A Flash of Fear

There it is, sitting neglected in your camera bag.  It’s large, oddly shaped and reminiscent of technology from a distant planet.  Whether you call it a strobe or a flash, this device can instill the same fear associated with the creature from the black lagoon.  Flashes, however, don’t have to be your worst nightmare.  When used correctly and creatively, they become a tool which takes you to that elusive “next level” of photography.

When I first started shooting, what I feared most was simply pointing a camera at someone.   I assumed telephoto lenses were invented for just this purpose — if I could get far enough away, my subjects wouldn’t even know I was there.  After being the photography equivalent of a sniper for some time, it became clear I needed to move in closer and conquer the constant dread of hostile subjects taking revenge by lobbing small nuclear devices at my head.   Once I became more confident my life would be spared, my pictures improved, and I even thought I had this photography thing mastered.  Then I realized you can’t always take pictures in bright sunshine.  The fear returned, and I was sure more nuclear devices were headed my way in the form of poorly exposed images.  So I did what most humans do when faced with fear: I avoided the cause.  But you can only avoid nighttime and darkened buildings for so long.   It became obvious that I needed to learn how to use a strobe.

When I started shooting with strobes, I used a Vivitar 283.  They were first made in about 1975, and they were the state of the art — way better than any flashes made by camera companies at the time.   There was no TTL; instead, there was a little dial on the front of the strobe that was color coded and matched a distance/f-stop wheel on the side.  If you shot with ISO 400 at  f5.6 and set the flash on red, you could count on about 20 feet of coverage.   If you changed your distance or your f-stop, you needed to go to the front of the strobe and change the dial to a different color.  It wasn’t exactly automatic!

Not only were the settings for the flash fully manual, but — because it was the days of film — I couldn’t just take a picture and see if I got it right.   A lot of things had to work to make the photo match the vision, and I usually wouldn’t know if the photo planets had aligned until days or weeks later when I picked up my slides or prints from the lab.   If I got it wrong there was no Photoshop rescue option.   Sometimes I looked at the results, got into my car and drove to the nearest bar.  After a good dose of self-pity, I went home and tried to figure out what I did wrong and how I could fix it for next time.

While there is a lot of whiz-bang technology involved in how a strobe works, you don’t need to know the deep, technical details.  What you do need is an understanding of how, why and when to control the light your strobe produces.  Like any other tool, you must have a concept of what you hope to accomplish with its use.  I’ve found the best way to accomplish that is to simply get out and shoot.  Photography books and web articles are great, but when you’re done reading, you have to actually pick up the camera and experiment.

In the next few blog posts, I’ll examine specific ways to use and improve your photography with strobes — both on camera and off.  We’ll avoid the technical details and focus instead on creativity.  In the meantime, put some fresh batteries in your strobe and start making pictures.

Your Photography Portfolio Goes Digital

Everything is going digital these days and now your photography portfolio is joining the pack.  Album is a new product from ALBUMteam which lets you carry around and display your portfolio or even your entire photo collection in one sleek, compact device.

The "Album" portable digital photogallery

While the concept of carrying around digital photos in your pocket may not be new (think iPhone or any portable camera), the Album product is designed for professional photographers.  The design is sexy, and, with only three buttons, it appears to be very easy to use.  A stylish leather case and a price point of $150 make this an attractive alternative for those who need to show off their work on the go.

New technology like this always gets me excited, but I’m curious as to whether anyone would use it.  What do you think?  Would you ever consider using a device like this when presenting to potential clients?  What about giving your clients one of these devices to keep, preloaded with their images, of course?  Can you think of any other uses?

The Business of Photography: The Lessons of Annie Leibowitz

If you haven’t seen the news lately, famous photographer Annie Leibowitz is reported to be in deep financial trouble.  Though she earned tens of millions of dollars during her career, she is said to be at least $24 million in debt and in danger of losing the rights to her own work forever.  How could this be?  Was Miss Leibowitz affected by the current recession?  Maybe she was a victim of a Ponzi scheme?

This story isn’t new; Annie Leibowitz’s financial problems started long before the current recession and years before anyone heard of Bernie Madoff.   Her story is a sad but familiar one which provides valuable lessons for all of us.   It has nothing to do with not having made enough money and everything to do with not being financially responsible.  Annie Leibowitz’s specific problems are reported to relate to the purchases and renovations of a number of expensive pieces of real estate as well as her out-of-control personal spending.  Despite this famous artist’s considerable annual earnings, the debt-service, staff and upkeep of her properties, along with a free-spending life style, outstripped her ability to have a positive cash flow.  The only solution when that happens is to take on even more debt to feed the negative cash flow, using whatever assets you have not yet pledged as collateral.  It is a vicious cycle that usually ends in disaster.

The lessons of Annie Leibowitz, obvious as they may seem, are worth reviewing.  Clearly, not everyone grasps them fully.

It’s Not About How Much You Make…
…it’s about how much you keep.  Some stars end up poor while some schleppers retire comfortably.  The math is pretty easy to do:  the less you spend, the more you keep.  Making more certainly helps you keep more (again, only if you don’t spend it all).  Of course, that doesn’t mean a photographer shouldn’t spend at all.  New equipment needs to be purchased, marketing efforts deployed, and employees rewarded for their contributions.  Building a business to be successful over a long-period of time requires as much of an investment in your employees (assistants, second shooters) and products as it does in your cameras and other equipment – maybe more.

Don’t forget about your business plan.  Surpassing expectations is a wonderful thing, but make sure you know what to do when that happens.  Many small business owners consider any earnings above their annual expectation to be a bonus that should be saved for those years when things are not as good as expected.  “Catch a falling star and put it in your pocket.  Save it for a rainy day.”  When you have an unexpected increase in the amounts you bring in, thank your employees appropriately and then do what your plan suggests.  If you don’t have a plan, put the excess in the bank and develop one.

Debt is a Four-Letter Word
Without debt, most people would not be able to buy a car or a house, among other things.  This type of debt is understandable.  What is not understandable is spending more than you need to when you buy on credit.  If you pay cash and want to “buy up,” that’s one thing; however, doing so when you borrow money for the purchase makes no sense.  Buy only what you need.  Finance only what you can’t pay for with cash.  Pay off your debts as quickly as you can.  When you owe someone for something, it is that much easier for them to take it away from you.  Being debt-free should be a goal everyone works toward.

What about credit cards?  Credit cards and direct vendor accounts should be used for transactional purposes, not financing.  These balances should be paid off in full every month.  Owing large amounts of transactional debt, especially if the amounts are going up, is not good.  Vendors, banks and other lenders have limits to the amounts they will lend to any one customer.  Once you reach that limit, then what will you do?  One of the abject lessons of the Annie Leibowitz story is that there is a wall out there somewhere for each one of us, no matter how rich or famous.

Get ‘em While They’re Hot
Annie Leibowitz reportedly regrets not doing more when she was in her prime to sell her work.  She always took a very long time to deliver to clients– years in some cases – even after receiving payment.  Doing what it takes to put together prints for sale was something with which she reportedly didn’t want to be bothered, and now she regrets missing out on the extra income.

The artistic, right-brained talent, when mixed with a healthy overdose of perfectionism, can result in what appears to the rest of us as rank procrastination.  Truly famous photographers can get away with it – maybe, – but reputations are made and broken based on an ability to deliver within a reasonable amount of time.  Fortunes are made by capitalizing on a good name while it’s hot.  Waiting to do so later is a gamble not worth taking.  Why wait to market and promote yourself?  No matter how well your work is doing, you can always sell it to more people in more places.

Annie Leibowitz is one of the great photographers of all time, so, regardless of how she got to this difficult spot, it is a painful thing to watch.  It remains to be seen how this chapter in the on-going saga of the financial trials and tribulations of Annie Leibowitz will resolve itself, but things don’t look good for our heroine at the moment.  No matter how this turns out, however, the lessons to be learned are clear and real:  pay attention to what you make AND what you spend, use debt only when necessary and sell what you can when you can – you don’t know if you’ll get another chance to do so later.

The Business of Photography – Love Your Numbers

This series of articles, written by Jerry Weiner – CEO and owner of PWD Labs – provides tips and insight into the business end of professional photography.  Feedback, questions, and ideas for future articles are all welcome.

The wonderful thing about professional photography is the ability to earn a living doing something you love.  However, most photographers work as sole proprietors or partners in a small business, and as such they are responsible for a lot more than just photography.  To effectively use detailed tools like the cash flow analysis discussed in the last article, it is important to have appropriate perceptions of and attitudes toward your numbers.  Think of the following as the left-brained approach to numbers.

Separate Your Numbers
Business is business and personal is personal.  You may nod emphatically in agreement, but in a small business it can be difficult to keep things separate.  Still, this is absolutely necessary in order to really get a handle on your business.  Think of the business as a separate entity with its own assets which you cannot touch for personal reasons.  Keep separate bank accounts and accounting records for your business and your personal life.  Your numbers may wish to co-mingle, but stand firm.

Plan Your Numbers
We talked earlier about creating a business plan.  Your plan is how you translate your dreams into tangible results.  You should have a plan with just enough numbers so that when you compare your actual results to them, you will know whether or not you are on track to where you want to be.

Of course, a plan only lasts so long before it is out-of-date.  The value of having a plan results from the process required to develop it, so revising the plan should be just as valuable.  At least once a year, review your short- and long-term plans and update them as necessary.  If circumstances change so drastically during the year that the current plan no longer makes sense, a new plan should be developed as soon as enough is known to be able to do so.

Know Your Numbers
Accountants love playing with numbers and reports as much as photographers love playing with f-stops and poses.  You may not get excited about numbers, but it is important for all business owners to at least keep an eye on the basics.

As detailed in the previous article, you should update your cash flow report each month.  We mentioned keeping two reports – one for planning and one for actual data, – but here’s a tip to combine them into one spreadsheet:  Start your sheet with nothing but planning data, then begin to fill it with actual data as the months pass.  You will overwrite the predicted data with actual data for the month, then go to the end of the report and extend the projection one month further.  Using this method, you’ll have your past history while still keeping a set of projections running well into the future.  Save each month’s file under a different name.

Another thing worth keeping track of is customer activity.  Who bought what and for how much?  This will help you understand which customers are worth a little more attention.  Knowing what products sell best and bring in the most profit also lets you know which products to push the hardest.

Use Your Numbers
Don’t just blindly update your numbers – look at the various components, think about what causes them to go up and down, and compare them to your overall business plan.  Remember, numbers tell a story. If your cash flow projections are very different from your actual numbers, you need to understand why.  What caused the differences, and, more importantly, what impact will that have on other plans you made?  If necessary, adjust your projections going forward.  If you are not meeting your pre-set goals, then you need to take actions toward doing so or change your goals.  Keeping up with numbers is not an end in itself – it’s what you do with those numbers that matters.

Don’t Sweat Your Numbers
My uncle Manny – a CPA – said, “If you’re paying too much tax then you must be making too much money.  Don’t worry about the tax.  Make the money.”  There isn’t much I can add to that.

Love Your Numbers
Okay, that’s taking it too far.  How about “respect your numbers” instead?  You may not be an accountant, but when you combine hard numbers with the hard work you already bring to your business, you’ll be amazed where you can go.

The Business of Photography – Cash Flow

This series of articles, written by Jerry Weiner – CEO and owner of PWD Labs – provides tips and insight into the business end of professional photography.  Feedback, questions, and ideas for future articles are all welcome.

Previously, we started off the business planning process by thinking in generalities of where your photography business is and where it’s going.  Today, we’ll quantify those plans a bit more and discover how to begin tracking results.  After all, what good is having a plan if you don’t know whether it’s working or not?

As we delve deeper into accounting, numbers and spreadsheets don’t worry too much.  The math used in small businesses is, for the most part, simple addition, subtraction, multiplication and division.  “How much did I bring in, how much did I spend and what is my profit?” doesn’t require a bit of calculus to answer.  We do, however, highly recommend becoming familiar with Excel or a similar spreadsheet application, as these will become invaluable tools of your trade.

So, what numbers do we really need to keep an eye on?  Beginning with this one, the next few articles will each focus on a financial topic important to anyone running a photography business.  We’ll offer tips for getting a handle on your numbers, starting with your cash flow.

Cash flow is a great place to begin.  With this single business tool, you can plan and predict your monthly situation to see where you’re going, and you can also track your actual numbers to see how you’re doing.  The first part of this – the prediction stage – is called cash flow forecasting.  By estimating your monthly income and expenses, you’ll know not only how much money is coming in and going out, but also how much money you will have at any given time.  This dimension of timing is crucial and is a main component of cash flow analysis.  In fact, the purpose of cash flow forecasting is less about figuring your profits and more about seeing how much money you have at different times.  For example, you may generate $20,000 in profits this year, but if you don’t have any of that cash when you need it, you may not be able to do what you planned (such as buy that new camera when you want).

The need to keep up with cash flow may seem pretty obvious, but how do you do so?  An easy way to plan and track cash flow is to use a spreadsheet which lists all the possible sources and uses of cash and forecasts them by month into the future.  Here is an example of a six month cash flow forecast:

Let’s break this down:

• On the left, we have our Summary, Sources, and Uses.  To personalize this to your business, you would simply plug in your own sources and uses.  As you do so, think about how to break them out, as the timing of when the money comes or goes is important.
• Going across the spreadsheet are our monthly numbers.  Each month’s Summary section is automated by Excel formulas (again, simple addition and subtraction), so all you need to fill in are the individual sources and uses numbers.  The one exception here is the Beginning Cash Balance for the first month.  You’ll need to enter how much cash you’re starting with, and then whatever is left over at the end of the month automatically becomes the beginning balance for the following month.
• Projecting cash flow for six months is a minimum, but twelve months makes more sense, especially for event photographers who generally book twelve or more months in advance.  Keep in mind that any projection is going to be wrong the moment you put it on paper (or in a spreadsheet).  The further into the future you forecast, the less likely it is that you will be accurate, but that’s okay.  The point here is to think through what should happen as best as possible, not to predict exact future numbers.
• Entering your sources and uses numbers into a cash flow table really is a matter of timing.  Don’t think about your events and other sales in terms of how much you get for them.  Think instead about when you get paid.  Doing a $2,500 wedding today does not mean you made that amount this month.  You probably received a deposit of about 50% upon booking (which means you could have already spent that money twelve months ago), and perhaps you received the remainder thirty days before the event.  Much of the work you do – events, albums, portraits, and more – each have their own cash flow which rarely relates to the timing of when the job is performed.  The same is true for your expenses (think about when you pay the deposit for an album and when you actually see that album).
• Uses of cash fall into a number of categories vis-à-vis cash flow:
  1. Expenses which vary based on the number of jobs you do.  These may include post-production services, printing costs, on-line hosting fees, etc.  You generally won’t pay these costs until two weeks or more after the event.
  2. Expenses which occur every month at about the same level.  These include salaries and benefits, rent, occupancy and other office expenses.  Figure out what those numbers are, figure out when they are going to increase, and forecast them.
  3. Expenses which are paid a few times a year.  These include property and casualty, workers’ comp and liability insurance, and taxes.  Some of these expenses can be paid on a monthly basis but may require a fee to do so.
  4. Expense and outflows which are discretionary in nature.  These include marketing related costs – advertising, sample prints, directory listings, etc. – and equipment purchases.

Linked below is the sample cash flow Excel file.  Taking the time to understand the example spreadsheet or building one yourself is a worthwhile exercise in that it forces you to think through the detailed components and how they fit together.  We recommend creating two versions of your own cash flow spreadsheet: a forecasting version, where you predict your cash inflows and outflows each month; and a tracking version, where you plug in your actual numbers on a monthly basis.  You can keep these as two sheets in the same workbook.

Once you’ve taken the time to construct your own spreadsheet, it is important to keep it updated.  An hour or so of your time each month will pay off big when you are able to get a better handle on your cash flow.  With on-going cash flow planning, you can more accurately predict when you can buy that new camera or how much you can give yourself as a bonus this year.  Knowledge, after all, is power.

About the sample Excel file: The sample workbook linked below has two tabs labeled “Example” and “Blank”.  “Example” is a twelve month version of what you see above.  “Blank” is the same worksheet without any numbers but with formulas intact.    Feel free to modify or fill in either using your own information.  Of course, if you add or delete lines or columns or make any other changes, it becomes your responsibility to make sure the formulas still work.  Enjoy!

Example_Cash_Flow.xls

Let’s break this down:

• On the left, we have our Summary, Sources, and Uses.  To personalize this to your business, you would simply plug in your own sources and uses.  As you do so, think about how to break them out, as the timing of when the money comes or goes is important.
• Going across the spreadsheet are our monthly numbers.  Each month’s Summary section is automated by Excel formulas (again, simple addition and subtraction), so all you need to fill in are the individual sources and uses numbers.  The one exception here is the Beginning Cash Balance for the first month.  You’ll need to enter how much cash you’re starting with, and then whatever is left over at the end of the month automatically becomes the beginning balance for the following month.
• Projecting cash flow for six months is a minimum, but twelve months makes more sense, especially for event photographers who generally book twelve or more months in advance.  Keep in mind that any projection is going to be wrong the moment you put it on paper (or in a spreadsheet).  The further into the future you forecast, the less likely it is that you will be accurate, but that’s okay.  The point here is to think through what should happen as best as possible, not to psychically ken exact future numbers.
• Entering your sources and uses numbers into a cash flow table really is a matter of timing.  Don’t think about your events and other sales in terms of how much you get for them.  Think instead about when you get paid.  Doing a $2,500 wedding today does not mean you made that amount this month.  You probably received a deposit of about 50% upon booking (which means you could have already spent that money twelve months ago), and perhaps you received the remainder thirty days before the event.  Much of the work you do – events, albums, portraits, and more – each have their own cash flow which rarely relates to the timing of when the job is performed.  The same is true for your expenses (think about when you pay the deposit for an album and when you actually see that album).
• Uses of cash fall into a number of categories vis-à-vis cash flow:
  1. Expenses which vary based on the number of jobs you do.  These may include post-production services, printing costs, on-line hosting fees, etc.  You generally won’t pay these costs until two weeks or more after the event.
  2. Expenses which occur every month at about the same level.  These include salaries and benefits, rent, occupancy and other office expenses.  Figure out what those numbers are, figure out when they are going to increase, and forecast them.
  3. Expenses which are paid a few times a year.  These include property and casualty, workers’ comp and liability insurance, and taxes.  Some of these expenses can be paid on a monthly basis but may require a fee to do so.
  4. Expense and outflows which are discretionary in nature.  These include marketing related costs – advertising, sample prints, directory listings, etc. – and equipment purchases.

Linked below is the sample cash flow Excel file.  Taking the time to understand the example spreadsheet or building one yourself is a worthwhile exercise in that it forces you to think through the detailed components and how they fit together.

We recommend creating two versions of your own cash flow spreadsheet: a forecasting version, where you predict your cash inflows and outflows each month; and a tracking version, where you plug in your actual numbers on a monthly basis.  You can keep these as two sheets in the same workbook.

Once you’ve taken the time to construct your own spreadsheet, it is important to keep it updated.  An hour or so of your time each month will pay off big when you are able to get a better handle on your cash flow.  With on-going cash flow planning, you can more accurately predict when you can buy that new camera or how much you can give yourself as a bonus this year.  Knowledge, after all, is power.

About the sample Excel file:

The sample workbook linked below has two tabs labeled “Example” and “Blank”.  “Example” is a twelve month version of what you see above.  “Blank” is the same worksheet without any numbers but with formulas intact.    Feel free to modify or fill in either using your own information.  Of course, if you add or delete lines or columns or make any other changes, it becomes your responsibility to make sure the formulas still work.  Enjoy!