Friday, May 02, 2008

How To Survive: Part 2

After giving the question "With all due respect, tell us something we don’t know?" some more thought, I wanted to lay additional groundwork for not only surviving rough economic times, but excelling in this new changing market as well. I offer this with one condition: Don’t kill the messenger!

In rough economic times all businesses look to reduce overhead by cutting costs. This is a known fact that has stood the test of time. That said, photographers today need to readdress the whole business of photography and look to the clients that specifically hire them on an ongoing basis: automakers, catalogs, fashions, soft drinks, etc., the products that are made year in and year out. They should also be on the lookout for clients that have new models of products that need to be marketed to the consumer. These clients need a specific product shot for the ad and no stock photo will do. For instance, a new Ipod, a new 2009 car, new fashion, etc.... you get the picture.

The current state of photography today is that more and more people are buying stock / royalty free images and this isn’t going to change. Stock images have become a greater part of advertising than ever before. More and more photographers are contributing to the pool of royalty free images available today, thus, the prices are being driven down by a glut of good images on the market. "Why pay $500.00 for an image when I can buy one for a few dollars?" This has become the mindset of most image buyers. The image history itself isn’t that important for the majority of the projects being done so why pay for it?

So, this sets the table for what I’m about to say. I offer the following based upon my understanding of business now. It is my past mistakes while running businesses that have led me to these conclusions. Remember: Don’t kill the messenger! I do invite disagreement / criticism but not death threats. I believe this is a good model and would look to implement it if I were still a commercial photographer.

Professional photographers need to consolidate their businesses!

Photographers today need to put their egos aside and look to the future. They need to create a consortium of talented professionals, quit being individuals and begin to build businesses apart from themselves. Thus, they need to operate their businesses as businesses. There, I said it. The biggest mistake I made when I was a photographer was I WAS the business. When I quit shooting, I was able to sell a studio and some equipment but NOT the business! Twenty years of good will down the drain. I know of an owner at a local donut shop that just got $250,000 for his rented location, equipment, and GOOD WILL. He sold his BUSINESS.

So, the next question: How is this done?

I would look to large law firms or major advertising agencies as the model.

As a hypothetical, take 100 photographers from around the country all working and billing a minimum of $100,000.00 per year - not much as an individual especially when you factor in expenses-form a consortium and incorporate it. Offer each photographer a base salary and a commission based upon performance, hours worked and dollars brought into the company. The corporation is now billing $10,000,000.00 per year. Now, that’s buying power. The photographers become employees of the corporation receiving such benefits as vacations, options, healthcare etc. If a photographer doesn’t pull his or her weight they can be fired, just like in any other organization.

This hypothetical business now is in a position to get bank loans and lines of credit as well as have a studio in every major advertising city- New York, San Francisco, Los Angeles, Dallas, Chicago, Miami, Seattle and Minneapolis ( you pick the cities) - available to all within the firm. No individual photographer is working 24hrs per day so why pay for the overhead as an individual 24hrs per day?

If you take 1% of $10,000,000 or $100,000 per year and spend it on advertising just think of the impact that you could have in the industry. Agencies would like the buzz, art buyers would get one stop shopping and clients would recognize this hypothetical business by name. Why? Because it would be branded as the best, biggest, most complete studio in the world. The company would be able to hire accountants and bookkeepers to do all the billing from one location instead of from the hundreds of individual accountants/bookkeepers that you have now. It also would be able to bring in producers, stylists, reps, and assistants that can work within the company and be pulled into a shoot when needed. As the assistants gain experience, they can be groomed as photographers and become associates, much like associate attorneys in a law firm. The company would also be able to control stock shoots and be their own stock agency. The opportunities are endless. Most important, when you are ready to retire you have equity in the company and you can sell this equity back to the partners or to a new photographer coming into the firm.

Congratulations, you’ve built a company that is bigger than you, the individual photographer! You’re a professional that deserves professional fees and respect.

This is a very rough overview, but it is doable and can be highly profitable. It can be accomplished with as few as 10 photographers in a single city to a few hundred in multiple cities. Again, look at law firms or major ad agencies working under one corporation in multiple cities. To accomplish this it will take a committed group willing to break the mould of what has been and build for what can be. Do you want to survive in rough economic times? More importantly, do you want to change an industry? Here is the road map.

1 comment:

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