A good business budget can make the difference between a photography business that thrives, and one that will have to close its doors within six months to a year. If you don’t have any idea where money is going, or where you’ll get more money, then the dream of running a company will slip out of your reach. You’ve got to think about building a professional photography business that meets your goals, challenges your weak spots and encourages you to grow.
Let’s start with the budget. Do you know how much money is coming in every month, as well as how much you can expect to make over the next three months? While you might be scratching your head on those numbers, chances are good that most of the established businesses you have heard of on the television and radio can rattle off those numbers with no trouble. Of course, they have accounting departments to handle that part, but you can still capture this information for yourself. You should have a basic accounting set-up if you want to build your business right.
Do you have established clients? Word of mouth referrals? Ongoing customers that seek you out over and over? New customers that seem to respond well to your advertisements? If this is the case, then you’re good to go. You can estimate better not only how much will come in, but how much a new customer is worth over a set lifetime. Lifetime customer value is a massively important metric that you will need to learn in order to run a successful enterprise. After all, if you know how much a customer is worth to you in terms of photography services over their lifetime, you can increase or decrease your marketing costs effectively.
It’s all about the numbers, because we have to use that data in order to refine the business. Anything else just doesn’t make much sense in the grand scheme of things. The other side of the equation is expenses. You need to be more aware of the costs of running your business. If you wanted to service two locations instead of one, how much would that cost? How much does it cost to run the lights in your studio, or do you just travel from appointment to appointment? Your expenses are based around what type of photography business you wish to run.
Keeping these points of insight in mind will be important for setting up a proper budget within your photography business. Go get ’em!