Thursday, September 25, 2008

Business Day Thursday: Where Has All The Business Gone - Part 2 - Running Scared!

Good Afternoon Everybody,
Wow! Last week's Business day Thursday post created quite a bit of buzz. Between the emails I received all the comments left by our loyal readers, I think we got a good cross section of what people are thinking. A lot of you thought it was simple market conditions and even with the Wall Street chaos over these last several days, I still don't buy that reason as the MAJOR contributor to the situation.

Sure, mortgages are being foreclosed upon, but folks, that's because of the greed-mongers set those unfortunate people up to fail with their predatory lending practices. I feel these were not really our clients anyway. Am I missing something here? A person who can't really afford to buy a home, but can afford a $10,000 - $20,000 wedding where photography is about 10% of the budget historically - I don't think so.

Let me be also be clear here - I was not putting down any "part timers" or "emerging pros". I continue to have the highest respect for all those working hard to improve their photography and their business success. That's the purpose of for all pros, semi-pros, and emerging pros alike.'s purpose is to also raise the level of professionalism in photography. That includes how we conduct our businesses and interact and service our clients.

The bottom line for me is this; Digital has brought a lot more enthusiasts into the market where the "PIE" is only so big, but now there are many more slices taken out of that pie. Consider that the number of photographers offering services has grown exponentially over the last 5 years. You can verify that with the exponential growth of digital cameras being sold in that same 5 year period. The greatest growth has been - surprising in the DSLR department - up over 75% for the second half of 2007 over the first half of the year! From January to July 2008 there have been nearly 11,000,000 DSLRs shipped to North America - 120% more than last year for the same period.

Folks, for me the "writing is on the wall" - digital photography is fun, it's easy to learn, it's a kick to play and experiment, and many new digital adopters see it as a way to make some extra money. Oh, and speaking of the economy, it seems to me that those buying these new digital SLR wonders are unaware of the downturn.

Here is the bottom line as I see it - there are a lot more pieces coming out of that pie and the pieces are a lot smaller, but all those small pieces add up quickly. But it's even more than that. What many of these new photogs are charging for the pieces of the pie is only "beer money" - my term for a little extra cash many photographers make selling cheap prints. Look at so many Craig's List listings - "Will do your wedding photography for free for the experience". Yep, that's the guy/gal I want shooting my special day. But, as Anonymous said in the second comment - "good enough" has replaced quality on the part of the buying public's mentality these days.

So is cheap and "good enough" the direction professional photography is trending these days? Unfortunately, I think to a large part - YES. Why, because if we have experienced a 10 fold increase in photographers offering their services and the level of experience is tentative at best. Add to that - the buying public's perception of professional photography is seriously downgraded. Basically, they can't see the forest (good photography) from the trees (so much mediocre stuff being presented as professional photography) by a huge percentage of new practitioners of the craft.

Yes, I do believe the photographic sea is awash with mediocrity, witch is to be expected especially when I hear comments like, "I need to get a better camera because this one just does not do a good enough job." In a huge advertising campaign by Nikon last year stated, "Anyone can take great pictures with a Nikon D40 in their hands." In fact the poll they published with the ad verified that 33% of the respondents agreed!

I agree that the market is changing and that the buying public is looking for something different, and yes, in many cases, cheaper too. But the reality is this. If you want to sell it cheap, don't expect to give up your day job anytime soon. Because once you've gone down that road it's hard to change the course later.

I was just visiting with our upcoming president of the state association. She shared a story with me about a photographer she met at a class she was presenting. That photographer said she was as busy as she wanted to be but was making no many! She had just shoot 90 pregnancy sittings and there was not much left in the kitty at the end of the day. When my friend asked her for specifics on her costs, overhead, etc..... it was determined that she was going to lose $10,000 for the year! After hearing that fact, the photographer confided that her accountant told he she made $4.00 profit from the year before!

This is the mentality of way too many new photographers penetrating the market. "I sure am busy, it sure is fun, and I don't have a clue as to how much money I'm making or losing on each job." Remember, these are the people taking pieces out of that pie as well.

If this is the new competition, then what's the solution? For starters, the "forest" (good photography) needs to be more visible to the buying public. Marketing is absolutely key here. We need to be marketing more than ever before. I talked with my friend Tim Walden who owns Walden's House Of Photography in Lexington, Kentucky. He reported that his business is up for the year, but he has never worked harder at marketing his business. My friends, Kent and Sara Smith said exactly the same thing. They will crack a million dollars this year, and have been busting their behinds harder than ever to keep getting the word out. I think, therein lies the secret, as Clayton said in his comments, "... to be viable to our clients... to be relevant..." Yes, we need to constantly re-evaluate our photographic style and product offerings. We need to keep our websites fresh and slick - our website is the window dressing for our business. We need to blog - today's clients want to feel they know the person they are hiring.

And, finally, we need to run scared, constantly evaluating the market, the competition, and the economics and working pro-actively to fine tune all aspects of our business both photographically and financially! I love this African proverb - it says it all.

"Every morning in Africa, a gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed...every morning a lion wakes up. It knows it must outrun the slowest gazelle or it will starve to death. It doesn't matter whether you are a lion or a gazelle...when the sun comes up, you'd better be running."

Hey gang, that's it for me today. Thanks you to everyone who offered their comments, suggestions, and insights to this discussion - it was much appreciated. I'll see everyone tomorrow for Inspiration Friday: What Inspired Me The Most This Week. See ya' then, -David

Links related to this post:
The Complete Photographer - My Guest Blog for Scott Kelby
Is Wedding Photography Dead?
What It Takes To Be Great


  1. David,

    Here is a true story that may give you an idea of where you are wrong in underestimating the effects of the economy on disposable spending.

    I have worked in banking most of the last 15 years. I was laid of in May and while I wasn't too concerned, I significantly cut back on my spending. I started a short term consulting contract the other day and decided that before I went in I wanted to get a haircut as I may have let my hair grow longer than the standard professional length, so I went to a place near where I used to work that catered specifically to male clients and drew its clients from the people working at JP Morgan and Bear Stearns and other of the investment banks in the midtown area and charge about $60 a cut. I was talking to the stylist and she was saying that bookings were down so much that they were starting to worry that they would have to close down. So if people who think nothing of dropping $60 plus tips on a haircut every week or two are starting to tighten their belts on something like that, imagine what they are thinking about the several thousand dollars that they have to spend on photos for a wedding, either their own or a son or daughters....

    People are actually taking this seriously and are seriously cutting back on spending on luxury items, even people who could still easily afford them. Peoples confidence is way down and if Congress doesn't pass some sort of package to sure up the financial markets today, you could easily see a 10 to 20 percent shock to the equity markets in the next month.

  2. I have been photographing families from Kentucky to Texas since 1965 and I have always worked as much as I wanted and I have always had more work I could do. It's not the economy that keeps you from working, it's you.

    Excellent photography and excellent service count more today because there is so little of it.

  3. @ alessandro

    Spending $60 for a haircut is a little different than spending $2000 on a wedding photographer to capture a once in a lifetime event. I get a haircut once a month, let's hope my daughter only gets married once in her life. I'm also a little offended that fantastic wedding photography is being compared to a haircut, not thinking so. Nor do I think that a business that is driven by greed and the love of money should be saved by the taxpayers of this nation, let them fail! It's time for some new blood anyway.

    David, once again you've given some clarity to this troubling situation, thank you.

  4. I agree totally that a photography business -- or really, any business -- is built or marketing, but also customer service and sound business practices. I am one of the emerging pros that David is talking about, and I have no plans to run a business that makes $4 profit for a year. That's just crazy.

    But I also know that getting to a point to where you can make a living from photography takes a while. You can't just go down to Circuit City and buy a $500 camera, call yourself a wedding photographer and expect to make six figures. You have to get your skills to a point -- and I'm talking about your business skills as well as your photography skills -- to where people demand your services.

    The bottom line is that if you do quality work, provide it as promised to your customer, go the extra mile, and get yourself in front of people, then people will pay you what you are worth, whether or not the economy is good.

  5. David:

    I concur with your assessment. Customer service will always be the key to success whether you're selling hot dogs on the street corner or steaks downtown. Every clinet wants to be treated right. And marketing will maintain your name in the public eye. As an emerging pro I am struggling to achieve a balance between competitive pricing and my level of experience. However, I am committed to improving both my technical skill as well as my business acumen to be successful.

  6. There are some good points made in today's blog.

    Any else reading Dane Sander's book "Fast Track Photographer"? He also discusses this topic.

  7. A couple of years ago, I managed a photo lab that had a studio that did head shots for realtors and mortgage lenders.
    I could not believe the "duh" level for some of these folks.
    "No sir, your other left." I am sure they have shaken out of the system by now. Our business shakes out the fluff, too. Four dollars profit? Yeah, baby!
    On the other hand, I do not need to sell a three hundred dollar eleven by fourteen. I do not have to support a few retouchers, a couple of sales people, and a crew of schleppers.
    Maybe, someday.
    Thanks, David for the thoughtful topics.

  8. I've not read your first post yet, but, I just ran across your part two. I appreciate your thoughts.

    Photography is not the only business effected by technology. How many of you print your own images, create your own audio, work on your web sites, design your own brochures or ads and print business cards cheaply. Technology is constantly changing the way everyone does business including our clients.

    I've always said you need to bring something new to the table that the average photographers can't do with point and shoot.

    Marketing is also different. The opportunities for a larger audience and opportunities are the trade off for positive advances in technology.

    It is tough and their is a lot of competition, but, it is possible to grow your business even in this economy.


  9. Guided Light Photography:

    I think you missed the point, as it seems most of the public did in not trying to understand what the Treasury Secretary was trying desperately to prevent.

    My comparing a $60 haircut to Wedding Photography is absolutely relevant as both are luxury items. You can go to Supercuts and get a $10 haircut or you could get Uncle Joe or the Photography student that answers your Craigslist ad to take your photos instead of hiring the pro who, while delivering a better product also will charge equivalently more. Jesus taught in parables too.

    What your ingnorance fails to understand is that you were going to pay one way or the other. Today the US Stock Markets lost a trillion dollars in value. Where do you have your retirement money invested? Think maybe you have a lot less today than you did Friday? Have kids who's college funds were invested in mutual funds? Better hope they are really smart or really good at sports. Have any business loans you will need to be taking out anytime soon? Be prepared to pay several percentage points higher than you would if the bailout works properly. Have you taken out a Mortgage in the last 15 years or a home equity loan or refinanced your mortgage at a much lower rate than the original. Well you have the greedy Wall Streeters to thank for that. Mortgage Backed Securities repackaged the loans that were on the books of your local banks and freed them to lend that money they freed up by repackaging the loans to you at a lower rate. If it hadn't been that the majority of this country is too stupid to understand the first thing about credit, being overly optimistic about their prospects for future income, over-buying and over-extending themselves to the point where they couldn't pay what they promised they would, we wouldn't have seen these problems happen.

    This bailout wasn't about saving the Wall St millionaires and billionaires, it was about keeping this country from repeating what it did in 1929. But people like you are to cynical to see the all too plain writing on the wall. Henry Paulson's plan would have let the government sure up the banking system for $42 Billion a year. That is how much it would have cost the tax payers each year over the next 30 years. Now which sounds like the better deal $42Bn a year for 30 years or $1 Trilion in one day?

    All people like you are capable of is regurgitating what you hear from no nothing pundits who bleat on to their flock of sheep to boost their ratings and line their pockets. Let me ask you who is hurting worse today, the billionare who just lost $200 Mn dollars today or the person retiring next year whose IRA went from $200k to $160K. The rich don't get hurt, they suffer setbacks, the middle class and the poor get hurt, and it is usually their own thoughts that they are sticking it to the man that leads them down that road in the first place.