The future of the business of photography is all about mixing media.
My number one piece of business advice for photographers is to become a better writer. How? Practice every day. How about a blog?
BLOG WARNING: THE INTENDED AUDIENCE FOR THIS PARTICULAR BLOG IS THE GROUP OF STUDENTS I'LL BE SPEAKING TO. ESTABLISHED PROFESSIONALS SHOULD FIND THIS BORING.....
I have the lofty responsibility of talking to some advanced students who are near completion of their degrees in commercial photography. I have been asked to speak to them because of my hoary and enormously long tenure in the local photography market. And, probably, in no small part, because I am on the advisory board for their discipline at the college. I've done this every semester for as long as I can remember. Every semester I give a slightly ( or greatly ) different presentation.
This year I'll be stressing the changing nature of what constitutes the photography industry. I maintain that we've left that traditional and narrow niche behind and that the key to success in the current economy is to embrace the role of "creative content creator" by learning a collections of inter-related skills, like film making, programming and marketing. These are skills that can be bundled for more potency and sold to a wide variety of end users.
But mostly I'll talk about pure business. Supply and demand. Marketing. Positioning. Even branding. And the place I'll start my talk is about conservation of resources. I submit that most photographers who fail to thrive are victims of ignorance about money. The making of it; and more importantly, the conservation of it.
The key to success in photography is to: (a) find clients who will pay you what you are worth. (b) do the job. (c) market the mutual success you shared with your client. (d) get paid by the client. (e) find the next client (or better yet, do more jobs for the original client). But the primary key for long term success isn't the photography part at all, it's what you do with the money you get for doing the work.
I hear over and over again, from younger photographers mostly, that they are re-investing in their own businesses. From what I've distilled, based a life spent in photography, this may be one of the worst investments you can make.
Sure, you need to spend some money, regularly, on marketing; and every once in a while it's probably a good idea to upgrade your camera gear, but the long game calls for a much more disciplined, and much less fun (in the short term) strategy. That strategy would call for putting money in investments that are totally outside your business. Maybe even outside your industry.
I have a partner/spouse/mentor who is much smarter than me about the big picture. It's because of her that, many years ago, I started an SEPP (single employee pension plan) and put a set amount of money into it every month. Rain or shine. If you look at the meager balance back in the early years and then look at today's balance you'd think I was a genius but it's just the power of compound interest. And discipline, combined with the knowledge that, as a freelance business owner, no one else is saving up to provide a pension for you. You have to do it yourself.
At the end of every year my freelance friends will tell me that their accountants have counseled them that they need to spend XXXX amount before the end of the fiscal year on equipment. In this way they'll be able to take an accelerated cost recovery (depreciation) and avoid paying taxes on this money. But the weak spot of this argument is that the gear they buy (especially in the digital age) begins a quick and somewhat sickening depreciation in resale value the minute they pull it out of the boxes and charge the batteries.
My people have always told me that it's best to figure out how much "extra" money you have at the end of the year and to stick that into a tax advantaged retirement account, or to bite the tax bullet and put some of the money into an (after tax) Roth IRA account. After all, once the cameras grow old you can't sell them for much, or eat them, but the money you stick in an SEPP or traditional IRA is money that: A. You get to keep. B. That appreciates in value. and, C. Reduces your total income tax liability for the year in which you save it. OMG!!! You get to keep the money and, if you can keep your hands off of it then it also grows in value.
My investments seem to follow the basics of investing. Nothing dramatic and nothing too risky. Most experts advise sticking to mutual funds (bundles of stocks) or, at worst, stocks in companies whose products and strategies you really, really understand. For instance, if you have been an Apple Computer user since 1984, and understand their products and their strategic value, then you might want to invest a modest percentage of your savings in that stock. Had you invested in Apple stock back in the late 1980's, say to the tune of about $10,000, you would not be reading this right now because you'd be trying to figure out how to spend the enormous amount of money you've accrued. Hint: It's millions and millions of dollars. What is your stock photography library worth just about now?
The same thing applies to financing your kid's college education. Every other thing I read today is about the impending student loan crisis. But, if the average college educated and professionally employed parent of twenty one years ago started saving about $250 a month in a 529 college savings plan they would have an ample supply of money today to cover the cost of in-state tuition, as well as room and board, for their current college student. Add $100 more per month and you'd pretty much have the $65,000 per year you'll need to pay full pop at a prestigious, private, four year university.
Sure, sure, this is long term, old guy advice. But what if you are planning to live fast and die young and leave behind a beautiful corpse? Why would you bother to save anything in that scenario? Good question. I'll answer it with another question: When is the last time you felt like you needed to settle for a lower fee and a crappy assignment because you had your back up against the wall to pay rent? How many annoying, low budget clients have you accrued along the way because you couldn't afford the risk of not having their (meager) check by the end of the month to pay bills that you knew were coming? How poorly have you leveraged your artistic freedom (and your free time) by having to service an ever growing debt in your business?
That new medium format camera sounded like a good idea when you put it on that credit card but it really didn't increase your business much, did it? And you keep making payments on that credit card so you can eventually "own" the camera, and by then you may have paid a quarter to a third more than the original purchase price just in interest. On a depreciating asset which will probably be obsolete by the time you pay it off. Make the minimum payments on that credit card and you may NEVER pay off that camera completely---even long after it's gone.
The over-riding plan? Earn money, save money, and make the money work for you. If you start early enough, and keep yourself debt free, at some point you'll be able turn down all "stinky" jobs and still sleep well at night because your investments will keep growing and (best case scenario) pay regular dividends that can either be reinvested or enjoyed. You'll get to pick and choose the projects you work on and the clients you work with. You get to set, and stand by, your rates. By being a disciplined saver you buy back your own freedom and can give yourself the "bonus" of free time to work on your art. Or you can just lie on the couch and read novels. Being a good steward of your money is a smart business strategy.
Freelance businesses are not for everyone. If I didn't have a smart, frugal and strategic partner I'd be a dead man by now. Or at least dead broke. Yep, that's what I'm thinking about telling the class of college commercial photography students.
Glad someone told me.
Studio Dog can count the treats in the jar on the counter. When we're running low she comes by and scratches me on the leg. I refill the jar. Her investment strategy pays off.
the lavish bokeh of a micro four thirds camera and a Leica 25mm Summilux lens.
Expensive gear is meaningless and its value is fleeting. Learn to use good, inexpensive gear.... or rent.
More good investment advice: If you smoke cigarettes give up the habit for two years and save enough to travel through Europe taking photographs with the proceeds. It's a win/win.
Always marry someone who is much smarter than you are.
Don't spend a fortune on a rented space. I was paying $1,800 a month for downtown studio space from 1988 to 1997 then I bought a house and built a studio on the property. My mortgage for the house and the studio space cost less than my previous studio alone. We've done about 2,000 jobs and five book projects out of this 675 square foot space since 1997. And the coffee machine is just through that red door and 12 steps into the house beyond it.
A total non-sequitur. I just happen to love big scrims.
It is possible to raise a child, from infancy to college, with a freelancer's income. If you are disciplined, and not addicted to the unnecessary trappings of a complete consumer lifestyle. Cook at home more. Watch free TV. Always choose necessities over wants.
Surround yourself with people who value art, creativity and camaraderie over trendy, expensive stuff.
choose wise friends.
And finally, never go out without your camera.