There are three things I find that photographers, as a group, are really, really bad at. One is changing direction/styles/offerings quickly enough to prevent a backward slide in business. The time to learn about a new process or a new venture in content creation is pretty much the day you hear about new stuff. So many of my peers in my age demographic were felled by the shift from film photography to digital. They feared the "complexity", overestimated the appeal of their current approach/aesthetic and were too cheap to invest a bit of money to at least stick their feet into the "water" and experiment. Once they got left behind they found it too hard to catch up and exited the field. My smart peers, also my age, were buying $20K digital cameras in the 1990s, figuring out the good points and bad points of digital and then letting clients know that they could offer cutting edge technology and cutting edge content. They did well. Clients crave the new and innovative.
The first takeaway is that change is inevitable and will come for you. Just like compound interest change can be your best friend or your worst enemy. For relative newcomers to a market new innovations can be an opportunity to bypass traditional barriers to entry and make a mark more quickly than was possible before. But the big lesson is that you can ride the front of the wave in a new development and attract the attention of paying clients or you can hold back and wait --- as your clients move away toward someone else's new acquired expertise and you plunge into irrelevance.
In a similar vein I noticed a decade ago so much resistance from traditional photographers to incorporating video production into their business offerings. We started shooting video projects on and off back in the 1980s but it really just became widely practical with the introduction of cameras like the Canon 5D mk2 which allowed photographers to enter the realm of moving pictures inexpensively and with good results; if they had the foresight to learn the basics and practice them until they became successful (see Vincent LaForet). Many photographers who embraced digital video a decade ago moved on from still photography to full scale video production increasing their income and increasing the range of higher paying clients available to them. In 2017 about half of my income came from video productions for medical practices and law practices. Clients I had already been supplying with still images for many years prior. We only had to show them that we were proficient to open up a new source of billing.
Learning video basics also enabled a whole generation to make good money pontificating on YouTube and getting paid for it. A profit center than never existed before...
The bane of unchanging styles. I recently watched a video by a photography influencer who bemoaned the idea that clients are no longer interested in "production value" but instead are focused on "authenticity" in the images they want. Yes, styles change. We need to change along with them. I remember a video production team here in Austin who, way back in the early 1990s, decided to make a 180° move away from their competitors, all of whom were using Sony Beta SP cameras or something similar to do slick, overly lit, over-produced videos for clients. They started experimenting with grainy, "authentic" Super-8 film camera production, made a reel of it and showed it around to the cool ad agencies at the time. They walked away with enough work to keep them busy for a couple of years. When the style ran its course they were already experimenting with something totally different. Now, some 30 years later and dozens of course changes later, they are still working, winning Addy Awards, billing and thriving. Even though the two team members are twice the age of their best competitors. Styles change. Markets change. The photographers and videographers who fall by the wayside are the ones who refuse to experiment and change as well.
People in general and photographers in particular wind up their careers in the red, financially, because they don't make good financial decisions. We all feel like we're bulletproof and riding a never-ending escalator up when we are in our 30's or 40's. When big jobs come through along with big fees there's always a tendency to overspend. To celebrate too hard. To over-reward one's self for a nice, but short blip of enhanced profit. In years past, when credit was easier to arrange, that might have meant upgrading to a bigger house, buying a much more expensive car, going on more exotic vacations and spending so much time at nicer restaurants that the restaurateurs started going on nicer vacations.
Another offshoot of that was the old saw that "one should invest in one's own business." Which photographers always took to mean that they should buy much cooler cameras and much more expensive lenses and other gear. Or, that they should invest in a beautiful studio space. Ah, to have been a bankruptcy attorney during an economic downturn in which over-mortgaged photographers with recently acquired studio spaces "transitioned" out of business. Investing in the right stuff is fine but over-investing is more a sign of an inflamed ego than it is a good business strategy.
While some of my camera purchases can be construed as over the top the reality is that we (me and spouse) economized and saved money at every turn over the last 30-40 years. We bought a middle class home 25 years ago and never moved again. We converted a garage to a studio and stopped paying downtown studio rent. We eat most meals at home. Happily. But when it comes to "investing in the business" my partner and I both think that means maintaining the things that directly make money for the studio but it also means putting profits into financial investments over the long term, not buying more stuff, taking more cruises or showering our families with a bunch of expensive gifts and showy largess. Yes, we were the parent's whose child got his first smartphone when he graduated from high school and was heading to college. A College education which we also saved for. Instead of buying big, shiny new SUVs or sports cars or second homes or whatever else people feel compelled to spend money on.
If you took good math courses in college or high school you can probably figure out the appeal of compound interest. We're not especially bright but we realized it was a winning concept. All small business owners should diversify outside their own businesses if for no other reason than to not have every single egg in one basket. A "basket" that depends on you showing up and performing every single day.
If you can take your ego out of your financial strategy and just do straightforward, conservative investing then, over the long run, you might be shocked at the assets you can accrue. And how comforting it is to know that you won't have to worry about unexpected expenses... or how to fund retirement beyond Social Security.
The last thing that I'll suggest here is that photographers, graphic designers and even videographers are, as a group, terrible, terrible marketers. I have a bunch of friends who are or were working photographers who refuse(d) to believe that they need to do anything more than put up a website with their favorite photos on it and send out a few e-mail "blasts" every year to the clients they currently or historically worked for. Much is made of the overarching value of "word of mouth" advertising.
The reality for many traditional photographers is that their clients have aged along with them and many are now exiting the market. The ones that are left have been marketed to by more savvy content creators who, over time, erode that original bond. A bond that most good advertisers know needs to be nurtured as often as possible.
Most businesses know that they'll lose X percent of clients each year due to retirement, relocation, a singular unsatisfying experience, the perception that their current photographer or supplier isn't really interested in them as a client anymore. Why would they think that? Because they haven't seen new stuff or heard from the artist in way too long.
We used to have a sign up in the ad agency I worked for in the 1980s. Its message was aimed squarely at our account executives; our sales team. It just said, "Lunch them or lose them." It spoke to the necessity, in that decade, of spending face time with clients. Especially the ones who had the power to sign checks or assign jobs. Preferably both. Marketing needs to include targeted social media, email campaigns, traditional direct mail but it can also include personal touches like "thank you" cards, sending flowers after a big project or just having casual lunches at which business is only tangentially discussed, if at all.
Finally there is the "reverse momentum" that living through a long career seems to cripple small business owners. They remember what their rates were ten, twenty or thirty years ago and they fear that they'll lose clients if they raise their rates --- even when inflation is taking a bigger and bigger bite out of everyone's spending power. The successful businesses that I know of and have worked with try to raise rates by ten percent every year in a quest to stay even. To maintain profit margins. To be able to reinvest in new technology which might drive new avenues of income. The suppliers that fail have the ingrained memory that Acme Gadgets is used to paying $X and they fear that Acme might leave them if they want/need to raise rates to X+10%. So each year, as costs rise, as prices all around them go up, the content creator who fears change makes less and less money at every turn. Even though the same clients pay more for groceries, gasoline, rents and charge more for their products, raising their own prices as needed.
Being in business is tough. That's why the majority of people in higher income countries work for the state, or the corporations, or as someone else's small business employee. And it may be that the advantage of being an employee is the reduction of a number of stressors and uncertainties owning a business could put in their lives. But the disadvantage is this: A freelancer may have 50 clients who cycle through the business in a given time frame. If one client moves on there are still 49 clients left to work with. And, one hopes, that #50 will be replaced. If you work for one employer and their business fails or they decide to eliminate a business sector and subsequently let you go you may have no one waiting in the wings to break your fall and will have to spend time and money to find another job. Or worse yet, another career.
There are logical things artists can do to at least give them their best chance at financial success. First is to find the clients who can and are willing to pay what you need and deserve. Second is to never stop innovating and offering new styles, points of view, products and services.
Suppose you are mostly providing photography but you take classes about video, experiment with it in your free time, maybe start working on video projects in some capacity for someone who is very successful at making video, and eventually become able to also supply video services in addition to your photography. Now your photo clients can also provide an income stream as video clients and your video clients are an easy sell for your photographic services.
Finally, when you have profits, extra cash, unexpected windfalls, etc. instead of patting yourself on the back with a new Porsche Caymen or a trip to Barbados consider putting the money into long term financial investments. Find a good certified financial planner. At some point you'll get tired of chasing jobs but your money, well invested, will never get tired of working for you. It works all day and all night for as long as you have it invested. And many years later you will realize how smart it was to be less manic with your money. Because you'll still have some.
We all make choices. Some work out.