New business in bad ecomony.

[serge_kakorin]

I plan to start a wedding photography business.

If you were to start your business now, with economy being what it is, what would be your considerations? What

would you do differently, if at all?

[bill_clark___minnetonka_mi]

Have a quality product. (However you define that, it's your vision of the world.) What are the ingredients necessary to

produce that product?

 

Give excellent Service. (If I call you on the telephone will I be greeted by your voicemail?)

 

Pay attention to what your clients want/desire.

 

An attractive place to conduct your business.

 

A business plan constantly viewed and changes made to ensure success.

 

Personal skills to sell the above items and convince a potential client to hire your services.

 

I keep working on what I'm doing and working to get better & better at what I do.

[Charles_Webster]

Have enough money in the bank to live for a year.

 

Most businesses fail in the first two years because they are undercapitalized.

 

<Chas>

[serge_kakorin]

Thanks, Bill and Charles. You have good points. Good business plan and financing as well as product and services are essential, but how does bad ecomony affect your business? And if you were to start now, would you do it differently? And how? If at all.

Thanks

[bill_clark___minnetonka_mi]

When the Goin' Gets Tough the Tough Get Goin'.

[kirsten jette]

My husband and I opened a small cafe in a fairly rural area almost exactly a year ago. It's not a photography business, but I think I

understand what you're asking and I'll give you our experience. Some of this advice is born of mistakes we made, some of it is born of

the pitfalls we successfully navigated.<br><br>

 

First of all, here's an excellent resource for these kinds of questions: <b>www.inc.com</b> Start with Resources>Start Up. Read

through

every article on the site, even if it doesn't seem relevant, there are gold nuggets throughout! Reading and following advice from inc.com

has helped us immensely, and a few times saved us from making a big mistake.

The other site is <b>www.nppa.org/professional_development/business_practices/cdb/cdbcalc.cfm</b> This calculator will give you a

good

idea of what your daily costs will be. Play with it a lot. Use it in your business plan.

And lastly, learn about SCORE in your area, they are amazing! This is a perfect and free resource for everything from business plans

and taxes to legal. Here's Inc.com's article about them <b>www.inc.com/encyclopedia/service-corps-of-retired-executives-

SCORE.html</b><br><br>

 

So here's my take on it…<br>

<b>There are some real benefits to opening a business in the current economic climate.</b><br><br>

 

1) Having just opened, you (should) have already planned on not having income from the business for the next year. Your competition

has NOT planned on having no income for the next year. This give you a leg up psychologically as well as financially.<br><br>

2) Your competition is dwindling. As much as I hate to see any business fail, it's a reality that there are many who won't make it through

the next year.<br><br>

3) When the economy does start to come back around you'll be in an excellent position. There will be lots of new businesses popping up

at that point, but you will already be established. Your workflow will be ironed out, your pricing set, and your name recognized.<br><br>

4) This is the perfect time to take the time to build your business right! This is really important, it's right up there with start-up capital. As

many businesses fail due to lack of preparation as do to cash flow issues. I think this is even more likely with a photo business. In

photo, it's easy to wake up one day and realize that you have your own business wether you wanted one or not! Think about it, you do a

wedding for a friend/relative and survive it and the next thing you know, someone who's seen their album wants you to do theirs. Then

you're posting on here asking for advice on billing and contracts. That's all backwards! It's like me opening my cafe, taking their order,

then realizing that I don't have any to-go cups and don't know what to charge them! But that's the way it is in photography, you roll with

it.<br><br>

Take the time (before you shoot anything else) to write up a business plan. I know, I used to hate them more than résumés! Write it first

as if you're the only person who'll ever see it. Then keep revising it until you'd be proud to show the bank. Even if it never sees the light

of day again. This will get help you work out many of the kinks before you even spend a dime.

Work out the details. Decide what you're going to shoot (and what you're NOT going to shoot), how much you'll charge, what weird

requests those customers are going to have and how you're going to deal with it. Figure out how long you sittings will be, how many

pics, how you'll handle editing, retouching, and proofing. How are you going to handle printing and packaging? Are you going to offer

referral discounts? Wallow in the details for a while, that's where the devil is–know thine enemy! My husband get frustrated with me for

getting stuck on the details, but there's a time and a place, and you'll have to deal with them eventually. Now is a great time.

Take the time now, before you open, to work out your workflow and all the details. Then the only thing you'll have to concentrate on is

shooting and making your customers happy. You won't be stressing out over billing and wether you've priced your work right. I can tell

you from experience all the things I could have done to grow my business while I was fighting with software and taxes for two months. If

I had set that software up before we bought anything for the start up, I would have had my taxes finished in an hour instead of 80+

hours. Really. No exaggeration. All that time could have been spent creating advertising, or new products, or hiking in the woods with my

camera ;-)<br><br>

5) Talk to the IRS, they're here to help. Seriously! They are, quit laughing! If you call the 800 number and tell them what you want to do,

they'll give you a whole list of things that you should consider. Call your state and county offices and ask them too. Oh, and sometimes

it's best to call back again on another day and ask the same question just to make sure that everyone has their facts straight and you're

understanding it right. My state and local government was so helpful that I was starting to get suspicious! At every turn, someone was

ready to tell us the next thing we should be thinking about complete with the name and phone number of who we needed to talk

to.<br><br>

6) What you should be asking yourself is "CAN I start a business in this economy?" not "should I". Should you? Yes, if you have the

resources. Can you? Well that's a question that only you can answer because it has more to do with financial resources than anything

else. If the answer is "no", than start figuring out how much you need to sock away before you can open and get to work on it. If you can

open just before all the others start popping up, that would be great.<br><br>

7) If the answer to #6 is "no", consider altering you business plan to build your business in modules. Go through all the things I talked

about above, but consider starting with only one part of your business, say, studio portraits for example. You can do that part-time on

the weekends to help you build capital. But do all the planning first so that it truly is part-time! If you've done all the prep work first, you'll

have MUCH more time to shoot and make money. This is actually what I'm planning on doing over the course of the next year. But the

only way I will be able to run two businesses is if both are meticulously planned.<br><br>

8) The cost of paper clips adds up. It's things like rubber bands, toilet paper, coffee filters, and "AAA" batteries that get left out of the

cost analysis that sink the ship. I know that it sounds anal, but track EVERY PENNY! At least for the first year. Have an accountant or

a quickbooks guru help you set up your expense tracking so that you can look at it every month and really understand where the money

is going.<br><br>

 

I hope that this helps you to make a good decision. Be honest with yourself during the planning. This business will be like a spouse, if

you stick your head in the sand now to get it open, you'll be very unhappy with your commitment very soon. Go in with your eyes open,

have the lemonade pitcher handy ;-) , and you'll truly enjoy her company!<br><br>

 

Kirsten

[jeannie]

Thank you, Kirsten. That was very helpful.

[tana_d.]

Wow, Kirsten, great info! Thanks for taking the time to post, very helpful.

[serge_kakorin]

Kirsten, thank you for your great advice. I really appreciate your time and willingness to help. Your word helped me to stay focused. I am still in the planning phase. You are absolutely correct about the importance of doing it first and doing it right. I had experience with starting the business without proper preparation and seeing it failing. So this time I can not let it happen. Finances, well, I have some reserves to keep me going. I have another business going at this time, which will help to support the new one. So I guess it is just a matter of factoring in the "economic climate". People are less willing to spend their money now, and if they do spend, they are not willing to spend as much. I am looking at the possibility of having a profitable wedding photography business, because I want to eventualy get out of the corporate world.

Kirsten, I wonder if the economic turbulence affected your cafe at all. Do you have as much business as say 8-9 month ago. And what are your prospects for the next year?

Thanks again for your great advice.

[kirsten jette]

No problem, Sergey! I've always said that it's good to learn from our mistakes but MUCH better to learn from other

people's mistakes! <br><br>We've definitely seen the effects of the economy, possibly even more in our region than

others have. We are in a small town (around 5,000 people) that's split between blue collar, unemployed, and second

home owners. oh, and LOTS of artists. It's a very unique demographic mix here. Throw into that the fact that we are

dependent on heating oil and the average person here commutes around 30 miles each way. It's a tough place to make it

in the best of times, so the tough times seem to affect people here that much more.<br><br>

We're just coming up on our first year open, so I don't have comparative to last year. But it's pretty obvious, we see

fewer people downtown, our regulars aren't quite as regular, other business owners tell us how much they're down from

last year. And we expect that it will get worse before it gets better. But it WILL get better, eventually.

So the question is, can we weather it? Yes, I think we can. We run very efficiently, we watch our numbers very closely

and (have plenty of time) to analyse our margins and product mix and adjust as needed. One of the things that has

impacted us more than decreased foot traffic is cost of goods. Our costs have increased almost 12% over the past year

due to delivery fees (shipping) and increased supplier costs. We had to raise our prices to make up for it and we were

VERY nervous about that. In the end, it seems that we shouldn't have worried. Everyone has seen their grocery bills go

up, so they weren't really surprised.<br><br>

Part of our success is (I think) in the niche that we carved out for ourselves. We really went all out on the interior design

and branding to give the place a very upscale, fun, and funky feel that people around here didn't really expect. Our prices

aren't the highest in town, but they're up there. What it comes down to though is that our cliental generally isn't price

sensitive. They're out for quality and experience. If we were trying to compete on price, we would be in trouble. We don't

discount, we don't do sales or specials. We do exceptional quality for a reasonable price. We give them a little more than

they expect.<br><br>

As I look at going forward with a photography business in the next year, I don't plan on trying to compete on the basis of

price there either. I plan to start slow and be selective about what I do, turn out a great product, and let it grow from

there. Now, if I HAD to build it quickly and get an income going, I would have to be more competetive in my pricing. And

likely I'd hate what I was doing within a year!<br><br>

It sounds like you've got the right idea and are concerned with the right things. It's amazing how much you learn from a

failed business, it's worth it's weight in gold! Our first café burned. I would never wish a fire on any business owner, we're

still fighting for the last of the insurance money 3 years later! But, it was kind of a relief too. There were plenty of things

that we had been wishing we had done differently and were struggling more than we should have been. If it hadn't burned,

it probably would have failed in another year or so. But the lessons we learned were invaluable (we've got an awesome

insurance agent now!).<br><br>

How the economy effects you will have more to do with where you are, what kind of work you'll be doing, the local

demographic and how you plan to fit into the food chain to begin with. What are your plans? Keep us up to date!

[david_pratt6]

16 of the 30 business that now make up the DOW were started during a recession.

 

Good Luck!

[dave_bean1]

The responses in this thread is very good. I will add one more thing, when people talk about business coming back in a year...that's a sunny forecast right now. Expect to hang-on for longer than that. It will take a year to stabilize the current economy and probably another year or two before it climbs again. This assumes nothing else goes wrong in the world.

 

Dave

[serge_kakorin]

I will be glad to share the steps I take. In the next couple of weeks I will be doing three things. First, this week I'll be

talking with a couple of attorneys to discuss copyright stuff and contracts. I can not say enough about importance of

legal side of the business. Also, I will take a closer look at the competitors and see what they offer. If you know what's

out there, you'll be more aware of what to expect. And lastly, I need to meet with my tax advisor, to see what is a better

way to organize the wedding photography business (either individual or maybe LLC or maybe something else, he will

know better), and about the ways to run the finances. He is good friend of mine.

By the way I wanted to make one point than seems to be hiding in the background. I am sure it is very important for any

business owner to have a good professional advice of attorney, accountant and insurance agent. It is not possible to know everything, and

I would rather spend time growing my business and do what I do best, than waste time studying web design, law, insurance or accounting.

Thanks again to all for great points and thoughts. I will be returning later to add a couple of things.

 

Sergey