This is the third in a series from Megan DiPiero with advice about how to build a stronger brand and brand message— to add purpose to your marketing, draw attention to your service, and ultimately increase sales. 

Click here for Parts 1 and 2. Today, Megan suggests some questions designed to help you set profit goals.

Okay, so you have identified your purpose and passion, and you know the client experience you want to create. 

Now, what systems will you put in place to deliver the experience—the brand promise—that you hope to share?

For this, you really have to dig deep in to your numbers.

Once Subway decided that their driving aim was to deliver fresh food fast, they had to put pen to paper, and create a business plan to achieve that goal. Consider that Subway works in the high volume, low cost arena. Their world looks very different from Ruth’s Chris Steakhouse, which is decidedly lower volume, higher cost. From the door, to the dress code, to the napkins, to the price points… every single aspect of these two steak-selling brands are night-and-day different. If you aspire to sell the "portrait experience" like Ruth’s Chris sells their "steak experience", you’d better know how to price and craft a "luxury experience".

So here’s another list of questions for your consideration. You should know the answer to ALL these questions like the back of your hand. If you are hazy on the details, that would be a great big flag that you need to work on these fundamentals before moving on to marketing with passion and purpose.

KNOW YOUR NUMBERS

1) What average sales goal MUST you achieve per client to run your business profitably?
2) What average sales goal are you currently achieving? Don’t ballpark this. Know it. To the penny. Be sure to include no-sales and low sales.
3) How many clients do you need per year? Per month? Per week?
4) How many clients are you currently booking per month?
5) What is your current Cost of Goods (COG) for each item or package you offer?
6) What is your current average Cost of Sales percentage? (COG PLUS shoot costs divided by the total sale.) What I am calling “shoot costs” here would include costs that are related to a particular client. If you don’t have the client, you don’t have the costs. These may include: makeup artist, shoot assistant, food or beverages served, third-party image processing, packaging, shipping, payment processing fees, etc.)
7) What are your overall Operating Costs not related to specific clients?
8) What Owner’s Compensation do you expect? (Salary).
9) Are you running healthy margins based on the numbers above? 

I would recommend having a 25% or lower COS and 45% or HIGHER net profit plus owner’s compensation. (Numbers based on a home studio; commercial studios would be closer to 35% net profit plus owner’s compensation). These are the same financial benchmarks recommended by the PPA.

KNOW YOUR SYSTEMS

1) What are your primary responsibilities in your business? Which of those responsibilities directly make you money? Which of those responsibilities do NOT directly make you money and therefore could be outsourced?
2) What training systems do you have in place to successfully outsource business responsibilities that you have mastered?
3) What systems do you have in place to create a consistent experience for your client? Would a client from two months ago get the same experience as a client today? Would a client from two years ago get the same experience?
4) In what ways does your brand reflect your purpose and passion? 

TIP: The Book E-Myth Revisited by Michael Gerber is a great resource for you as you look to your systems approach. 

Once you have answered these questions you will know exactly how much money you need to make in order to make a profit each year. Now that you’ve identified this, you can go into your marketing campaigns with direction and purpose, to target the specific clientele that you require to make a profit.

Megan

If you liked this post, be sure to head over to Megan’s website and Facebook group to check out her upcoming business and photography mentoring workshops.

Be sure to read the final post, 'Sharing Your Brand', coming soon.