These articles are about strategies to combat the recession. I ended my last post by posing the question on everyone's lips: what happens if my bookings drop? You'll need to have read my previous post to make sense of what follows, but to recap, based on the numbers in the graphic below, if I get 30 wedding bookings and average $5000 per job my income is $71k. If I could get 40 bookings I'd make $114k, even if my average dropped to $4600. All good, but what happens if I can only get 20 bookings? The answer is my income drops to $28k! I could still achieve my $100k income goal with just 20 weddings but only by charging almost 75% more than what I personally believe other people of my standing are - almost $8600 per job. If those really were your figures, how would you feel? Well, if they were mine I'd start to sweat, my stomach would feel queasy and my first thought would be, I've gotta cut my costs! I'm going to suggest some positive strategies in future posts, but first I need to focus on what won't work. (Heather reminds me to add, "in my opinion...") I know that you know I'm biased, but hear me out... Most people's knee-jerk reaction will be to cut their job costs - their album and printing costs. So, what if I cut my album and printing costs in half? Well that would be great if I could still get thirty jobs and still command the same price. I don't need a recession for that to make sense. My income would obviously go up. But it doesn't seem likely that giving my clients something less impressive is going to make it easier to book 30 jobs at the same price. After all, I've just abandoned perhaps the most important evidence that I'm a standout high-end studio... When I key in the variables this is what I find...

If I hold my prices with the cheaper albums but still only book 20 jobs I'll be slightly better off than if I'd spent more money on albums (obviously) but I'd still still have only $35k to feed the family and pay the bills.

If I drop my prices by a quarter in order to book 30 jobs I'll do slightly better - $43k. A lot less than my pre-recession $71k, but my best option so far.

But if I drop my prices by a quarter and still book only 20 jobs I'll be lucky to clear $10k!

What's to be learnt from this? When you start to play with your prices and with what you offer your customers, the outcomes are a lottery. Maybe you'll be better off in the short term, maybe it'll be disastrous. But two things are absolutely certain:

You've just taken your business down-market to survive. (Do you think "down-market" will be less crowded in a recession?)

You will still be down-market when the recession ends. (The down-market clients you've booked will be recommending you to their down-market friends.)

A wise friend of mine says, if you want to stay in business you should avoid decisions that have the potential to kill you. You're master of your own destiny, but in my opinion there are other ways to deal with the recession. With the negative stuff out of the way, we'll deal with some of those next. Comments welcome! Cheers, Ian PS These numbers come from my spreadsheet. If you'd like a copy so you can analyse your own business, please email me. It'll take a 2-3 days for me to respond, sorry.