Money Talk – Episode 016 – A Photographer Podcast Interview

On today’s episode of From Nothing to Profit, Kia and Matt talk about money. Listeners wanted to know how to choose what to sell and how to price those things, what to spend money on and what not too, and more, so Matt and Kia answer those questions in this podcast. Kia is always looking for new ways to hang client’s images on their walls, like super ornate frames or acrylics. Matt is always testing different versions of products to see which sells best. Make sure to take notes about how Matt and Kia markup their products to make sure their costs are covered and make a profit. Matt and Kia both keep a list of things they want to be able to purchase and things they wants to invest in, with that profit. Education is always high on that list, as well as large wall displays for their studios. You’ll also want to listen in to what Kia and Matt buy that they shouldn’t. Kia uses StudioCloud and Quickbooks, doing her own books and payroll. Matt used to use Successware, then switched to a bookkeeper with Quickbooks. Matt cautions losing visibility into your numbers when you start outsourcing your books. Know your numbers.

Books:

Profit First (https://amzn.to/2Ri24Gj)

Good to Great (https://amzn.to/2GFAz5l)

Resources:

Digit (https://digit.co/r/-ksipC9aI-?wn)

Read Full Transcript

Transcription was done by Temi.com which means it’s an AI generated transcript. The transcript may contain spelling, grammar and other errors, and is not a substitute for watching the video.

Speaker 1: [00:01] Welcome to from nothing to profit, a photographer’s podcast with Matt and Kayak where each week they talk to photographers about what is working in their business now so you can swipe those ideas and grow your business faster.

Matt: [00:16] Hey everybody, welcome back to from nothing to profit. So today’s gonna be a little bit different because Kira and I have gotten some feedback and some of you listeners wanted to hear a little bit more from us. So Kira and I came up with a theme today, what we’re calling the money talk because there’s been a lot of questions sent to us about this. So we’ll kind of go back and forth on these questions. But real quick, let me tell you guys the questions that people have asking so I’ll just run through them real quick. So what do you guys decide to sell or how do you guys decide to sell certain things? Um, how do you price items and how do you deal with markup now that you’ve made money, how do you know what to spend it on? What’s lead into questions like what are some really smart things to buy or use your money on and then what are some dumb or irresponsible things to buy? What do you buy a lot of and shouldn’t and should not buy. So that’s like what our, what our guilty pleasures that were like really bad about buying. And then how do you do your bookkeeping because in some previous episodes we talked about bookkeeping. Um, so how do you do bookkeeping it? And then there was a lot of questions around some more questions around profit first and what that’s done for our business. And then also some Dave Ramsey questions. So Kaya, I’m excited for this one. This should be definitely a good one.

Kia: [01:34] Yes. Yes. I’m so excited to be here and I think this is a, a, you know, a question that works in great with the, you know, the whole point of a from nothing to profit is, you know, what do you do with that profit and how do you create it? So I’m excited to be answering these questions today. I think it’s going to be great.

Matt: [01:52] Yeah. And I think it’s interesting that people wanted to hear a little bit more from us because, you know, we kind of designed it as this interview thing, but as we’ve been doing it for awhile now we realize like, well yeah, I guess we do have a lot to offer as well and people want to hear from us, so we’ll spring will sprinkle these types of episodes in here, especially around the new year here. Um, we’ll definitely get some in to talk about what we do around the new year and stuff as well. All right, so let me start with the first question. Kind of, so how do you go about deciding what to sell in terms of products and your business? Like, you know, when you, when you go to a trade show, how do you decide what to add? Not to add to what you’ve said, you know, all those different questions.

Kia: [02:25] This is a great question because I think, uh, you know, some of the things are obvious, you know, we sell, we sell portraits. And so the first thing that people used to ask about is how much are your eight by tens and now the next, the question that they ask are, how do I get the digital files or do you include them in your session? And so I think, uh, every year I want to do a couple of things. One, I want to create actual session experiences that are new and different and so sometimes that may include like go in some place specific or you know, making a really elaborate set for children’s session or you know, doing something like, you know, adding hair and makeup for families or for seniors. So I think it all for me starts with the experience and then I’m on the product side of it.

Kia: [03:16] Then there are so many different options that I like to be, you know, experiment with it. But I also like to do things, especially for my business that give my clients different things to put on their walls. And so, you know, obviously with digital’s you can offer like different, um, different treatments to the images. You know, you can do like a vintage look or hand color or that type of thing, which we have done in the past, uh, although I don’t think that’s really in vogue right now, but then for me, I’m always thinking like how can we create, you know, new and creative ways to present the images on the, on my client’s walls as art. And so that’s one of the main things that I look for, you know, is um, like frames that no one else has or you know, ways to frame the images that’s new and different from what I’m doing for my clients. And so one of the things that people are really liking is I’m like acrylic wall portraits, so not necessarily the metals but like, um, images with acrylic on them. And so they are more like clear glass and a little bit more contemporary. So that’s the direction we’re going as a lot of contemporary or super ordinate.

Matt: [04:29] That’s really good. I’ve seen it. I’ve seen a lot of those acrylics and we haven’t added them yet. Um, we saw them. One of the big trade shows maybe like two or three years ago and they were just coming in and I was like, well that’s something to keep an eye on, but I haven’t circled back to it so maybe that’s something that we’ll try this year as well. So.

Kia: [04:44] Well let me so well, so a couple more things. One of the things I like to do is like with specific sessions, if I do like a themed portrait session for children, a lot of times I try to create a product that goes along with it. So you know, I’ve done like a mud pies session and then Donna frame with it that had like hand prints in mud on the frame that then we lacquered yeah. So creating products that actually go with themes or you know, get people excited. So what, how, let me ask you matt, what do you decide to sell? Like how do you determine what products do you guys do?

Matt: [05:20] Yeah, so I mean we just don’t them very similar and I, I kind of think about it this way, like we kind of pick a focus for for a year maybe and we really dive into something and really test a bunch of things out. So I think we’re constantly testing and I don’t just test it for, you know, like a quarter, like we’re testing for a year. So two things that we’re testing right now that I kind of had two different outcomes. One of them is a standouts, which is basically just a wall art style where it’s printed on foam core and it’s like maybe an inch or two inches thick and then they finished the edge either in black or black and white or steel. Um, I think some of the companies have like a light wood and the dark web that they finished them but it’s just, you know, so like the picture sticks out from the wall, but the edges I’m finished and something that’s not a picture.

Matt: [06:09] And so we tested those and those really didn’t sell on our studio. We, we moved them around our studies, a couple of different places, but they just didn’t sell as well as like canvases and metals and image blocks and stuff like that. So that’s something that we’ve tested and they’re probably on the way out. This year they’ll probably would be taken off our walls because they just didn’t sell. I’m actually glad they didn’t sell because they’re one of the more expensive products to buy. And so the Qa, because we saw all of our walls are kind of at the same price. It doesn’t matter what finish you pick. There are all of our 60, my twenties are all the same price so that one had the least amount of margin in it so I’m kind of glad that one away is really way up on that one, so I’m kind of glad that one didn’t work out as well.

Matt: [06:52] But I’m the. One of the things that we tested that worked really well is image boxes and so we did a lot in the last year around that basically some kind of box that holds like 20 Matt matted prints and those sold really well. We brought in a ton of versions of them to see what sells and we’ve already removed a couple that, you know, just not to overwhelm our clients because they didn’t sell from the very beginning. Um, and then what we’ll do here around the new year is actually go in and look and see which ones actually sell, what samples we need to keep out because we want to keep it as simple as possible for our customers and also give them a variety at the same time. So we’ll clean that up and then that feels pretty good about that. That’s kind of wrapped up and then we can sell it for a couple of years until it kind of loses the energy and we have to revisit it.

Matt: [07:38] But we’ll pick focuses. Like we’ll pick it, we’ll, we’ll say, okay, this year let’s focus on Walmart and we’ll really dive into all the different options are we’ll say let’s dive into a gift ideas or gift prints or one thing we’ve done before. It’s like, what? What can we do for table tops? And so we’ll just dive into those. And really, I mean, once you get kind of get focused and clear about it, you can find a lot, a lot of options and then start pricing them out and figure out what’s going to be profitable, what’s not going to be profitable because there’s some stuff in the industry that if you mark up a certain way, they just become so expensive that the, that’s just their sticker shock on them. They don’t, they don’t have the value in the customer’s eyes that require, that is required to charge that much. And so some.

Kia: [08:22] Yeah. And that, that is one of the things that also helps me decide whether I’m going to do something or not, you know, is whether I can mark it up and make it worth the time to do it because there are some things that are on the next question. The next question, if you want to dive right into it. So like how do you price and how do you mark up your stuff? So typically what I do is, uh, I, I’m mark up things. So with photography it’s different. You know, my dad had a furniture store and so everything was marked up like double essentially and then if you you did a sale on it or that type of thing, then you made less than double. And so that was a typical markup. Whereas photography, it’s like 10 to 20 percent is what your costs should be because photography is not just a product, it’s a service and so a lot of the cost of the product is actually the time in creating it, you know, physically sitting are you sitting at the computer creating it the time you work with them. And so I look for things that I can do 10 to 20 percent markup, but then I also have my digital products which don’t have any cost of goods and so they will a lot of times offset things. So a lot of times I’ll package digital and physical products together where the physical product might have a higher cost of goods. But my digital does, you know, has very little cost of goods. It’s just more time. And then that gets me to my ideal, my ideal markup.

Matt: [09:50] How about so and so just to clarify, so when you say in like 10 or 20 percent, you’re saying like if you pay $10 for something, you want to charge $100 for it?

Kia: [09:58] Yes. Yeah. Because, and that’s just it. It sounds like an amazing markup and a lot of people when they start out don’t do that. And that’s why photographers I think have such a hard time staying in business when they first start out because they don’t realize that you have to charge so much for your time.

Matt: [10:16] Yeah. And so we do something similar like, so we just, this is kind of my baseline where to start and then we adjust it. I’ll explain that a second. But basically yeah, we, we take the cost of the product that it costs to actually order it from the lab and then like our time. Um, so we’ll budget like, okay this product is going to take, you know, x amount of time because it has five images in it. So it’s going to take that much time in editing and then you know, all the different time costs. And then we put a little bit of shipping in there just to save our, but if we have to ever ship it and then what we do is once all that’s bundled up, we kind of multiply it by four, which is like kind of a 25 percent markup or four times markup and that’s kind of my starting point and sometimes we don’t even stick with that number.

Matt: [10:56] But like when I’m shopping, I’m at a trade show or whatever. I’ll look, I’ll flip it over, look at the price and add some, you know, retouching time and stuff into it and say, okay, this is gonna. I could sell this for $200, I can sell this for a thousand dollars. And then it kind of says like, you know, and then I’ll take Alex and I both did that kind of separately and then we’ll take each other back to bruce and I. and I’ll pick up something and I’ll say, hey, can we sell this for a thousand dollars in her gut responsible? But yeah or no. And that kind of helps us narrow it down as well.

Kia: [11:25] Good way to do it because I think sometimes I’ll be like, there’s no way anyone’s ever going to buy this for this much, you know, just like you were talking about the standouts. We call them bamboos because we just put them only on bamboo and um, I, you know, when I first looked at them I was like, people are not going to spend that money on it and uh, but we have had a few people that did love them and did do it, but they were something that, that I would probably be like, you know, just, just looking at there, just don’t look as expensive as they need to be.

Matt: [11:58] Yeah. Because I remember one bamboos first came out to looking at him and thinking man, like, you know, this was me making up numbers, but like, you know, this canvas costs a dollar and those bamboo thing cost $7. Like it’s just like, that was just crazy that the market wasn’t going to work, you know. Um, but then, then one of the things that we do is we adjust it. Right? If something selling really well, we know we can raise the price a little bit and we don’t do that a lot, but like sometimes we under priced stuff often so like we’ll priceline at like at $400 and then we realize everybody’s buying it. It’s like well okay, that’s probably too cheap or we’ll play something at like $1,200 and we realized Oh, you know, it’s not selling so maybe it’s the price. And so if we still believe in the product, well we’ll drop it down to a thousand dollars and see if it sells and sometimes there’s just a little price thresholds that you can hit where things do sell, you know?

Kia: [12:45] Yeah. We also adjust ours based on how much time something takes. So for instance, an album a may not cost as much, but the time to create and put together the album is definitely cost prohibitive. So. So that’s something that I would charge more for just because it takes so much more time involved in it too.

Matt: [13:07] Yeah, that makes a lot of sense. Okay. So let’s move on to the next question because I think we’ve covered that pretty good. So now that we’ve made the money or the is made the money, like how do you know what to spend it on? Like how do you think about that?

Kia: [13:19] Well, I, it’s so funny because we doing that profit first book definitely makes a big difference, but I actually have a list that I keep and so for specific equipment for big events, things like that. And so I, once I know that I have a surplus, then I will, uh, spend it on those specific items and I definitely, you know, for me I like to, to invest in new computers, new cameras, uh, things that are going to make things go more smoothly and then definitely you know, samples that I can show in the studio. So those are the areas that I really like to invest in. And then education, I like to invest in that as well.

Matt: [14:03] Yeah. And I definitely think education is one of the top of our list. So we do the same thing. We make a list and then people are here. Here was the nuance I figured out a couple of years ago that I thought was really good for our business. So we say this thing around our studio and we say a broke list as a better list and when we mean broke, we don’t mean like broken lists. We mean like the list we made when we were broke, when we have no money is like the best list because when you have money and you start making a list, when you have extra cash on hand, like it’s amazing what gets thrown on there. It’s just I just like stuff we will never use, you know, we, we own the Lens Baby, a little lens and it’s one of those things that we bought that was not on the list that we bought when we had extra money and we’ve used it like three times, you know, so it, that would have never made the list if we would have made the list when, when we are in our slow season and had no money.

Matt: [14:53] So make start to make your, to do our year, to buy list when you don’t have money. So then when you do have money, you know exactly what you wanted because this is the different mental exercise.

Kia: [15:03] It’s like going to the grocery store after you’ve had lunch rather than when you’re starving. That’s exactly what it’s like.

Matt: [15:10] So what are some of the smart things that you think people should buy when they have extra money or things that they should invest at? You already said a couple but any others that you want,

Kia: [15:18] things that you know will make you money. So for me, if I like one of the things that I like to buy our props, so for me like backgrounds, chairs, things like that. And so if I know like each year I do a um, like a st nick’s set...