Keeping Your Eye on the Right Ball in Your Photography Business | Cash Flow Planning

Right Ball in Your Photography Business


Photography Business Institute
Photography Business Institute

Cash Flow Planning for Photographers

Today’s blog is a guest blog written specifically for the photographers in our audience at Photography Business Institute. It’s part one of a two part series on one of the things we see professional photographers get into trouble with – cash flow.

You may have done this before – looked at the balance in your bank account and saw you had a little extra so decided to splurge on a few purchases. A few weeks later (or maybe even days) you realize that some of that ‘extra’ cash in your bank account actually needed to go toward upcoming expenses, like your lab fees, a second shooter or other bills that hadn’t yet arrived. Whoops! Now you need to figure out where to get more cash to cover those expenses. Help!

As photography business owners, we need a constant flow of cash into our business and not just to purchase a fun new lens, a fabulous bag for our camera or a new backdrop.

You need to have access to cash to keep your equipment in working order and pay for the must-have systems for editing and putting together sales presentations that excite and thrill your clients as well as the billing and accounting systems for keeping on top of where your money goes. These expenses all add up and are costs of doing business when you’re a professional. Cash flow planning goes beyond paying yourself (or any employees you may have) and looks at what fun things you can afford to invest in (like a new camera), when you can afford to hire, rent a studio space, etc. Without having a grip on your cash flow, you’ll have trouble making informed decisions to keep your business healthy.

Now I’ll turn it over to our guest blogger, Jerry Weiner of PWD Edits, an expert on helping photography business owners manage their finances so they can grow their business and pay themselves the salary they want.

Cash Flow Planning – What Is It? 

Cash Flow Planning is the act of projecting when you will receive and spend your cash.  Individually, you need to pay attention to income coming in and the expenses you need to pay out when cash flow planning.  To calculate the amount of cash you will have at the end of each month, simply summarize your income and your subsequent expenses.

When you’re planning your cash flow, you need to look at least 12 months into the future, recognizing that the farther out you go the less precise the numbers become.  As long as you are realistic, this is a case where any estimate is better than none.  Cash Flow Planning is an on-going process that requires updating estimates as better information becomes available. So for example, once you book another wedding for November, you can update your estimate to reflect the new expenses and income that will result from that wedding.

Why Is It Important?

Cash flow is the life blood of any business.  It’s like the food we eat and the air we breathe – without cash the business cannot survive.  This may sound harsh, but it is very real.  No cash flow, no business.

You may think of yourself as a photographer, but most photographers are also small business owners.  As such, it is important to understand the skills necessary to operate your business as well as your camera.  Just as better images result from better use of your equipment, a more successful business results from better use of the tools needed to run it.  Cash Flow Planning is one of those tools.

Real Benefit – It’s Not Just About Paying Your Bills

Paying your bills is hard to do if there is no cash flow.  Simple enough, but this isn’t only about paying your bills or buying a new camera.  It is about understanding and running your business.

Cash Flow Planning requires asking a lot of “What if…?” questions.  Asking those questions is the first step toward figuring out how to navigate the future and grow your business.  Thinking about the possible answers is why the process is worthwhile.  The answers themselves aren’t as important as the process of considering the possible outcomes.

Added Bonus – Cash Flow Planning Can Support Pricing Decisions

Every business has a breakeven point which has to be considered when setting prices. The breakeven point shows you whether your business is actually making money or spending more money on expenses than it brings in from clients. Believe it or not, a lot of photography businesses we see are actually just expensive hobbies that while they have paying clients, aren’t charging their clients enough to cover their expenses. The breakeven calculation looks at your costs. It first separates costs into job-related (variable) and overhead (fixed).

Job related costs include things that you wouldn’t have if you didn’t have that particular session on your books like post-production fees, lab fees, etc. And fixed costs are things that you’ve invested in that you have to pay for regardless of whether you have a client or not. Things like your camera, your studio, employee costs, electricity, internet, etc. At some point you may want to similarly organize your Cash Flow Planning so that you can integrate it with your Breakeven Analysis.  This will improve the information available for making pricing and other resource allocation decisions.

Getting Started

The easiest way to keep track of your Cash Flow Planning is to put it into a spreadsheet using your actual numbers and a few simple formulas.  While that may be uncomfortable territory for some, it is a critical exercise for anyone running their own business.  The guide Can I Afford That New Camera? provides tips on how to get the process started and keep it going over time.

Hopefully now you have a better understanding about why cash flow planning is an exercise you need to do if you want to grow and have a successful photography business. In part two of this series that we’ll be sharing later this week, Jerry will dive into two other tools you can use to help you with your cash flow so you are setting your photography business up for success.

Want to learn more?

Are you ready to change your pricing from a fear-based reaction to a business decision?

The profit is in the pricing! Your prices even help you attract your model client while scaring off the clients that just don’t fit.

Join me in this free 60 minute webinar to learn how to profitably price your photography. Seating is limited. Reserve your spot now!


Keeping Your Eye on the Right Ball in Your Photography Business | Cash Flow Planning

3 Ways to Market Your Photography Business Without Spending Money

A marketing plan is vital for any business, but as portrait photographers, some of the most successful marketing strategies don’t require big investments. You can watch your business grow by getting out into your community, talking to people, connecting with other...

Why Portrait Photography Is the Perfect Stay-At-Home Mom Side Hustle

While being a dedicated stay-at-home mom is a job all on its own, some moms (and dads) are also interested in finding flexible ways to earn extra money for their families. However, adding a new career to an already busy life of managing a house and caring for children...