have their gold records up. And they’ll start to think, if this band I know trusts them to do their photography, why can’t I? Typically, people when they come to meet us, they already know that they like our work. The only reason why they come to meet us is to find out our personalities, because they’ve seen the work online or someone else has put in a good word for us. So we don’t have to do a lot of selling then, at the point that they’re coming to meet us.

Then over time, once they get to know you, they like you, and they love your work, you can introduce them to some of the different types of photography that you do if you have different sites. All of a sudden they start to be your ambassador looking for ways to help you promote your business. And when you’re talking about today’s economic times, we all know that it’s not a good idea to put all your eggs in one basket, because all of a sudden if that hype, for whatever reason, start to slow down, you’re dead in the water.

An image from the Edmonson's Indian wedding site. ©Edmonson Wedding

When we started working together, my father’s business was primarily commercial photography: magazines, books, CD covers, annual reports. So one week I got sent to the West Coast for an assignment, and he got sent to the East Coast for an assignment. And I said to my father, I came back here so that we could shoot together, but I don’t feel like we’re doing that. This is the commercial world, and that’s the way it’s going be; but we have our Saturdays, and wedding photography has changed. Have you ever considered doing weddings? I showed him that wedding photography today is little bit more lifestyle, more photojournalistic. I also showed him how the coffee table wedding books now are more of a magazine layout, which he could relate to.

So we kind of put our sign up in the world to do weddings. The first year, we did everything wrong. We did 120 weddings at $1,000 each, which was way too much. But you learn from your mistakes. So we changed our prices and we ended up doing more weddings the next year. We almost burned ourselves out because we were just all about volume — that’s what we thought success was.

So we learned from our mistakes again and changed our business model. One of the big ways we did that was with our websites. I have background working with websites, so when I very first started, I started off doing it all by myself, ’cause I thought nobody can do it as good as I could. But then I ended up realizing that the only way to grow your business is if you free yourself up to do what you’re best at, which is getting  business, running your business, being a photographer. So we started out with four sites. Those first four were a site tailored to our American weddings, a site tailored to our Indian clients for Indian weddings, a website for David Edmonson, and a website for Luke Edmonson. One of the reasons we had our two individual sites was because some of the organizations that we are part of, for instance WPJA, have specific parameters for the type of images that you show, and if you can identify who the photographer is. For us it was much simpler just to say, let’s take our consistent look and feel from our wedding sites, and we’ll make separate sites dedicated to each target audience.

The second reason we wanted separate sites was that, when we looked at our client, we saw that our most profitable clients are either our high-end Indian clients and our high-end American clients. We’re not making much profit on the in-between, middle-ground clients. But if we were only going after one group or the other, then we would be limiting ourselves. So we said, let’s go ahead and invest in completely separate websites.

Then number one, we could choose a domain name that meant something special to our Indian clients. That’s why our domain for that site is EdmonsonShaadi. “Shaadi” means matrimony in the Hindi language. And the messaging, the tone of what we wanted to say to clients was different, simply because culturally Indians are Hindus, Muslims, and Christians and have 10 thousand different languages and dialects. So rather than presenting ourselves in English, we wanted to be able to talk to say thanks to them in their own languages -– the different greetings that they would expect from other people who understand their culture. We were blessed to shoot a wedding in New Delhi, India, and we had the ability to see things first-hand. For us, when we’re looking at how to divide up the website, it was really important to be able to show our Indian clients things that relate specifically to their expectations. And then, vice-versa, for our American clients we could do the same.

©Edmonson Photography

Another thing that was important to us was that our separate sites link to one another, to allow people to navigate to the different types of photography we do. So for our wedding sites, at the bottom you’ll see that it says “Wedding,” “Indian,” “David,” and “Luke.” That is simply because we want our Indian clients who maybe know somebody who is non-Indian, to realize that we do work other than just Indian weddings, and hopefully recommend a new client. And likewise for our American clients, who could see we do Indian weddings and might tell a friend.

The same thing goes for our commercial and portraits and other related businesses. One of the things my father taught me long ago was that it’s very hard to be profitable the first time you do business. Profitability comes from a lifetime relationship working with someone. So we start out showing clients that we put an emphasis of the type of photography that we’re doing for them, but then we expand to their other needs.

For instance, someone might start out as a wedding client; then, of course, they’re going to have portrait needs. Maybe that starts with babies, maternity photos, and eventually those become senior portraits, family portraits, and so forth. Perhaps the dad has a business, so it’s awesome if he can see that we do commercial work as well. There are an infinite number of ways to grow your business by just putting it out there. One of the things that we found was that whenever we were initially introduced to a client, they wanted to be able to see that we focused on them. If it’s a commercial client, they didn’t want to see any portraits. They didn’t want to see any wedding photos. They wanted to see commercial photos. Likewise a bride who is looking for wedding photos, that’s all she wants to see. It’s only later in the relationship, when they started to explore some of our other offerings, and once they’ve already gotten connected to you and liked you, all of a sudden they start thinking of you and other ways that they can use you in their life.