The value of small business supporting small business

Thought for the day. Attention Wal-Mart shoppers, there is a sale in our portrait studio today, 187 prints for $4.99. Make you cringe? Then why are you shopping there for items you could purchase from the small business owner down the street? What goes around comes around.

James Day at 7:57am April 28
Very valid point.

Kelly Schantz Cook at 7:59am April 28
Agreed!

Staci Severin Landis at 8:00am April 28
Wow.

Peter Alcivar at 8:02am April 28
Several years ago, while I was unemployed, I interviewed for a photographer job at the Wal-Mart portrait studio. They didn't ask to see a portfolio. The only requirement was that I had to get a haircut and shave.You get what you pay for.

Jessica Padgett Bell at 8:13am April 28
I couldn't agree more! You DO get what you pay for. I checked into a "photographer" job at our WM awhile back and was SHOCKED to learn that you didn't really need any photography skills at all- they send you to a week-long "training" and you are all set! And here I've been working and working and studying and practicing for YEARS when all I needed to do to be a photographer was take a week-long "class" at WalMart... ROFL :-p

Carrie Viohl at 8:17am April 28
I totally agree, Stacey! We shop local as often as possible... and the blood pressure stays down, too!

Amy Tilley at 8:30am April 28
I totally agree you get what you pay for!!! and it to makes me cringe!!But one point I want to make is.... Walmart was once the small business down the street and Sam Walton made the American dream come true!I sure hope when I make it really really big, people don't stop using me!! Just don't see the need to dog on wal-mart.

Jenni Merrill at 8:48am April 28
I refuse to shop at Walmart after seeing the movie 'The high cost of low prices' Sure it's cheaper but cheap is never good and good is never cheap. Also, I know a guy who works in Walmart produce and he admits it's bought in bulk and crap...he buys his produce at the grocery store next door! THAT'S saying something!

Stacey Friedlein at 8:57am April 28
Amy, My intention is not to take pot shots at Wal Mart but to help small buiness owners understand they need to consider their own actions when they see how their clients react to the differences in services between them and the discount stores.I admire Sam Walton also. I have read his book and found many useflul ideas. But when your business model (Wal Mart) is to undersell all of your competition then as a consumer and a competitior you need to realize how your decisions to support and compete create a conflitct in your business model.

Julia Gerace at 8:56am April 28
hmmm... I'm not sure if I have a problem buying socks and underwear for the kids at Walmart - I mean, where else would you go for that type of stuff? or, like papertowels...any suggestions?

Stacey Friedlein at 9:02am April 28
Julia,Do you have a local childrens clothing store and a locally owned grocery, hardware or drug store which may carry these items. The challenge is to seek them out. Let them know you are also an independent business person. It may be the start of a great business relationship.

Peter Alcivar at 9:11am April 28
There is a well-known project management axiom known as the Project Triangle. It's an extension of Jenni's comment that cheap is never good and good is never cheap. At its simplest, it can be expressed as "good, fast, cheap--pick any two". Although it sounds facetious, it really isn't. If you want something done well and quickly, it won't be ... cheap--we may have to hire more staff. If you want it done quickly and cheaply, quality suffers--we'll have to cut corners somewhere, and if you want it done well and cheaply, it won't be fast--we'll have to wait for downtime from other projects.http://en.wikipedia.org/wiki/Project_triangleWhile this is only obliquely related to the original post, it does underscore the need to understand one's priorities and the consequences of one's decisions, and that cost is only one consideration when making a purchasing decision.

Barbara Litchfield Hill at 9:36am April 28
I agree Julia. As a photographer, I don't view Walmart as my competition. The clientele who purchase "portraits" there are not the clients I'm seeking out. Plus, I've heard that Walmart makes no money off their portrait studios...they're only hoping you'll buy other stuff while you're there! I LOVE to support small business, especially women-owned, and do so frequently. But when it comes to buying toiletries, envelopes, etc., a girl has gotta do what she can in this new economy! As in all things, balance & moderation.

Stacey Friedlein at 10:59am April 28
Barbara,I certainly agree with your concept Wal-Mart is not your competition. What I am trying to get accross is if you are willing to make buying decisions based strictly on price then don't be uspet when your poteintial client does not utilize your services because of your price.The second point is supporting small business is good for your small business. The few extra pennies you spend at the local store can pay huge dividends for you in the future.

Kathy L. Phy at 10:01am April 28
I won't step foot in a Wal-mart if someone paid me. The place gives me a major headache

Fred Hinegardner at 1:22pm April 28
When I had a studio, I was glad Wal-Mart and 15 other similar operations did what they did. They took people off my hands that I no longer wished to serve. I instructed all my help to assist callers who could no longer afford me.I cut my photographic teeth shooting 97 cent 8x10 specials. I shot 200 sittings a week while the studios maybe shot 20. Experience helps a rapid learning curve.One day I saw a local PPA Master hiding behind some shrubbery, watching my operation. I waved. He ran. He later tried to prevent my joining "his" PPA. My subsequent history is public.I don't think whining or boycotting solves anything more than creating an energy drain.I have even recommended people who want to gain a lot of portrait experience in a short amount of time to go to work for one of these outfits. I retired at 50.

Randy McNeely at 8:24pm April 28
Stacey, I agreed with you on this that is why I have not been there since Christmas.

Allen Austin at 8:27pm April 28
The pictures are still over priced!

Lindsi Jones at 8:53pm April 28
barf..

Travis Cossel at 8:56pm April 28
Nothing wrong with shopping at Wal-Mart. If I need staples or a light bulb or a bunch of bananas there's really no reason to pay more somewhere else. I think the distinction comes with a business that provides more than just a product like everyone else. To be honest, there are people out there that are perfectly happy with Wal-Mart pictures ... and you're never going to convince them to spend more for a better product. Not everyone is your customer, you know?

Tony Cooper at 9:00pm April 28
'Zackly Travis. There's no mom and pops nearby that sell what I need for less... and none of them are personalized custom products, either. I'm not competing with WM... if you're a WM portrait client, you probably aren't mine, and were never meant to be. On the other hand, if you are my client, you'll likely never want to be a WM client again. :)

Jack Corzine at 9:02pm April 28
nope, sorry, I take my own pictures and do the cropping and touch up on the computer. Sorry Stacey, in general I do agree with you but if it is something that I can do I will. There is one thing I do wish to say though on this subject. That is simply that each and EVERY small business owner has a responsibility to provide the very best personal ... Read Moreservice available. Otherwise it makes the easy way of taking it to someplace like Walmart more appealing to people. I've been burnt by a small business photographer and it does make you much more wary of placing what can amount to much more money into someone elses hands (granted this is a rare occurance).

Stacey Friedlein at 9:17pm April 28
I appreciate everyone's comments. Here is a challenge for the small business owners. Next time you are heading out to do your shopping think about whether the items you are going to get can be purchased locally. You might be surprised.

I totally agree the Wal Mart customer is probably not your client but this is not the point of this post. The original reason for asking this question was to get small business owners consider the double standard of wanting clients to use their services but who may be looking for the cheapest solutions to their needs.

If you don't feel you can afford what you are selling it makes the selling proposition much more difficult.

I plan to write more on this topic in the future. Again thanks to everyone for their input.

Barbara Jones Adelman at 9:26pm April 28
Hey Stacey - this is kind of timely - I attended an event for ISU tonight and looked around at all the other small business women in attendance, met or got re -aquatinted with many and realized that this network of support and personal relationships is not only the beauty of our city, but also the connections that will grow my business - I should not expect their support if I do not attempt to support them. My goal for the rest of the year is a campaign of one on one support of local business and fund raising efforts in order to be a vital part of the community= even though the time and effort may be a little more, the benefits both to my business and my spirit I believe will be great (and cost effective)

Travis Cossel at 9:29pm April 28
Grocery workers aren't underpaid .. I've worked in the industry and the work isn't all that hard. There are certainly much more difficult jobs out there that pay the same or less (including my current job). The bottom line is that I would bet that for most of us, Wal-Mart employees are NOT our target demographic .. just like Burger King employees aren't our target demographic. This idea that I should pay more for something somewhere else to somehow better support our towns is bunk

Stacey Friedlein at 9:41pm April 28
Travis, I am concerned with your comments. If you are in business you should understand the value of doing business with other small business. It is good and healthy for you and for them. Discounting people based on their employment is also short-sighted.

Don't create your own doom and gloom

I love a challenge. Reading though group posts on Facebook I found this post on the Pro Photo Supply group page. I want to challenge each of the ‘broken’ things. I have written and spoken on this topic many times and wish to offer some insight. Grand, these comments are not directed at you personally. There are many small business owners who feel this pressure.

Grand Lubell (Toledo, OH) replied to Mark's post

There are a few broken things that we can't fix:

1. Given the number of unemployed, maybe 10%, the media loves to tell us. All of this hype makes the other 90%, still employed, very nervous. They want deals so low as if they were suffering themselves. Those deals then cut into small businesses, lower margins and kill personalized service. Wal-Mart made it on volume and tough negotiating. Small business can't do that. We need the media to end the scare.

My response: You are right. Perception is reality and people are nervous but it is incumbent on the small business owner to study their market, understand their buying habits and what motivates their decisions. The ‘Walmart” shopper is likely not your client. If it is then you need to be prepared to compete on price While clients may be more price sensitive creating value in your product is possible without jeopardizing your profitability.

2. Part-time and start-ups can work for less and make more. A real studio with taxes, insurance, employees, benefits, advertising, equipment, a building and real suppliers, are lucky to keep 40% of the sale. The start-up could have none of this. Many avoid sales and income tax. No insurance and little back up. They sell in a Starbucks. A $1,300 start-up wedding shooter will make more than a $2,500 brick and mortar guy. And many start-ups are talented. Also most start-ups use photography for additional income finding health insurance elsewhere,

My response: You cannot focus on what the other guy is doing. Taking the time to create a business plan to address your goals and needs and creating an effective marketing plan is the only way you are going to achieve financial success and ride out the tough times. One of the areas to evaluate as you assess your profitability is your fixed costs. If overhead is eroding to much profit then assess whether you should continue in a commercial location or if there is a less expensive alternative.

3. The Internet made us all equal. Also thank bludomain. Nice product for cheap that brought parity to the market place.

My response: The internet is simply a tool to be used to drive customers to your business. Anyone can have a webpage but it is how well it is used along with other marketing tools to promote your business which will determine your successs.

4. The PPA was not our friend. The copyright thing is dead. The energy should be on promoting professional photography, not policing our clients ink jet printers.

My response: PPA is your association. Make your desires known and look carefully at all the tools they have to offer. Copyright protection is a very small part of what PPA can offer you as a member.

5. Canon and Nikon brought our technology to Costco for cheap.

My response: Cameras are simply tools used to create our final product. Before your client can appreciate what you can do with the tool you need to appreciate at it yourself. Making an investment in education and product innovation is essential to set you apart from your competition. It is not the tools or the products as much as it is how you make your client feel about your interest and ability to fulfill their needs.

6. It became cool for art students to shoot weddings because photography was no longer a "dark" craft. The tech part disappeared.

My response: Establishing your style and your ability to capture images in a way which appeals to your client. You need to be concerned about selling your service and the experience you are creating for your client. Again, look within and stop blaming outside influences for the success of your company.

7. Fuji sold us out on the Frontier

My response: See number 5

8. Millers sold us out with Mpix

My response: See number 5

9. Albums Inc. sold us out with Life's Imprints

My response: See number 5

10. There will be a new crop of Debbie and Donnie Digitals born each day. They will come and go, drop both the price and exceptions will become so low that we will never catch up. Sure there will be a few who want the best. But what is the best? The best today is rapidly shot, miss matched color, grainy, fun photography. And Debbie does a great job of it.

My response: Stop blaming every outside influence and worry about what you can control…your quality, your marketing and most importantly your ability to give your client something only you can give them. YOU! Understand the best thing going for you is you. Creating a positive attitude about what you can offer your client and making them understand the experience you create for them is something only you can do will eliminate all of the objections you have listed. I think you are up to the challenge.

A great portfolio will get you customers who aren’t shopping for price. Dropping your price will put you out of business. Holding your price will put you out of business.I hear the fat lady singing and I'm not sure how to pull her off stage.

My response: You are right. Establish your pricing based on sound financial decisions, understand your target demographic and create products and services which cater to their needs and you can overcome the current economic news. Focus inward on yourself and your business and I believe you will find the success which you feel is eluding you. Ignore the fat lady, she is not singing for you.

What does it mean

Over the many years I have been teaching and consulting the questions about terms used in business has often been asked. I have put together a list of commonly used business terms and phrases with their meanings. Yes, this is just like those dreaded vocabulary lists we had in school.

The good news with this list there will be not test. Just an opportunity for you to have a better understanding of what the heck I am talking about when I write articles on business. I hope it helps.

Glossary of Business

Accounting-system of managing financial activity of a business
Accounting software-automates many of the functions of business accounting
Action cycles-a system of managing tasks to complete production goals
Administrative costs-expenses related to business management
Advertising-mechanism to create awareness, educate and attract customers
Assets-items of monetary value owned by the business
At-will employment-allows employer to hire and terminate employees without cause.
Break-even-level at which business income matches expenses
Budget-a system to monitor and project business financial activity
Business expenses-costs of doing business as defined by the Internal Revenue Service
Business goals-establishing an end and a means to get there.
Business plan-a device used to map out the direction a business wants to go. Used to assess business growth and mission.
Capital-accumulated liquid and tangible assets of a business
Capital expense-costs associated with acquiring assets
Cash flow-measures income and expense trends in a business
Cash flow forecast-projects future business income and expense
Closing the sale-the final steps in selling your product or service
Compensation-financial considerations given to employees or contract labor
Consultations-used to educate and gather information from clients
Contract labor-non employees who provide specific job functions for our business
Cost of obtaining business-expenses related to attracting new and existing clients to our business
Cost of sales (COS)-expenses related to producing the products we sell
Cost of sales (COS) percentage-the portion of gross sales related to cost of sales expense
Custodial accountant-an individual who handles regular record keeping of business finances
Database-a collection mechanism to hold customer or financial data and records
Depreciation-expensing and recapturing capital investment
Depreciation rules-government regulations on the amount of capital, which can be deducted on taxes each year.
Employee Covenant-a written statement of the employees job expectations
Employee handbook-guidelines outlining expectations, responsibilities and privileges of employment
Employee orientation-a time of training for new employees
Expense budget-a system to monitor and project business costs
Financial plan-the portion of a business plan dealing with monetary goals
General expense percentage-the portion of gross sales related to operating expense
General expenses-costs related to the day- to-day operation of a business
Gross profit-total of all sales revenue
Income-money received in exchange for sale of goods or services
Income and expense projections-evaluation and visioning of financial direction of business
Invoice-an itemized list of goods sold, including price and sales terms
Job description-a detailed list of functions, duties and responsibilities of employee
Liabilities-money owed by business to others
Limited checking account-used to pay irregular expenses, (taxes, insurance, withholdings)
Managerial accountant-consultant to business on financial operation
Marketing-creating a need for product or service
Marketing calendar-a system of managing marketing plan
Marketing plan-Portion of business plan, which determines the type of business and how it is going to attract the desired clients
Mechanics of pricing-method for determining selling price
Mission Statement-a promise created by the business for how they plan to conduct their operation
Money market account-a holding account for liquid capital, including depreciation recapture
Net profit-the amount of cash from sales left after expenses have been deducted
Operating expense-costs related to conducting business regardless of sales activity
Operational productivity-level of work completed in business workflow
Overhead-expenses, which exist whether or not business activity takes place
Owner's compensation-amount business owner pays himself in form of cash and benefits
Owner's statement of values-the business owner's vision of why his business exists
Partnership marketing-sharing marketing projects with other businesses
Personnel guidelines-rules for how an employee should conduct himself or herself in the workplace
Price point-a pricing level where the product will be sold
Probationary period-often given to a new employee. It allows an employer to evaluate the employees ability to perform job functions
Product lines-the various items a business will sell categorized by likenesses
Profit and loss statement (P&L)-evaluation of income against expenses to determine financial health of a business
Promotional planner-system to manage marketing programs
Pure cash accounting-method of recording income and expenses when cash in transacted
Recapture-ability to regain value of capital items
Regular checking account-handles the day-to-day income and expense of business operation
Relationship marketing-developing clients as marketing tools
Return on investment (ROI)-the value of a business measured against it's performance
Return on investment (ROI) formula-used to determine the value of a business
Sales objections-when clients begin questioning reasons for making the purchase
Sales presentations-showing and educating client products and serviecs offered
Sales projections-analyzing sales categories and their potential growth
Statement-a summary of invoices
Tax accountant-provides assistance in preparing tax returns
Technological productivity-using automation to achieve job functions
Time management-making the optimum use of one's time
Workflow-tracking how production elements are completed

So, you have weathered the storm

Congratulations, you have survived the first three months of the year. This is often the toughest period financially for many small business owners. This means if you are still in business you have survived, but did you thrive and do you have a plan for how you will continue to succeed in the remainder of the year.

There are three things you should think about as you look forward to financially better times. First, how are you doing financially? Did you hit your first quarter sales goals? If not, why not? If so, how can you translate that success to your future marketing efforts? Consider what adjustments you will need to make in the coming months to address your financial needs.

A good management plan allows for you to be more fluid in your business and redirect your business decisions as circumstances may dictate. It allows you to capitalize on successes and avoid repeating mistakes. The plan allows you to chart your business and set goals for its future. If you do not have a management plan in place it is still not too late to put one together.

Next, have you established a strong marketing plan? Are you ready to promote your products and services? To do so you should have targeted the demographic of your potential client. Then determine the best way to deliver your message to them in a way they will respond. Next, create your marketing collateral to build awareness for your offer. Be prepared to follow-up on leads and referrals and don’t be afraid to ask existing clients for these referrals. The point is, the chance an existing client will know someone who would also be interested in your service is pretty good. But you must ask them for these referrals.

And finally, your future, what are you doing today which will make the first quarter of next year more successful. It is not too early to be considering your marketing and financial goals for the coming year. There are indications the economy is getting better and people’s perception of the economy is improving. This bodes well for small business and you need to be prepared to take full advantage of the improving economy.

Your foresight and attitude will go a long way in improving the success of your business. Those of you who have maintained a strong business over the past eighteen months are keenly aware of how important having a good plan in place has been to your past success. Presumably you were successful because you invested the time in your business to make the necessary decisions to keep it moving forward.

Better days are ahead. Be prepared to take full advantage. Plan to succeed and work your plan. As always we are here to assist you if you need it.

Selling your image files

One of the major fallouts from the digital revolution has been the desire of the professional photographer’s client to have the files from the session. For many studios this has created quite a quandary.

As a studio considers how best to address this there are four areas you should consider. They are profitability, image integrity, studio reputation and position in market, and the goals of the studio.

The first factor in making a decision on offering the image files to the client is from a financial standpoint. Purely as a business decision you have to look at the bottom line. The question becomes at what price you offer the image files to maintain the profits necessary to achieve your financial goals. This can be done a couple of ways.

You may offer to sell the image files as an incentive to a minimum purchase requirement or as part of a package. Either way the total dollar amount of the required sale should meet your minimum sale requirement to maintain profitability. You cannot however offer the image files without the needed minimum order, to do so is unprofitable.

Some studios have gone to a larger upfront fee or minimum order and then sell duplicate prints at lower prices to combat the price issue.

Next consider how your original image files may be manipulated. If the file is utilized in ways which deteriorate the overall image quality or alters the image in a way which it was not intended. The impact is the concern of work being out there which may not be to your standards or be used in products which you do not offer.

You also need to consider the quality of reprints made from the image files and whether they are a reflection of the quality you can produce. Having your name associated with poor quality reprints can be detrimental to your reputation.

Where do you want to be positioned in your market? If you are trying to be known as a high-end more exclusive studio then you may be more interested in maintaining the image files for your client. If you are going to maintain the image files you need a system in place to protect those files for your client. Otherwise you may want to simply shoot the job and turn the image files over to the client and let them get their own reprints.

Neither is necessarily wrong but it is important you understand your strategy and how you are presenting your products to your customer. Remember your decision should be a reflection of your overall business goals.

New technologies will continue to offer challenges for your business. However the way in which you make decisions for your business does not need to change. As long as you focus on the overall goals and vision for your business and utilize them in making decisions it will be easier to keep your business on a successful path.