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In his book Small Business Management Chauncey Gardner-Johnson Jersey , Michael Ames gives the following reasons for small business failure:
1:Lack of experience
2:Insufficient capital (money)
3:Poor location
4:Poor inventory management
5:Over-investment in fixed assets
6:Poor credit arrangements
7:Personal use of business funds
8:Unexpected growth
Gustav Berle adds two more reasons in The Do It Yourself Business Book:
9:Competition
10:Low sales What is the common thread ? Poor Planning! Let's look at the words starting with ?C?, insufficient CAPITAL, poor CREDIT arrangements, and COMPETITION.
Unfortunately, too often we underestimate our competition (the competition is not necessarily other photographers) Erik McCoy Jersey , causing us to get a poor credit rating, and we die because there is insufficient capital to get us over the start up phase of opening a new business.
One area that is sadly overlooked when starting a business is start-up capital. Start-up capital is the amount that you need to have before you open your doors. This is the money set aside in the bank that will carry you through the lean months so that you can pay your fixed expenses, variable costs, and your salary.
We start by trying to get a good handle on our fixed expenses. These are the expenses that will occur regardless if we make any money what so ever. A list of these would be: rent, telephone Alvin Kamara Jersey , hydro, advertising (I believe that advertising is a necessity, therefore qualifying as a fixed expense. You have to advertise when you first open up to let everyone know that you are in business), auto insurance, office supplies Marshon Lattimore Jersey , and utilities.
Oh yes, I almost forgot (just kidding), your salary. Most photographers I know pay themselves if and when there is any money left over at the end of the month. This is not acceptable! Be proud of what you do. Be positive about what you do. Most important ? pay yourself. If, and I say this in only the most hypothetical of situations, if you go broke do you think anyone is going to take pity on you and give you any money back. Hell no! So pay yourself and make sure that this is a habit that you continue. It provides a huge psychological boost each and every month Tre'Quan Smith Jersey , one that pays dividends in the end. (No pun intended.)
From there you try to figure out how many photo sessions you will be taking. Break it down into specific numbers, how many sessions a day? After that, determine what your costs are per session. How much film and processing? How many prints or paper will you use? These are called your variable expenses, expenses that are incurred only when you do something. Then figure that if you work 20 days that month what your costs will be on a monthly basis.
We now add the third dimension ? hard costs. If you are starting a studio or office location, you will need furniture Marcus Davenport Jersey , fixtures, and equipment. Equipment can be cameras, computers, desks, and file cabinets etc. Go through catalogs and find out how much you will need to spend on these items.
After this is all done we add them together Michael Thomas Jersey , six months of fixed expenses, six months of variable costs, and your hard costs, to come up with what your start up capital will be. Then make sure that you have that covered. This can be done with a combination of your cash, bank loans Drew Brees Jersey , line of credit, or investors. Just make sure that you have six months worth of start up capital.
Any money you earn by taking pictures will be gravy. Hopefully it will be enough to cover all of your fixed and variable expenses, but if it doesn't you have your back up plan. It is better to spend a lot of time planning and being prepared as the old saying goes, ?Failing to Plan, is Planning to Fail!?
Generally it takes three to five years to get your feet firmly planted on the ground and your roots dug deeply into it. If you use my proven system you should be up and running within a year Cheap Saints Jerseys , check into my personal coaching program to ensure your success.
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