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When I sat down to plan out our podcast themes at the beginning of the year, I targeted April as our pricing and Money month. Now if you've been listening for a while, you know that pricing and money are topics that I come back to pretty regularly. But I had put together a series of four new episodes that I thought took a fresh perspective, was sort of a fresh take on those recurring ideas and lessons. And I was feeling pretty good about the fact that this was going to be a set of episodes that would be useful for a lot of photographers. But then something started happening over in the Darkroom. In case you don't know, the Darkroom is our free podcast app, right? It's sort of where we share bonus content, we preview what's coming, we ask for questions and suggestions before we record, and then you can submit questions and feedback after an episode goes live. So it's kind of a nice interactive tool that you can use to make more use, get more leverage out of the podcast. So if you're not part of the Darkroom, it's totally free. You can sign up at this can't bethard.com darkroom but around mid February, as I was getting ready to record April's content, I started getting a handful of messages from photographers who were feeling concerned, let's say, about the economy, about whether clients were going to book this year. Basically they were responding, they were seeing the preview of the pricing and money theme and saw my plan that I was going to be focusing on strategies for raising prices. And basically they were saying, okay, that's great, but what if I feel like I can't raise my prices? Now that is not a new hesitation. I have been coaching photographers for over six years now and if I had a dollar for everybody who said, I know I need to raise my prices, but I'm nervous about it, I wouldn't need to charge money for anything anymore. But you know, I have pulled the enough people, I've shepherded enough people through that nerve wracking process to know that it is intimidating even for the most talented and capable photographers. But the tone of these messages wasn't panicky, it wasn't outsized fear, right? It wasn't fear based. It was really grounded in this kind of measured, realistic, like, what if I just can't? What if that is legitimately the issue. Several of those messages came in from photographers who were already charging higher rates and had been doing so successfully for years. So the closer we got to the recording dates, the more I began to think like, maybe we need to change the plan maybe how to raise your prices effectively isn't really what people need to hear right now. So I made kind of a last minute choice to change things up because I think there's a conversation that needs to happen in the photography world that doesn't get nearly enough airtime and now seemed like the perfect time. And that's the fact. So I made a choice to change things up because I think there's a conversation that needs to happen in the photography world that really doesn't get enough airtime. And that's the fact that in many cases, with a bit of creativity and a little planning, you don't actually have to charge more money in order to run a profitable photography business. So it's been a bit of a scramble to replan this series of episodes, but I am very excited for what we've put together for you. What I'm going to share over the next few weeks is not just about pricing strategy, it really is about creative ways to achieve your goals and including making more money. So we'll be talking specifics about money. You'll be hearing from some photographers who are running profitable businesses in some outside the box ways. And particularly if you're one of the photographers feeling nervous about the current economic and political climate. I'm hoping that some of these ideas might give you a completely new lens on how you're structuring your business. But even if you don't want or need to restructure your business, I hope you'll tune in because I really actually feel like this pricing and money theme might give you some great ideas for creative ways that even the most successful photographers can reach new clients and bolster their bottom line. So without any further ado, let's go ahead and dive in.
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Welcome to this Can't Be that Hard. My name is Anna Mi Tonkin and I help photographers run profitable, sustainable businesses that they love. Each week on the podcast, I cover simple, actionable strategies and systems that photographers at every level of experience can use to earn more money in a more sustainable way. Running a photography business doesn't have to be that hard. You can do it, and I can show you how.
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All right, so I want to start by telling you about the three different eras in the 16 year span of my photography career. Of course, you know, like a lot of changes in one's life, I didn't fully recognize those eras when I was in the midst of them all. But in retrospect, there they are, right? Same photographer, same market, same niche, same general price range, but very different Feelings about job satisfaction and how my business was run and all that sort of thing, not to mention profit margins. So the first era was my in person sales era, and that ran from 2010 to 2017. Many of you know this story, right? Early on, I was taught that in person sales was the way to have a successful business. So I dedicated myself to learning the ins and outs of ips and I went all in. I was meeting with every single client before the session to plan. Obviously we were meeting for the session itself and then we were meeting again after the session in person so that I could walk them through their images and help them choose prints and products. I invested in a fancy projection system for my sales process. I had a large format printer so that I could, you know, do custom printing, which I felt like allowed me to charge more. I was custom designing high end albums, the whole nine yards. I was also at the time renting a really beautiful studio space. And with all of that, you can imagine, came a fair amount of overhead. So I was making a lot of money per client, but given the amount of time that I was dedicating to each client, there wasn't a whole lot of room for me to grow. And I was exhausted, to be honest. My divorce, which happened in 2017, that was kind of the breaking point. I needed to make more money. And I grew up, created what became the simple sales system in order to accomplish that. And that was where the second era of my business really started. Simple sales at the time was non existent, right? I made it up. And as I tried to switch, it felt like this huge leap of faith. It was a huge leap of faith. The way that I set it up required that I let go of a lot of things. There were no more long meetings, no more sales sessions, no more handholding. I sold that fancy printer and I ultimately let the lease on my studio go. And slowly but surely I started to figure out ways that, you know, I could streamline or automate all of the steps that I had been grinding away at over the last seven years. And that was a wild time. Obviously there was a lot of really unpleasant stuff going on in my personal life. But the amazing and extremely pleasant surprise was that my business didn't implode. Quite the opposite, actually. All these time consuming, expensive parts of my business that I had always believed were the reason that I was able to make a lot of money turned out to be kind of unnecessary. I didn't miss them, my clients didn't miss them. And in some cases it was clear that my clients Actually very much preferred the new streamlined process. And the longer that I was in it, the more that I trusted that it really was working right. I was charging about the same, but now I had room to breathe, and that shift really rewired my brain. That was when I started looking for opportunities to streamline and automate instead of fearing streamlining and fearing automation. Obviously, I knew that there were limits to that, and I didn't want my business or my client relationships to ever feel cold or corporate or impersonal. But I started to get really clear on which parts of the process needed me, needed my eyes and my ears and my voice and all that sort of stuff, and which parts I could see set down. And that was a huge weight off my shoulders. The final era of my business began when I launched my portrait membership in 2019. So I was still running simple sales with my new clients and continued to do so throughout the rest of my career as a photographer. But in 2019, I decided that once someone worked with me once, and it was clear that we were a good fit, I would invite them into this membership that I created so that we could streamline and automate the process even further and make it so that person was just coming back again and again, year after year, kind of on AutoPilot. So by 2021, that was in 2019 that I launched, and by 2021, the membership was essentially accounting for about 70% of my business. Now, the beauty of the membership was that, like I said, everything was essentially automated because these clients knew me personally. They had already worked with me, they had my phone number in their phones. They didn't need the hand holding, they didn't want the handholding, right? They wanted beautiful photos that they didn't have to jump through hoops for. And I had set up and sold them on this system where they could just get that rinse and repeat, right? They didn't have to do almost anything. They didn't even have to pull out their credit card because everything was on autopilot. But here's the part that I really want to highlight, because I think it surprises a lot of people, the era in my business when I was working the hardest and giving the most white glove service those first seven years, that was. The overall income was about the same, but it was by far the least profitable version of my business. Most of us have this deep rooted belief that hard work and profit are sort of inextricably linked, right? Or that they should be linked. And I am all for hard work, I really am. But sometimes the hard work is more about reconfiguring our beliefs about how something should work or how something has to work, rather than showing up and doing the same tasks over and over again. Making the mental space for a new plan or clearing the mental space enough that you can look up from what you're doing and sort of check out the horizon. That is in many ways very hard work and certainly following through on ideas and plans and stuff, that is its own kind of hard work. So for the first half of my photography career, I was so worried about making this top line revenue and believing that I had to do it in this one particular way that it nearly broke me. But what I learned when I created simple sales and then when I created my membership, was that by structuring things differently, I was able to not just preserve my top line, but increase my bottom line. And that bottom line was way more important. Because profitability isn't about what you charge, right? It's about what you keep. And I know that sounds simple when I say it out loud, but so few people are saying it. We have all heard some version of raise your prices, you're worth it. Charge what you're worth. If you want to make more money, just charge more money. You know, it's like this simplified version of how to run a business. And I'm not saying that charging more is wrong. Certainly sometimes you absolutely should raise your prices. Sometimes there are people out there who are undercharging and a price increase is exactly what they need. I have given that advice myself many times. But when budgets are tight, when clients are hesitant, when the economy feels uncertain, which, you know, let's be honest, it really does. Right now, telling photographers to just charge more money feels a little tone deaf. Because what if the market legitimately won't support higher prices, right? What if you're already at the top of your local range? What if raising prices means you book half as many clients and your family can't afford that pay cut? The good news is that in most cases, there are several ways to increase your bottom line without touching your pricing. The path you choose really depends on what your goals are and how you want to run your business. So let's start with the math. And the math is actually pretty simple. Profitability equals revenue minus expenses, right? That's it. That's the whole equation. But what most photographers focus too much on is revenue. How much are my clients paying me, right? What's that revenue piece of the equation? And how can I get that number to go up? Which makes sense More money coming in should, in theory, equal more money in your pocket, but it doesn't always work out that way. So let's say that you have a client who pays you $2,500, which sounds pretty great for a portrait photographer, right? But if your cost of goods sold on that client, or if your cost of serving that client is, let's say, eighteen hundred dollars, between the products that you're selling them, the outsourcing that you're doing, your time, your overhead, all that stuff, if you spend, let's say, 15 hours on that client, between the session, the editing, the communication, the sales process, the delivery, all of it, then what you actually have there is that you've made $720, 500 minus 18 equals $700, and you've spent 15 hours to make that, which works out to less than $50 an hour. And that's before taxes. Now, let's say that you have a different client who paid you half of that, just $1250, which is way less money, right? But if you are running a leaner, more efficient operation where your costs are just $200 and the whole thing takes you, what, say, three hours, because your systems are so dialed in, that means you're making over $300 an hour. Now, obviously this is a simplified version of the story. And again, I'm not saying that the lower price, higher volume model is right for everyone. That is not my point. The point is that you, what you charge is only one piece of the profitability puzzle. How much it then costs you to deliver on that session, both in terms of money and time really does matter just as much. And this is where your business model comes in. If you have been listening to the podcast for a long time, you may remember way back in episode 38, which we're talking 2020 here, I introduced this framework called the Donkey, the Workhorse, and the Unicorn. And I'm going to reteach it today kind of quickly because I think it's relevant to this conversation about profitability. But again, I'm going to do like the quickie version and I will link the original episode in the show notes. So here's the idea. There are three basic business models that work in the photography industry that can be profitable in the photography industry. And each one has kind of a completely different approach to pricing and profitability. The Unicorn model is what most people think of as the goal, right? It's a unicorn, and that is the luxury, high touch boutique experience. So you are serving a small number of clients, you are charging premium Prices, everything's customized. You're spending lots of time with each client. The experience is beautiful, it's bespoke, it's expensive. And yes, you can make great money running a unicorn business, but you are very much limited by time, right? There are only so many clients that you can serve when each one requires that level of attention. The workhorse model is your middle ground. And this is where most photographers end up landing. You're offering professional, reliable, high quality services at more moderate prices. You're definitely not the cheapest option, but you're also not trying to be the most expensive. And hopefully most workhorses are going to have some systems in place, but they are still doing a fair amount of customization. The workhorse model is a solid model and it can be very profitable. But it really does require that you pay a lot of attention, not just to your systems, but also to how you're differentiating yourself from all the other workhorses out there. Because like I said, that is the most kind of popular place to be. And unfortunately, too many photographers end up feeling like the best way to try and differentiate themselves is by giving this really high touch service, this unicorn level service. But if everything else in their business, including their prices, is more workhorse range, that's where burnout starts to happen, right? Finally, there is the donkey model. And this is the one that I feel like is the most misunderstood. So I want to spend a little extra time here. The donkey model is higher volume and it is highly systematized. And often, but not always, the prices are lower. But here's the part that people miss. A well run donkey business is often more profitable than any of the other businesses out there. Not less, more. Because when you build a donkey model business correctly, you are so efficient, so streamlined, so automated that you can serve way more clients in the same amount of time that a unicorn photographer serves just a few. You know, your cost of operation is usually lower because you're not trying to do all the bells and whistles and your overhead can be leaner because you're not trying to create this amazing luxury experience in most cases, although there are exceptions to that and we're going to touch on that. But when you put a lot of thought into how you're setting this up, you can still give a great experience. It may not be super luxe, but it can be great. And your margins can be really, really great. Now, obviously you heard my three eras and then I just told you about these three different business models. So maybe you're putting it together that Those correspond pretty well, right? And that's exactly my point. I basically went from being a unicorn to a workhorse to a donkey in the end, even though my prices never really changed all that much, as I got more efficient, I was able to handle higher and higher volume and my bottom line got higher and higher. Another example of a donkey model business, and this is the one that I was just referencing a minute ago because it's kind of a sneaky donkey model business, is you can actually hear all about it in episode 242 of the podcast. That is an interview that I did with a woman named Liz Hansen who runs a boudoir studio in Chicago that in no way appears like a donkey model business. She bills it as a luxury experience. So when you go to the website, it talks about, you know, luxury and book your luxury session and all that sort of stuff. She offers hair and makeup to all of her clients. That's built into the experience. And she runs same day in person sales for her clients. So all of those things make it sound more like a unicorn business. But when you go to actually book, number one, you can book online without a consultation, without any sort of whatever. You just find a date on her calendar. And the initial investment is only $400. So for something luxury in a city like Chicago, $400 is unquestionably a pretty low barrier to entry. Right? And that is how Liz is able to book over 250 clients a year. Now, in order to accommodate 250 clients a year, number one, Liz has had to put a lot of effort into building out systems where she can handle that kind of volume. And she has put a lot of effort into creating a sales process that boosts her sale average way beyond that, $400. So what ends up happening is she has 250 clients a year, and her sale average is $4,000 a client, which, if you're doing the math, works out to more than seven figures in top line revenue. That, my friends, is a donkey model business. It's a sneaky donkey, but it is a donkey nonetheless. High volume, highly systematized, and highly profitable. And that really gets to the crux of this myth that I want to dispel about the donkey model. Liz's clients don't feel like they're getting some kind of less than experience. Right? They're getting a professional, beautiful, transformative boudoir session. And they're thrilled. They are raving fans. They refer their friends, the experience is great. It's just efficient. And efficient isn't bad. So when I tell you that the donkey model can be more profitable than the unicorn model. I am not making that up. Everyone is stuck with the same 24 hours in the day. But whereas the unicorns out there compensate by raising their prices, donkeys look for ways to get more efficient now, and this is important. I am not saying that everyone should run a donkey model business. That is not the point. The point is that all three of these models can be profitable. And if you're worried about raising your prices, you maybe are charging less than you know is working out to be profitable for you. Yes, you can consider upping what you charge, but you can also consider whether moving to a workhorse or even a donkey model might be a better fit for your skills, your preferences, your market and your life. So how do you know which model to build? Well, here are some questions you can ask yourself. First, do you want to work with more clients or fewer clients? Right? This is a preference question. Some photographers love the variety of seeing lots of different people. Some would rather go really deep with a smaller number of clients. There's not a right answer. There's just your answer. Second, do you thrive on efficiency or are you more into creating a custom experience over and over again, each and every time? If you thrive on systems, if you are a fan of, or at least over open to automation, if you get a little dopamine hit every time that you set up a workflow that saves you time, you are built for that donkey or workhorse model. So if you love the creative challenge, how do you know which model you should be building? Some of it comes down to your preferences, right? Are you a systems person? You really like to sort of create something fresh from scratch each time? Do you work well with high ticket clients? Are you a good sales salesperson or would you rather sort of streamline all that so that that's taken care of on the back end? All of these kinds of questions are things that you can ask yourself. And I'm going to give you a link to a quiz that I created that will kind of suss that out for you. But each model has its pros and cons, right? If you're interested in the donkey model, you have to sort of embrace systems, right? It only works if you have really good systems. If you try and run high volume, without automation, without templates, without outsourcing the right things, you will burn out super fast, right? Or just go down in flames. The donkey model really does require you to be kind of ruthless about efficiency. On the other end of the spectrum, the Unicorn model requires you to be super comfortable with selling and with making sure that each and every dollar that you're putting into that high touch, fancy experience comes back to you four or five or ten fold because you can look somebody in the eye and say this is going to cost you 8, 000 for this portrait session or whatever the case may be. And the workhorse model requires kind of a balance of things and it requires, like I said, that constant attention to am I giving away too much for what I'm charging? Am I streamlined enough? Am I profitable? Am I different enough from my com competition? So all three models have their challenges, all three have their trade offs. The question really comes down to which trade offs you are best suited to manage. So back to my own story for just a second here because again, I do think it illustrates something important. When I started my photography business, I fell into that unicorn model because I was looking for guidance and that was what I was taught to do. Then I created the simple sales system and I shifted more into a workhorse model. By necessity, I needed to make more money in less time and simple sales helped me achieve that goal. Then by the end of the career, I had gone full donkey. Even though I was still charging relatively high prices for my market. I was running this membership where clients were paying me monthly and they came back every year and almost everything was automated. So it was super efficient. My margins were the highest they'd ever been because my costs were so low and my time investment per client was so streamlined. That shift from unicorn to workhorse to donkey wasn't about lowering my prices. It was about getting smarter about how I ran my business. And that's what I want you to take away from this episode and this entire theme that we are going to be diving really deep on. Profitability isn't just about pricing. It is about the entire structure of how you deliver your service. You can make great money running any of these three models and but you have to be intentional about which one you're building and you have to build it correctly. So here's what I want you to do this week. Number one, I want you to pull your numbers from the last year or the last six months if that's easier. And I want you to calculate three things. Number one, what is your average revenue per client? Right. So how much money did they pay you? Don't worry about expenses for six. Step one. Step two, what is the average amount of time that each client is costing you? And when I ask about time, I mean total time. So shooting Editing, communication, driving back and forth, sales, delivery, all of it. Finally, 3. What is your average cost per client? So I'm talking about the products that you sell, editing that you outsource, location fees, anything that you pay for specifically to deliver their session. What is that average? Once you have those three numbers, you can calculate your effective hourly rate. You take your revenue, you subtract the cost that it costs you to deliver that session, and then you divide that number by your total time, and that number is what you're actually making per hour. And then I want you to ask yourself that question. Once you've got that dollars per hour number in hand, I want you to ask yourself, if I could serve twice as many clients in the same amount of time, how would that feel? Would I want to, or would I rather serve fewer clients at higher prices? Your answer to that question will tell you a lot about which model you should be building, which direction you should be heading, or whether perhaps you are in the right place. And if you're still confused about which model works best, like I said, there's a quiz for that you can go to thiscan'tbethard.com quiz. It's just eight questions, so it doesn't take a lot of time and you don't have to put in your information or anything. It'll just give you your answer. Here is where we are going in the next few weeks. Next week, we're gonna be talking about the money you don't see, the invisible expenses that of eating into your profitability and how you can work to get those under control. After that, we're going to be talking about how to make more money per client without raising your prices. Because there are a lot of creative ways to increase revenue that don't have anything to do with your base pricing. And then finally, we're going to bring on a guest who intentionally shifted her business to that donkey model a couple years ago and talk about what that looks like in actual practice. So if you've been feeling stuck, if you've been told over and over again to just raise your prices and it's not working, or if you're charging good money but you're still not profitable, these next few episodes are for you. Because running a photography business doesn't have to be that hard. You can do it. And I'm going to show you how. I'll see you guys next week.
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Well, that's it for this week's episode of this Can't Be that Hard. I'll be back same time, same place, next week. In the meantime, you can find more information about this episode along with all the relevant links, notes and downloads@thiscan'tbethard.com learn. If you like the podcast, be sure
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to hit the subscribe button.
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Even better, share the love by leaving a review in itunes. And as always, thanks so much for joining me. I hope you have a fantastic week.