Spending less and charging more is what we all would like to do. If this was easy, everyone would be doing it. However this is too simple a quote, as it is probably fairer to say that ‘if a close eye is not kept on matters, then the margins in place to make your business some profit, gradually reduce’.
Suppliers can incrementally or inadvertently charge more, or you can feel the need to buy more expensive kit because of market fashions. Relationships with customers can get cosy and you gradually offer them friendlier prices.
Whatever the reasons it’s important to regularly review contracts with suppliers and the pricing on your products. The prices you offered in the first place will need to reflect the existing costs your business entail.
SO WHERE CAN YOU CUT COSTS?
- I.T. The cost of hardware and storing images can quickly mount up when thousands of images become the norm for a job in this digital age. Space on portable and installed hardware can quickly become limited so the best solution is to use the cloud. It is cheaper, more scalable and fast becoming the norm.
- Outsourcing. Much like IT and moving data to the cloud, outsourcing is a critical part of running a business however small or big. This can be applied to all aspects of the business to include staffing (hiring full-time or part-time contract staff), accounts, call-answering or virtual receptions. These are all things that with limited funds, can be used temporarily until cash reserves become available for more permanent solutions.
- Regular partners. Much like your usual customers, you are a regular customer for suppliers and venues and this is likely to continue then it is more than reasonable to request a discount for this constant use.
- Intern is not a dirty word. Recent past has given the role of intern a less savoury profile than it deserves. As long as you are prepared to pay something reasonable for someone who needs experience of working in a business or of shadowing a professional photographer such as yourself, then it is accepted practice to find people to fulfil those more mundane, unskilled tasks as interns.
HOW CAN YOU CHARGE MORE?
- Keeping your relationships intact. It’s easy to alienate your early customers by raising prices but if they understand your reasons, there’s no reason why those relationships should not just get stronger as a result. Investing in your services, your website or taking on better equipment. All valid reasons.
- Forget yearly. It is better to make smaller, incremental increases two or three times a year than a bigger hike once a year. If you have started low then a big jump will be hard to justify. You must increase prices at least annually though, just to keep up with inflation.
- Computer time and per image. Serious consideration should be given to charging for the time spent in front of a screen sorting through digital stock. On that note, charging on a daily rate increasingly seems out of date when charging per image is a more logical approach.
- Improve your service offering. By offering an enhanced service allows you to justify a reasonable hike in rates. Can you now offer online access to your client image gallery? Can you guarantee a faster turnaround on the finished images?
Customers are more likely to pay more if they feel as though they are getting more.
How have you cut your costs over time? How have you raised your prices throughout the years?