After a fairly good start to 2008 in the social photography business sector LC members are reporting continued wedding bookings and reasonable sales. An air of optimism surrounds the UK wedding and portrait market at the moment but financial analysts continue to predict a downturn in UK retail through 2008 and well into 2009. This is driven by high inflation, predicted to reach 5% and the ‘credit crunch’. Here is my 10 point plan to safeguard your business in the troubled waters ahead.
1. However well your bookings for weddings and portraits are coming in now, have a “Plan B” – in case your business is hit by something unexpected like a lack of response from this summers advertising. Bookings for weddings tend to have quite a long lead time and it is wise to have a promotion or competition waiting in the wings you can run at short notice to generate new leads.
2. Act now, don’t wait for things to get bad before putting these plans in place.
3. Cash is king: have the best cash management approach you can, it is one of the most important parts of your business. If you need a stronger out of season cash flow, then putting your ‘booking fee’ or ‘deposit’ up to at least £500 per wedding is a good way to start.
4. Know where you are financially: Make sure your financial records are robust and up to date. You should be able to produce a balance sheet report in just a few clicks of a mouse. This is an instant guide to your current financial position.
5. Have the best possible relationship with the bank – it’s essential they are fully aware of your business’ financial situation. Plan your profit and loss forecast at least 6 months ahead.
6. Even if your booking rate starts to slow down, always be in control of costs: know which are variable, can be acted on and how; Keep stocks of folders, albums and other consumables to a minimum. Stop ineffective advertising immediately and switch to other less costly and often more effective marketing strategies. Put off equipment upgrades and make do with the kit you have until things improve.
7. Rehearse the most difficult conversations that may need to be had with suppliers, clients, customers, employees and financiers should the worst happen.
8. Price properly – don’t over-react to market conditions, understand whether demand is price-sensitive and don’t give profits away. The last thing this industry needs is a price war driving down profits. Compete on quality not price.
9. Have a well structured database of past and current clients that you can work your way through on the phone to generate future portrait bookings. Stay in touch with your clients and help them plan their ongoing need for professional photographs. In a recession you may need to make twice the number of calls to generate the same number of bookings but that extra effort will ensure you maintain your market position and profitability.
10. Stay positive. A positive mental attitude attracts customers and some experts say that the sales process is best described as a transfer of enthusiasm.