We have all heard of the term “starving artist.” While not always the case, this adage can feel true as a photographer. If you’re like me, you have a passion for your art and want to share it with the world, but unfortunately bills need paying, kids need tending to, and life moves forward whether or not you are ready for it. I can’t tell you the number of times I have asked myself, “Is it possible to earn money as a photographer?” “Can I live my dream of being a stay at home entrepreneur?” If that’s you, don’t give up. I believe the answer to both of those questions is “YES.” You CAN make money as a photographer as well as live your dream, and you can do it by implementing the concept of profit first.
Today I wanted to share with you a new gem that I have found. It has given me new life, renewed hope, and optimism as I move forward with my photography business. I have worked for years to build up my photography business and have thought time and time again, “This will be my year to turn a profit!” But then equipment fails, repairs need to be made, moves happen, and technology advances, sucking away any profit I had in my sight. I had given up all hope and considered closing my business until I read a book that changed my perspective.
In this post I would like to talk about business concepts that I learned about in a book called “Profit First” by Michael Michalwicz. While a little bit radical at first, some of these concepts are ancient in principle. Michael’s life mission is to help entrepreneurs break the poverty cycle and to finally see and experience profit. After reading his book, I believe that this is not only possible, but just around the corner. In light of that, I wanted to share what I’ve learned from his book and my own experiences, as well as how I am going to apply these principles to my photography business.
Sources of Income
First of all, in order to earn a profit from your photography business, you need an income. To help with this, you need to examine what your options are. What are you passionate about? Where are your strengths? What do you love to photograph? If you are just starting out, here are a few ideas for where you can earn income as a photographer:
- Make and sell ebooks
- Make and sell “how to” tutorials
- Advertise and do live portrait sessions (seniors, babies, weddings, engagements, etc.)
- Photograph businesses
- Sell stock photography
- Make a calendar or sell digital art
- Sell fine art prints
- Make and sell a coffee table book
- Sell your photos to magazines for articles
While I was doing several of these income generating activities, I was still struggling to see a profit in my photography business. I have learned that earning money from your photography is just a small part of the equation. There is so much more to running a successful business and it starts with understanding the laws governing money.
Once you start making an income with your photography, you need to learn how to manage it. Wikipedia states that “Parkinson’s law is the adage that ‘work expands so as to fill the time available for its completion.’” The same is true with money. The more money we earn, the easier it is for us to increase our operating expenses to use up that money.
I have seen this time and time again with my business. I earn a little, and determine that I need to take another trip or buy another lens. When all is said and done, my account is usually at zero or in the negative. In the past, I justified it as “investing in my business.” However, this pattern is what causes most new businesses to fail in the first five years. How do we stop this cycle? As with dieting, if you buy a smaller plate, typically you will eat less food. We use up or fill up what we have. This same idea applies to our finances. How, then, can we better manage our business finances?
Here are a few gems I gleaned from the Profit First book by Michael Michalwicz. (I highly recommend reading it as I am only touching on a few key points here.)
Principles of Profit First
1. Take your profit FIRST
Take your profit first? Easy, right? Wait. Doesn’t profit come at the end of the month? It sounds strange, but as human beings we have a tendency to use up what we have and then some. With the Profit First mentality, we need to remove that temptation as soon as possible. Michael recommends taking our profit FIRST and then allocating funds to our other accounts. If you want to see a profit, you need to spend LESS than what you have. This is easier to do if you put a system in place to help you do so.
2. Set up different bank accounts
In order to have more control over our money, Michael recommends initially setting up 5 separate bank accounts. They are:
- Operating Expenses
- Owner’s Draw
My bank thought I was crazy at first when I called and set these up, but I can now see the reasoning behind it. When your funds are separated by separate accounts, you are in essence using smaller plates to handle your money. This tricks your brain into spending less money on things that don’t matter.
The Income Account
The income account is strictly an account where you will put your deposits. This account will go down to zero on the 10th and 25th of each month. Twice a month, you will transfer funds to each of the other four accounts.
The Operating Expense Account
The Operating Expenses account is used to cover all of your monthly operating expenses. If you are not disciplined to save up for annual expenses, then create a separate savings account specifically for those expenses. This is the biggest pull on your business. Try your best to have enough money in this account to cover all of your business expenses and never exceed it. Easier said than done, I know, but really important if you want to see a profit in your photography business.
The Owner’s Draw Account
The Owner’s Draw account is a place for you to set aside your personal paycheck. This is a designated amount or percentage of your income and is separate from profit. You’ve earned this money and need to safeguard it so that you can live off of your paycheck. You will pay yourself 2 times a month. This account goes to zero after each paycheck.
The Profit Account
The Profit account is where you will keep your profit. At the end of each quarter, you will reward yourself with 50% of the total in that account. This is money for you to use for personal use. The other 50% can be reinvested in the business at the end of the year to promote growth.
The Taxes Account
The Taxes account is a place where you will set aside your quarterly taxes. Basically this helps you set the tax money aside ahead of time so that it’s not as painful when taxes come due. This also emotionally helps you not feel the pain of needing to pull taxes out of your paycheck because you’ve already set them aside.
The goal with all of these accounts is to be disciplined and only use money from the designated accounts for each of your expenses. There are lots of worksheets in the Profit First book (and online) to help you know how to allocate your money. While 20% profit is my ultimate goal for my photography business, for this month I am starting with 1% profit, which is TINY, I know. That said, when starting out, it helps to do something so small that you will hardly notice it. As each quarter progresses, I will gradually shift those numbers and percentages to help me get closer to my goal of 20% profit.
3. Cut back on expenses
My photography business expenses are not huge. I have a home office and only need a lap top and camera equipment. In addition to that, I need a phone to communicate with current and potential clients. I also need to travel to take photographs. That said, I had a lot of recurring small expenses that added up to a lot. When cutting back on expenses it is important to take a hard look in the mirror. Ask yourself, “Is this essential to my earning an income from my photography?” Or “Can I do without this?” It is the principle of good, better, and best.
Save your money for those things that are essential and question everything else.
After looking at my expenses over the last 12 months, I saw that I had web hosting services, theme fees, app fees, and advertising fees. Taking a hard look at what I was spending, I determined that I could cancel several of those recurring services and not even notice them. Granted when word press updates, I may need to upgrade my theme, but in the mean time, I have a fully functioning website that will suffice until I have more growth. I can also look into cheaper housing for my trips. No one NEEDS to stay at a 5 star hotel. I can camp, stay at an Airbnb or even sleep in my car if I have to. Paring down on expenses will do wonders for your business and will help you reach your profit goal a lot faster.
4. Focus on the biggest pumpkin (or in our case, the biggest source of your photography income)
In his book, The Pumpkin Plan, Michael Michalwicz compares a business to visiting a pumpkin patch to pick a pumpkin. Of course, when shopping for a pumpkin, the largest pumpkins always seem to stand out. You need to focus on your biggest pumpkins for your photography business. What makes you different? Where are your biggest sources of income? What do you have to offer others that makes you unique?
It is possible to make money as a photographer, but you need to find your niche.
Once you know what you want to focus on, you need to learn how to make it stand out. Michael shares the secrets behind how farmers are able to grow such monstrosities. When a farmer wants to grow a large pumpkin, he chooses the strongest ones on the vine and then prunes off the other pumpkins so that the ones left can use all the plant’s resources to grow to their fullest potential.
The secret here follows the old adage “less is more.”
I have had a similar experience when pruning my peach tree. If you try to grow all the peaches at once, none of them will be big, and none of them will be super sweet. When properly pruned, peaches can grow quite large and their sweetness is unparalleled. I have fond memories of eating a fresh peach straight from our California orchard. The sweet juice gushed out, pouring down my cheeks and the fruit left me full and completely satisfied.
While paring down may seem counter-intuitive, it actually makes a lot of sense.
We only have 24 hours in a day and only have so much energy. Focusing our attention on our biggest money maker can help fund other projects in the future. In terms of photography income, the same principles can be applied. You need to look at all your sources of income and focus on the one that is the most consistent and which yields the greatest payback.
While I enjoy doing portrait sessions, the income is sporadic and inconsistent. In my case, it is actually my stock photography that earns me the most income. This came as a surprise to me. I haven’t added any new photos to my stock agency accounts for months and yet it was supplying me with income. Instead of neglecting this treasure, I want to redouble my efforts and pay more attention to my stock photography money maker.
5. The Secret of Passive Income
While not directly from the book Profit First, I wanted to take a minute to talk about the benefits of passive income. What is passive income you say? Once again, Wikipedia comes to the rescue! It states, “Passive income is income resulting from cash flow received on a regular basis, requiring minimal to no effort by the recipient to maintain it.” Isn’t that what we all eventually want? Passive income allows you to live your life without having to worry about where your next meal will come from. There are lots of sources of passive income. Some include:
- real estate & rental properties
- online courses
- digital products/print on demand services
- stock photography
- ads and affiliate programs on blog posts and you tube videos
- investments and interest
One reason why I love blogging and stock photography sales is that it has the potential to generate passive income. I enjoy photography tremendously, but I also enjoy spending time with my family. Thankfully, with stock photography and blogging I can do both. I love including my family on my National Park trips. It is priceless seeing my kids’ faces as we hike through the hoodoos in Bryce Canyon, watch bison meander through our camp in Yellowstone, or look up at cascading waterfalls in Yosemite National Park. Finding balance between work and home life can be a challenge, but I believe that investing in your family is the greatest investment you will ever make.
There is power in passive income. I remember hearing a talk once that mentioned Zig Ziglar. While I can’t remember the exact quote, I remember him quoting something like this: “I would rather earn 1% from 100 different ventures than 100% from 1 venture.” I have never forgotten that concept. The way I see it, the more we invest in our future now, the greater the dividends will be. Robert Kiyosaki, author of Rich Dad Poor Dad, talks in depth about the power of passive income (see above video) and is very inspirational. Making passive income a part of you photography business is a big step in the right direction.
6. Celebrate Quarterly
Another important part of the Profit First mentality is to celebrate quarterly. Small wins give you incentive and momentum. Even if your profit is only enough to buy a small ice cream cone (and at 1% that happens), it is still a HUGE win. Eat your ice cream and pat yourself on the back. Celebrating our successes fuels and invigorates us and gives us the strength to continue using our talents and passions to bless and inspire the world around us. It can also motivate us to think outside of the box so that our next quarter can be an even bigger win. (Maybe a pizza?)
Law of attraction
There is so much more that can be said, but I want to end on the “law of attraction.” The Law of Attraction simply states that “positive or negative thoughts bring positive or negative experiences into a person’s life.” (Wikipdedia) I totally believe in the “law of attraction” as well as the Power of Positive Thinking (yes, it’s a book!)
Just this month I decided that enough was enough and that even if it was only 1% of my income, I was going to see a profit and take it first! At first, I thought “Murphy” moved in. Who is “Murphy” you say? “Murphy” is my shortened way of saying Murphy’s Law.
According to Wikipedia, Murphy’s Law states, “Anything that can go wrong will go wrong.”
Right after I made my decision and transferred 1% into my Profit account, my camera broke. Guys, this is my bread and butter!!! You can cut a lot of expenses, but you can’t let go of your camera if you are a photographer. At first I was really discouraged. I thought, “I can’t do this.” Then, I decided to be more positive. I thought, “I don’t know how, but somehow I will still see a profit this month.” And guess what? The repair is covered under warranty! I could not believe it.
After this experience, and my attitude shift, things started looking up.
I booked a senior portrait session as well as a wedding. In addition to these unexpected sources of income, I also got my first paycheck from my Amazon Associates account. I haven’t gotten a paycheck from Amazon referral ads since 2016. While it is only $12.83, income is income.
There is a synergy that comes from being positive and believing in yourself and in your dreams. Yes, “Murphy” is still alive and real, however, when you plan ahead and save for a rainy day, things will typically work out for the best.
Can I Make Money as a Photographer?
Yes. You CAN do this!!! In conclusion, it IS possible to earn money as a photographer but you need to be patient. That said, I got a few dollars of pure profit this month using this new method and look forward to increasing my revenue with each passing month. Before you quit your day job and go full time with your photography business, be sure to read the book Quitter! It is excellent and gives great business advice.
I hope you have been able to learn something new and encourage you to read the book Profit First to find out for yourself how you, too, can make a profit in your photography business! Thanks for reading and sharing my journey with me!
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