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|| SportsShooter.com: News Item: Posted 2000-01-24
Let's Talk Business: A New Year And A New Game Plan
By Rick Rickman
Well, sports fans, we are into the highly touted new millennium and its month one. What better place to start figuring out how to actually make a profit for yourself doing what you love. I've decided to give up my part time, clerking for the video store job, and go full force into this photography thing.
It's a little confusing for me though because I see so many people taking assignments that pay $150 -- $250 dollars and they say they have to buy their own film and get it processed. Some even give their film to the people they shoot for and let them keep it.
I was shopping for one of the new whiz-bang 600 millimeter, stands up by itself and auto-focuses by voice command, lenses this past week. I figured, if I'm gonna do this photo thing, I really need to have one of those. I had to pay a little over $10,000.00 to get one. Wow, I've been saving for 3 years and didn't have enough money to pay cash for it. Oh well! I decided to put it on a credit card. I'll just pay it off as I go I guess. I hope I can start getting some work really soon though. I pay 16% interest on that credit card. I guess it'll be OK. I know I do good photos and I guess that's what really counts isn't it?
Well friends, this is a scenario that seems to be more and more prevalent in the sports photography business as well as the general freelance market every year. One of the things that need to be addressed seriously in this new millennium is making a profit. Many photographers view freelancing with a sense of romance and whimsy. This approach has been the downfall of many a talented freelancer. Today's food for thought is: What's the difference in concept of profit vs. salary and how do I figure these issues? Does it really relate to me? Should I really give a hoot in hell? Well, sports fans, let's see.
Profit is the markup a business charges on goods (like film and Polaroid) and services (like scanning and transmission fees). It is wholly separate from the money earned by first creating, then licensing the usage of, images.
Every business, in any industry, survives on profit.
The profit you generate in your business feeds your business. Profit is the fuel that helps a business prosper and grow. This is a normal and accepted principle of capitalism. All the clients that you work for follow this fundamental business principle.
Your creative fees and licensing fees are not profit. They are your salary.
If you find yourself using salary to grow your business, you have not done the "heavy lifting" necessary to understand what your business actually is (and it doesn't matter how many years you've been in business). You are not your business. This is a critical distinction!
Profit feeds your business, making it possible to grow. Profit pays for your overhead, new equipment and training, among other normal expenses. Salary feeds your family.
If you can't generate enough profit to grow your business it will not prosper!
Either you go out of business or you subsidize your business from your salary. How many photographers reading this are subsidizing their businesses from their salary? If you're finding it increasingly difficult to make ends meet and replace aging equipment without putting it on high interest credit cards, you are probably in this category. How many of you can actually compute the amount of profit their business earned last year?
If your salary goes into your business, your standard of living (and the standard of living of your family) decreases.
Every successful CEO in America understands this. Bill Gates does not use his salary to "grow" Microsoft. Microsoft grows on the profit it generates from the sale of its products. Instead, Gates is using his salary to take care of his family and develop other business opportunities, some of which are designed to take legitimate opportunity of weak industries like image ownership and usage (us)!
The problem is that the vast majority of photographers, who are sole Proprietors by-and-large, do not understand this. We confuse our passion with business. Our desire is to be on location shooting film regardless of the cost. It's what we love! This is understandable, but until it stops the "profession" of photography will continue it's downward spiral. Shooting film for a client and then handing that film over to that client for them to use in whatever form they choose doesn't create profit for your business! (Gates is misunderstood. He isn't a computer guy. He is a classic American entrepreneur).
People running organizations like NFL properties, The NBA, card companies, and any one else who wants you to hand over your film understands the importance of profit. They intend to take your images which they purchased cheaply and in turn sell them (heavily marked up), to their clients and make profit from those sales.
Profit is the markup you apply to goods and services provided by your business at the request of your clients. Profit is the money that allows you to grow your business. It is utterly legitimate and necessary. Never allow a client to deny you profit. It's the only way you'll stay in business. Increase your profit and become more competitive by looking for ways to decrease your overhead while improving your standard of customer service.
Creative fees and usage fees are your salary. It defines your standard of living, and that of your family. The more creative you are, and the better you market your skills, the higher your income. You can't however charge usage fees on film you no longer have or control. What you produce is the most important way of generating income for yourself. If you have nothing to sell or resell, you have no potential to raise your standard of living.
Confuse these two things and you have established a course for your business that does two things:
-It virtually guarantees that you will not achieve the level of success and fulfillment that you wish for.
- And it most definitely guarantees that you have contributed to the continual erosion of the very profession that you profess to love and appreciate.
Lastly, historically it has not been the job or obligation of university and college instructors to teach business practices. Generally, they are not qualified to do so (though this might change in the future). It is as reasonable to expect university photography instructors to teach business practices as it would be to expect them to organize unions.
The only way you'll become a better businessperson is to pursue that information on your own. Community Colleges provide a quality business curriculum and it is also possible to educate yourself by talking with other photographers who have great business practices. It is however the most important part of freelancing. The quality of your images isn't even
as important to your future.
Well, sure as shootin' we're all heading into a new era. Will it be your best ever? That'll depend on you and how you do business. Let's all make a resolution to do what we can to stop the spiral of photography this year and increase all our profit potentials. May your New Year be your most profitable ever!!!
Oh yeah! Don't forget to work on that image quality too!
(Rick Rickman is a freelance photographer and deep thinker based in Orange County.)
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