A business plan is the most important part of any photography (or other business) aside from drive and desire of the owner(s).
A properly executed business plan with due diligence exercised beforehand will avoid your entering an enterprise that is doomed to failure. Planning encourages one to think carefully about your venture before you have the task of actually running it and makes running the venture easier by directing you to take an unemotional, objective and critical look at your business process without being under pressure from things going wrong while actually trying to run the business.
The business plan is a tool that is used in the pre, during and post operative phases of any business. It allows you to manage the business properly by knowing expense levels and what sales targets in order to be profitable. It is not just enough to make sales but you must have a targeted sustainable level of sales to meet current and future expenses and provide a return on your investment(ROI). If you are obtaining a loan for your business it is likely a requirement for the lending institution unless you are going to finance your enterprise with personal credit; even then it is prudent to do a complete business plan.
A complete business plan includes:
- · An Executive Summary
- · A General Company Description
- · Details of Products and Services
- · An Operational Plan
- · Details of Management and Organizational Structure
- · Details of Startup Expenses and Capitalization
- · A Financial Plan
- · Appendices
The Executive Summary which is a succinct description of your business plan is the primary synopsis read by investors and loan institutions; this summary should be concise yet give a broad overview of your intended operations. The Executive Summary should include your existing (if any) and intended customer base, what your products are and who the operations management will be and a précis of all the items mentioned above. The Executive Summary is always upbeat and gives a positive prognosis (of course backed by by the financials). As this is the primary part of the document read by lenders. It should state how much capital you will need to launch and sustain operations till you are profitable and how such funds will be used. Lenders should be able to determine profitably and a repayment schedule. The Executive Summary should also contain an outlook on your particular business and the industry (or segment thereof) in which you are engaged.
The Company Description should completely describe the operation you intend to launch. It should of course include what business you are undertaking and your role in the business. Here you will want to expound on the goals for your enterprise and in doing so set some milestones along the way, kind of like stepping stones over a body of water. An example of milestones is to set sales targets based on the financials that show a healthy growth and ability to be profitable. These milestones help in product pricing and set the appropriate level of revenue that you will need to obtain to achieve them. Here you should state the dynamics of your industry for instance; a few years back there was a move to digital which lowered the cost of film/chemicals etc. It also meant that images already being digital were deliverable worldwide through the use of the internet. You should identify these dynamics and how you will use them to your benefit, in addition to the state of the industry overall. You will want to describe your strengths and how the company will be profitable. Indentify your background and the experience you bring to the operation and other skills you possess. You should also state the form of organization you wish to take whether it be sole proprietor, partnership or incorporation and your reason for selecting the same.
In your products and services section you should identify your products and services. If possible include samples of your product. Typically these are provided in the appendix but as we are gearing this towards photography it would be an ideal place to include some photographs here; the old adage applies:- A picture is worth a thousand words! You should provide detains on another important aspect of this section which is what gives you the competitive advantage. In this section you must also state your disadvantages (I.E. servicing a customer who only wants analog output/film). Using your financials you’ll derive a pricing for your product that is both competitive and will lead to a sustainable business.
This leads me to talk about the strengths, weaknesses, opportunities and threat analysis (SWOT) will help you determine many critical elements of your business plan. The SWOT is not for the faint of heart or the optimist only, if you are going to do this properly you must be candid (in some cases gently brutal) and a pessimistic views. The SWOT is best performed on a large piece of paper or a whiteboard divided into a four sections so that any other section may be analyzed at the time of performing it, you will find that you will jump back and forth between the sections because you will also identify corresponding weaknesses with strengths and threats with opportunities. Seek people who are engaged in business to assist you and some who don’t even have an understanding of a photography business such as a professional facilitator. This will bring up ideas that may be overlooked by those of us in the know and will keep you on your toes to make sure all elements are well represented in your business plan.
No business is an island and no business can survive without customers regardless of it’s size. You must identify how you will make people aware of your product…. Photography trade journals however, are not ideal as you are targeting the end user and whereas photography trade journals are not read by the average end user other trade journals maybe ideal candidates to promote your products and services. Identify your market segment and set a clear method and cost to reach your intended customers. You have your traditional means such as print, TV and other periodicals but you should not underestimate the Internet and best of all word of mouth both of which are low in cost, happy existing customers are your best sales people. Use of the last last promotional resources will lower your overall marketing budget.
In making determinations about your operation you will want to have facts about your industry, and the socioeconomics demographics of your target market, the desire for your product (don’t sell ice to Eskimos), industry trends, client demographics (some clients/countries have more disposable income than others. Changes in technology and customer taste or even the advent of stock photos sites, Legal issues surrounding photography You will want to identify your competition both in the immediate area and also from outside your immediate area… In the jet age it is easy to be mobile to virtually any location of the world. If you are planning to have a studio you should outline your proposed location and the benefits of it, otherwise explain the benefits of existing solely as a virtual storefront.
Other items you have to address are:
- Products and techniques, quality control and customer service.
- Insurance, legal and licensing/permit cost.
- Staffing: Number of employees, labor laws, level of skill of staff and training, remuneration, job descriptions, employee manuals.
- Inventory: Levels of stock required and lead time to delivery on ordering.
- Equipment: Servicing and replacement of faulty equipment.
- Customer Credit Policy: Firstly is it necessary? if yes, you must address checking credit worthiness, credit terms and limits and policies for slow paying customers.
- Management, Operation and Professional Team: Identify Managers and what their functions are along with support staff. You’ll want to also identify your professional advisory team of lawyers, accountants etc.
Finally, you’ll want to detail your start up expenses and capitalization requirements and include a factor for contingences, the accepted level is 20%. Your Financial Plan should also include a 12 month profit/loss projection, 3 or 4 year profit projection, projected cash flow, opening day balance sheet, and a break even analysis. if you find these to be daunting despite the many resources available to you on the internet it is wise to seek the services of an accountant.
All this may seem like tons of work to do just to start taking your love of photography into viable enterprise but the most prudent thing you can do is do this even before your doors are open as it will outline a clear path for you and also identify milestones so you know how things are going at all times. Venturing into business is not easy as more than half of all new business fail within the first ten years. The major reason for this is not having a business plan to guide the you.
Sample business plans are freely available on the Internet, search DuckDuckGo, pick one that suits your taste and covers at minimum, the above elements. Good luck!
Jeremy is a consultant, educator and photographer based in the Caribbean. He shoots an eclectic range of material but his favorite subjects are urban and seacapes, people and aircraft. He mixes his love of technology, and travel with his photography. After a brief post college hiatus he picked up his camera again in 2003 and has been shooting non-stop. You may view his work at http://www.island-foto.com or you may follow him on Google+ http://gplus.to/JADG