"My bookings are down, it must be because less people are getting married."
"I'm hardly getting any leads, it must be because people are spending less money on their wedding."
"My business is struggling right now, it must be because so many people are getting laid off."
There's no question that what's happening in the economy has an impact on our businesses. There's no escaping the fact that there are forces that bear on our industry, and the result is that it has become much more difficult to be a professional wedding photographer.
First, there's an influx on new photographers driving up supply. The combination of increased unemployment, affordable access to "prosumer" equipment, and few barriers to entry, has resulted in dramatic increases in the numbers of quasi-professional/hobby-ists.
Second, there's a very real erosion in the quality of demand. Though people continue to get married, the overall result of the economic condition is that the demographics have shifted. Couples are spending less overall on their wedding, and the result is - in many ways - a realignment of the market.
These two things have had a very significant impact on almost every segment of our market. Even clients who would normally be "price-insensitive," are much more so now - that there are different perceptions of spending large amounts of money on anything. For the average consumer, the impact has been enormous. Though consumer spending seems to be rising very slightly, spending on big ticket items (like weddings) remains mostly flat.
In 2008, when the financial industry began to collapse around itself, a company called Bear Stearns began to experience what can only be called a run on the bank. Confidence in the bank was shaken, and clients began to withdraw their capital - so much so that the bank was unable to meet it's obligations. A fire sale was arranged over the weekend and JP Morgan Chase bought the bank for about $1.7B.
6 Months later, Chase bought WaMu, when it essentially went into insolvency. Through the entire financial crisis, only one major bank posted profits every quarter: JP Morgan Chase. Make no mistake, they experienced losses - just like everyone else - in the mortgage, and mortgage-backed securities.
So what made the difference? JP Morgan Chase was prepared. They had a singular focus, on what they call their fortress balance sheet. They managed risk conservatively, focused on strong loan-loss reserves, and maintained industry high levels of Tier 1 Capital.
So what does all of that mean to you? A few years ago, our industry was experiencing a boom. It was relatively easy to get started in this business and make a living. People had money to spend, and they were spending it on their weddings. For people who didn't have money, credit was extremely easy to get.
The result was that most wedding photographers could easily experience the appearance of success. You didn't have to dot all the "i's" and cross all your "t's" just to survive. Many photographers actually survived - even thrived - on accident, in spite of themselves. Best business practices were easy to ignore because we were riding high on the wave.
Then the wave crashed. For the businesses that HAD done the hard work of building a strong base, things got rough. For those that HAD NOT done the hard work, things are almost unbearable. Business WILL fail - that's how market works. The good news is, your's doesn't have to.
Here's my suggestions for what you can do to fortify the foundation of your business, to not only come out the other side - but be better and stronger.
1. Get a firm grip on your expenses. If you haven't already - there has never been a better time to understand and manage what it really costs you to be in business. Spend some time with an accountant that can help you analyze the health of your business. Get on a plan that will help you prepare to weather the storms financially. There WILL be a next time - so use this chance to do thing differently. If you had saved 6-9 months of operating expenses, things would be very different for you today.
2. Invest in your client base. Cultivate your current clients, and make it VERY easy for them to evangelize for you. It's always cheaper to grow existing business than it is to find new business. Additionally, your existing business CAN be a valuable stream of new business. If there's ever been a time that it matters the way you treat people - this is it!
3. Evaluate Everything. Most of us have at least one - if not more - area of our business that could use some tightening up. Whether it's workflow, sales process, CRM, whatever - this is an opportune time for you to evaluate what's working and what's not.
When you consider that efficiency = money, it makes a lot of sense (no pun intended) to look at the things that could be working better and figure out how to make it happen. It also might be worth it to have someone else take a look with you. It's hard to be objective when we look at the things we created - even the messes we create. Ask a close friend to walk through some of your most important processes and ask them for their honest feedback.
4. Understand that your Market has moved. There has been a shift in the market, and the clients you once were targeting aren't in the same place they were a year ago. This means you need to follow your market (which may mean adjusting your price structure), or find a new market. The one thing that will guarantee you failure, is to pretend like nothing has changed - and act accordingly.
5. Use your free time wisely. Are you not booking as many jobs? Do you have less clients? Ok, let's work with that. It doesn't mean that it's the end. It just means you have time that you get to decide what to do with. Spend some of it on the things I talk about above. Spend a LOT of it focusing on getting better at your craft. Start a personal project. Do pro bono work for a charity group. You'll never regret spending time on your photography - it is, after all, the thing you do!
Finally, there's NO shame in having to get a part time - or even full time job. Your first obligation is to yourself and your family. The bank doesn't care about how hard it is for you to get clients - you still have to pay your mortgage. Take some time to take stock of where you're at, and develop a plan that works for you.
As I said before, some business won't make it. Some businesses will be Bear Stearns, or Lehman Brothers. Wouldn't you rather do whatever you could to be a JP Morgan Chase instead?