I suspect if I was to do a balanced scorecard on my photography business at this point, it would show a gloomy picture. But like all businesses, the start up months are going to be difficult financially. Once the business gets some traction, that should turn around...if I'm lucky and good.
CAPEX has been painfully high, relatively speaking. I have replaced all of my gear, and added a lot to it. A new-to-me camera body, two speedlights, a flash bracket, external flash battery pack, stands, umbrella, diffusers, blah blah blah. Thankfully my lenses will do for now. At last count I was up to about $2,500. Like I said, relatively painful. I could easily spend just that on a camera body. I had considered not getting the external flash battery unit, but I did a bit of math and figured that at a cycle time of about 6 seconds, I would get only two shots of the bride and the other wedding party members walking up the aisle. With the battery unit, I cut the cycle time down to 1.5 seconds. Done.
Operational Expenses have been modest. Rather than buy a backup camera body and lens, which would drive my CPAEX up even higher, I rented from BorrowLenses.com. For $160 I rented a Canon 40D (same as my primary body) and a very nice EF 24-105mm F/4L IS lens for a week. I had considered going cheap and skipping this expense. Then I had a vision of Weird Uncle Al bumping into me before the ceremony and knocking my camera to the floor. A few minutes after that vision I had charged the rental to my AmEx. My assistant (who also happens to be my son) will use the backup body as a third shooter. If my camera fails, I'll just take his and he can use the old D30 we have as the "belt and suspenders". If my partner's Nikon fails, he will have to suck it up and use a Canon for the day. There are worse things in life.
With two speedlights and the external battery unit, I calculated that I need to take 48 AA batteries with me. That gives me what I know I'll need, plus a healty emergency supply. I'm thinking I'll stop at Costco.
I have some staffing costs to deal with. I split the revenue with my partner 50/50. Out of my share, I'll pay the assistant. This isn't the most fair way to handle the expense, but there are back office complications that make it the best way. So goes the family business...for now.
On the revenue side, I gave this weekend's client a very steep discount. The total fee will be $750 (excluding any prints). Yes, this is alarmingly low. But the fundamental approach to pricing strategy is clear: never price based on cost, price based on what the market will pay, minimizing consumer surplus. With no wedding portfolio to show yet, I figure I'm lucky to get a paying client at all! Depending on how you look at it, there might even be some supplier surplus in this deal ($750 cash + portfolio + experience + OJT). Anyway, here's how that breaks down:
Gross Revenue = $750
Shared Expenses = $50 (gas for round trip to Frostburg)
Net Revenue = $700
My share (at 50%) = $350
Pay for the assistant = $100
Expendibles = $40
Camera Rental = $160
My Net = $50
Ok, so I'm no Warren Buffet here. At $50 for the day, I would have to do over 50 weddings before I saw a return on my investment. But that's not really the situation. After June, assuming by then I have a worthy portfolio, I'll start charging our full "low low" price for weddings. And when the warm weather is here to stay I hope to do a bunch of candid portraits, which will have a much higher rate of return for now than the weddings do.
I went into this not expecting to make much money. So far, I have met my expectations.