I’m sorry to report that photographers feed at the bottom of the wealth-creation food chain. Why?
Zero barriers to entry. There is basically a zero barrier to entry to the professional photography business. No qualifications, schooling, certifications or experience are necessary. Since most people who become professional already have a camera, a computer and Photoshop (photography was their hobby), there’s a near zero investment in equipment needed. All it takes is a $50 Bludomain website and you’re good to go. Education (from sites like this) is free and readily available. Today’s $700 Nikon D5100 is miles better than the $5,000 Nikon D2X from 4 years ago. Do 2 hours of coaching with me (or someone like me) and you can learn a topic – pricing, for example – that took me years of trial and error to learn. Is it any surprise that every single day another dozen photographers in your town open up shop?
Zero leverage/scalability. Unless you’re going to open up a chain of employee-run studio photography stores, you have zero leverage. That is, you are simply trading your time for money, and there is a fixed amount of hours you can work before you run out of time or simply drop dead. Twenty years ago photographers who shot stock for Getty Images were able to leverage their images (i.e. sell them for decent money over and over again), but that market is basically dead now due to microstock.
Zero equity-building. Unlike the owner of the dry cleaning store who can sell his business and build wealth over time, your photography business builds no equity. [remember the 70's sitcom The Jeffersons? George Jefferson became wealthy by owning a chain of dry cleaning stores]. The typical wedding/portrait shooter (Sally Smith Photography) earns zero income the day she shoots her last wedding. Nobody out there will buy Sally Smith Photography. There is nothing to buy. Her copyrighted library of 200,000 wedding/portrait images has no value, because she’s already sold the images to her only possible customer. She might be able to sell her gear for a few hundred bucks but that’s it.
Zero benefits. You have to buy all of your own health insurance, for example. With the cost of family health insurance at $20,000 per year and going up 10-15% per year, this is a huge deal. Employees of large corporations often have dozens of smaller benefits as well – e.g. life insurance, employee wellness programs, reimbursement for health club memberships, employee discount programs, tax-saver accounts, etc.
I actually can’t think of a worse business than photography. I honestly can’t. In fact, if I were teaching an entrepreneurship class at a business school this would make a great exercise: Have my class think of a business that builds zero equity, had zero scalability and zero barriers to entry. It would be interesting to see if my class could come up with professional wedding/portrait photography. Knowing what makes a bad business would be very helpful in designing a good business.
The bottom line is this: from a wealth-creation standpoint, photography is a lousy career. But you probably already know that.
So what to do?
Don’t give up! Just because photography is a bad business doesn’t mean it isn’t worthwhile pursuing. It does have other non-business related benefits (primarily, it satisfies the urge to scratch your creative itch, which has non-monetary value that’s difficult to quantify). So here are some options:
Option 1: Curl up into the fetal position and rock back and forth. When finished, complain to everyone you know about all the newbies entering the market. Look under the seat cushions to scrape up your health insurance premium. Resume the fetal position and repeat.
Option 2: Take positive action.
Re-evaluate whether or not to be full-time vs. part-time. I wrote about this topic in my post “for love or money“. While photography is a lousy career (from a wealth-creation perspective), it can be a GREAT part-time business. The “low barrier to entry” issue is not a problem for the part-timer. In fact, it’s an advantage. Shoot 10 weddings a year and you can easily bring in $20,000 of extra annual income. Invest this extra while living on the salary from your day job and you will be on your way to financial independence and lasting wealth. How many people do you know can save and invest $20,000 per year?
Pick the right spouse. Photography as a full-time business works best when coupled with a spouse who has a solid job (with health insurance). If your family can live on your spouse’s salary, then you can save/invest nearly all of your photography income. How great would it be to save and invest $40,000-50,000 per year!
Invest your profits outside of photography. Spend less than you earn. Invest your savings wisely. Set a specific savings goal for the year. Do not make a single discretionary (i.e. non-essential) purchase until you’ve socked away that amount into an account earmarked for investing. Read a lot about investing. This will build your wealth a thousand times more than spending time reading ridiculous online forums where people debate Canon vs. Nikon and display their photos of brick walls. I don’t care if you choose real estate, stocks, mutual funds or whatever. Become knowledgeable, save and invest. Since your photography business does not build equity, you need to build that equity outside of photography. Buying a new D3s is NOT an investment, it is luxury, unnecessary spending. The $5,000 D3s will not earn you a single penny more than the $2,500 D700.
Hold on to your cash. Photographers spend way, way, way, way too much money. If I were hired as a business consultant to a photographer, the first thing that I would look at are their expenditures. Let’s look at some examples:
Gear: If your camera is less than 3 years old, there is NO NEED to upgrade your cameras. EVER. Cameras are so good now that you should use them until they wear out. I am still using my 5 year old 5D and getting stunning images from it. I could shoot all of my portrait sessions with my $60, 30 year old Olympus OM2n and my clients would be thrilled with the results.
Software: No need to upgrade. At most, upgrade with every 3rd release. Do you really need those thousands of fancy features that you’ll never use?
Branding: Branding is one of the most misunderstood topics for wedding/portrait photographers. YOU are the brand. Your images. Your attitude. How you treat your clients. Your brand is NOT your logo/letterhead. There is no reason to spend thousands of dollars on professional graphic design. Sure, it’s important for large corporations like Pepsi, Apple, and McDonalds to have the recognizable logo. But in order for your logo to establish your brand, you would have to have thousands and thousands of impressions (speaking with my MBA hat on) at a cost of hundreds of thousands of dollars. Your name in an attractive font is all you need for a logo.
Advertising: Don’t spend your hard earned cash on magazine ads. They are a waste of money. Spend a few thousand dollars on a magazine ad and you’ll be lucky to book one wedding from it. Great, you’re now working that wedding for free.
The most effective ways to generate business and profits are free or nearly free. How much does it cost you to not be an a-hole? How many times have you read a post on online forums like this: “My contract does not allow clients to use images without my permission, yet I saw they posted some of their wedding images on Facebook without my permission! How do I get them to cease and desist and/or compensate me for those images?” Are you f_ing kidding me!! Who are you, Annie Leibovitz? Instead I would thank them for the free advertising. In fact, on my client’s DVD I include a folder labeled “Facebook” with images perfectly sized for it. Which approach do you think will better improve your “brand”? And how much does it cost you to pick up the phone and make some sales calls? You can make more with a single phone call than you can with a $2,500 magazine ad.
Maximize revenue. Since your time is fixed, you have to maximize the revenue from each session. This is way too big a topic to be covered in a single bullet point or single blog post. It’s the basis of my entire blog. Read up on marketing and especially pricing. Photographers leave way too much money on the table. They don’t have a recognizable style, which results in average pricing. They don’t know how to price albums. Their package design invites nickle-and-dimeing from their clients. They sell online instead of face to face. They don’t know how to price prints. They don’t do proactive marketing. How many sales calls did you make this week? Zero? Then why are you amazed that your phone isn’t ringing?
