I remember the feeling. Knowing I wanted my business to be something bigger than the basement studio in my home.
I was ready to make it more of a full time business. Get a retail studio and raise my prices, but like many of you, I wasn’t sure how to do it.
I get this question often from photographers who are ready to move a home-based photography business into a studio.
Before you take the leap into opening a studio (and raising your prices to possibly cover any additional costs you incur), you need to make sure you’ve thought through the decision.
I’ve seen many photographers prematurely open a photography studio and have the doors shut shortly after.
I didn’t move to my first studio (which had bars on the window and cost me $300 per month) until I was already making enough revenue to pay myself a salary that had replaced my full time ad agency salary.
That’s one of the first places where I see photographers making a mistake – taking on costs they don’t need to and thinking if they build it, clients will just automatically come. It doesn’t work that way.
In fact, when you take on a studio space you shouldn’t be taking a pay cut.
Before you take leap and open up a studio front, ask yourself these 5 questions.
1) What are your reasons for opening a studio?
Put your thinking hat on and find out the reasons why you want to open a studio.
- You hope it help you attract more clients (it may, but it’s not going to be dramatic enough in most cases to cover your new costs).
- It will make your business appear legit to clients and other business owners (this is an added benefit but shouldn’t be the sole basis for which you make the decision).
- You’ve outgrown your current space (a legitimate reason as well, but you need to look at how much additional cost you are taking on to have a new space).
- It’s always been a dream of yours (not a good enough reason, but we’ll talk through the financial aspects in more details below).
2) Are you currently paying yourself a salary from your photography business?
Make sure you are paying yourself a salary from your photography business.
If not, then you need to wait to move into a studio until you are. A studio isn’t a magic answer to bringing in more clients or allowing you to raise your prices. In fact, it just compounds any pricing and marketing issues you already have.
3) Are your cost of sales currently at 25% or less?
Find out your cost of sales.
This is the benchmark to follow to be profitable as a photographer. If they aren’t then you need to get these in line before you consider opening a studio.
4) How many additional sessions do you need to do to cover your costs?
Get to know how many extra sessions you need to do to cover the additional cost.
In the case of my first studio, my rent was $300 per month. I needed less than one extra session to cover the cost of rent and utilities. I knew I could do that and I didn’t need to raise my prices to do it.
5) How much does your average sale need to increase to cover your studio space costs?
Prepare a rough estimate on how much you need to raise the price to cover the overhead cost for new studio space.
If you didn’t get one more new client by having studio space, how much more would each of your existing clients need to invest to cover your new costs? If you would need to raise your prices by more than 20% to cover the overhead, you’re right in thinking your clients aren’t going to be happy and that you’re going to lose them. And that’s ok! But you need an aggressive marketing plan to find the right new clients who are willing to pay your prices.
There are so many things to consider when opening a brick and mortar location. These are just a few to get you thinking on the right path to building a thriving, profitable photography studio. Do you want to open your own retail location? Why is it your dream?
Want to Learn More?
If you’re ready to open your first photography studio, come join my free training that walks you through how to open (and keep open) your photography business in any economy.
