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About this Entry Saturday, January 26, 2008

Posted by: garyfong1
AN ESSAY ABOUT RECESSION-PROOFING YOUR BUSINESS
(more added today)

I've been in business through two recessions. Business proceeded in

a healthy way and my numbers continued to grow. I had to do some
adaptation and what really saved me was getting prepared before the
pullback arrived. Here's what I did:

1) Photography-related services - relationships are

recession-proof. In fact, in hard times the referral base became even
Original: 1/26/2008 10:39 more loyal and devoted. Rocky Gunn gave me the simplest, best
AM advice I have ever gotten in a single sentence... "nobody needs
Comments: 26 another salesman knocking on their door, but everybody could use a
eProps: 34
good friend". In rough economic times, good friends are even more
Read Comments valuable. My transcriptionist is really good. And I just wrote her an
Post a Comment email and it said, "you're so good, I'm going to use you FOREVER!"
Back to Your Xanga Site Customer supersatisfaction is recession-proof.

Minis Family is even more valuable. It is SO easy for a photographer to

make a huge increase in revenue by simply adding new revenue
garyfong1 streams to an existing business. Here's a great example:

I have a friend who is an amazingly successful

Who gave the photographer here in Los Angeles. His name is Joey
eProps? Ikemoto. His business does close to a million a year.
2 eProps from: He has an unbelievably loyal clientele among the
japanese-american community. He has been in
jonesphotog business for probably 25 years and went through the
ronstorer same recessions I did.
SpiCeySpaGetti
LuLuLuChia One day I was visiting him at his former little studio in a strip mall,
bluesky93 about 23 years ago. He had a huge staff of photographers, and he
DRDuggan was doing something like 200 weddings a year with a healthy average.
NUYOKA_AND_CO He shot many of these himself, and his business was all referral. While
azellmer all this was going on, he actually had a full-time job as an x-ray lab
robinone technician at the local hospital! He was making something like $30,000
hottotrotalot a year working this job, while his business was grossing in the many
fjblau hundreds of thousands. I asked him why he had the job, and he said,
nikonis "security". So I got out a calculator and said - OK, let's just assume
ambiancestudios you sell one additional parent album to each of your weddings. Say
shotshot you had a $195 special for parent albums, and include some of the
georgelien unused proofs in your orders. There's $40 grand right there.
sapatorra

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marcweisberg It was wild, but that suggestion really registered with him. He quit his
job, focused his energy full time on his studio instead and expanded it
greatly with intensely higher profits. He now has one of the largest,
and most beautiful studios in California.

If I were a photographer today, I would simply add new

relationship-sensitive low-initial-cost portrait sessions to my offerings.
If you have a loyal clientele anyway, who love you as a person as well
as a photographer, then it is a super easy thing to collect them in front
of your camera again. Missy brings her Canon with the L lenses to
horse shows, and a lot of people come up to her asking to see the
images online, which result in sales, completely out of nowhere.

I remember when I did

children's portraiture. I
did it differently, we would
just go to a park with the
mom, and I would make it
a point to not shoot right
away, and just talk to the
mom. Ignoring the child at
a playground is a
guarantee that this kid is
going to be a performer.
The more I acted
disinterested, the more
they would go, "Hey
Mom! Look at me go
down this slide!" Then
they would try harder and harder to show me how awesome they
were. This is when I would start shooting, and I would get the most
awesome photos of the kids.

While at the playground, I'd show the LCD of the image to the kids,
who would go wow, and the mom would go wow, and the next thing
that would happen is another parent would come up to me at the
playground and ask for my card. I would give them my website
address, and a link to today's session on Pictage. This would turn into
another session - so long as the shoot fee was low. Then I would let
the prints sell themselves.

In a recessionary economy - remember that people become very

negative and careful with their wallets. So having a large up-front fee is
most likely going to result in an empty calendar. I would much rather
shoot on spec than with a large upfront fee. While that may work with
the ultra high-end customer with a lot of discretionary dough, it's still
risky. I remember that I used to do engagement sessions for $15.
That's right, fifteen bucks. And I always sold nearly $300, and it took
me not even half an hour to do. Same with weddings. Having a low
up-front fee and selling a large volume of images once I 'owned' the
right to sell them exclusively was my ticket to prosperity. Later, I would
do high-end stuff, but that took years to earn that clientele. I had it
great from the very beginning by starting with a low fee, predesigning

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albums, and selling reorders. My calendar was completely full, and my

average sale was multiple what other studios were getting.

Another thing I want to add, I

never paid to advertise my studio.
I never did ads or bridal shows.
Those are so expensive and what
they do is bring you a skeptical
prospective customer. They're
skeptical because they found you
through advertising. So not only
are you spending money on
attracting the wrong kind of client (the client you REALLY want is the
one who heard that you are the best friend they never had, with a
camera and a smile!) Who would you rather meet with? The awesome
person who shot your best man's wedding, or someone who you saw
in an ad in a magazine? Exactly!

When things got hard for me, I put extra effort into improving customer
satisfaction. If every client who uses you drags two people by the ear
into your business and insist that their friend use you, your business
will grow regardless of the economy. Think about it - we all know a
business or service that we swear by- tell all of our friends about,
right? BE THAT BUSINESS! And you will have a clientele that will
remain solidly, stable and growing.

I know how to play a recession, even a deep one. The first thing I did
in my products business was start to develop lower-cost products like
the $19 Puffer or $29 Origami. Sales were up 194% YOY for GFI
because of this. I knew that there would be a risk with higher-end pro
lighting attachments like the Whaletail or Lightsphere, so I started
preparing to market smaller trinkets.

I would do the same with photography. I'm not saying lower your
prices in response to a recession, I'm saying buffer up the consumer
fanaticism (loyalty) by endearing yourself to your clients. Foster that
referral, and then have products which have a low-cost entry point.
Once you produce beautiful images, sell the images and not the
session. Increase the volume, diversify your offerings into more types
of portraiture, and you will be fine. In fact, overall I would say you could
prosper in hard times.

With all sincerity,

Gary
Posted 1/26/2008 10:39 AM - email it

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Hey Gary,

I think a lot of readers of your blog have been waiting to hear

this. Thanks for taking the time to write this, and all the
experience you share pro bono
Posted 1/25/2008 9:20 PM by golfducky2 - reply

Thanks. I'm taking questions...

Posted 1/25/2008 9:21 PM by garyfong1 - reply

i think you hit the nail on the head, "relationships are

recession-proof" it's going to be tattooed backwards on my
forehead for the next 10 years... I dont know what my brides
would think though
Posted 1/25/2008 9:42 PM by golfducky2 - reply

I find your advice very interesting. It has come to a point as

a studio owner where things just absolutely have to change.
I came into this business as a photographer first, a business
man second and now that role is switching this year. I
appreciate the advice, not only about the economy, housing
and gold, but this last bit about boosting your studio. I think
your key to future profits is as you say, through satisfied
customers who love to brag. Thanks again Gary.
Posted 1/25/2008 10:17 PM by jonesphotog - reply

excellent!
Posted 1/25/2008 11:21 PM by ronstorer - reply

this is probably my favorite post. thanks gary.

question, you said, to have lower prices as an incentive but

does that make you look desperate?
Posted 1/26/2008 12:22 AM by SpiCeySpaGetti - reply

It does not make you look desperate if you ADD a new style
of session. For example, let's say that you offer, as a
goodwill gesture, to your clients a FREE "thank you" session
for, say, valentine's day. Free is pretty low price-wise! But it
also fortifies the relationship loyalty by thanking your
customers for using you in the past.

So this doesn't make you look desperate. Make it an

appreciation offer. Of course, they have to purchase
whatever prints they select, but that's a given.
Posted 1/26/2008 12:26 AM by garyfong1 - reply

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Your turn!
Posted 1/26/2008 12:27 AM by garyfong1 - reply

great post! it's so strange how the universe works because i

just started reading your blog - like 2 days ago. and as of
last year i've been aware of this up-coming recession. since
than i have been desperately seeking an answer to help me
stay recession proof, especially since i own my own
business. on top of that, i'm getting married next year. i have
a few questions i wanted to ask, hopefully you can give me a
clearer vision.

1) i'm in the creative field myself, a graphic designer and an

event designer. i started my business 3 years ago. still in it's
infant stage but lately we have been getting a lot of clients.
nevertheless, like joey, i am still working full time. when do
you think is the appropriate time to start taking it full time?
wait until the recession is over, so i can be secured? or
when my design business gets really demanding? how did
joey balance his life working 2 full time jobs?

2) talking about price point - can you give me some wise

words to help me feel comfortable if i do plan to lower my
price, especially when i keep hearing "if your price is too low
no one will take you seriously as a designer or they will take
advantage of your services."

3) my fiance and i have been getting worried about having to

spend so much for our upcoming wedding. we're
approaching a recession and we want to secure our
financial future since we are starting our lives together. we
want save our money and invest in precious metals, such
as gold. any advice for a bride who's planning a wedding
around a recession? we're trying to keep it under 15,000. is
that even possible?

4) last one i promise. i'm artistic, so photographers who

have a good eye and beautiful photographs are so important
to me, but they are out of my price point. since you just got
married yourself (congratulations by the way. you had a
beautiful wedding) do you have advice on saving on
photography? do you have any friends you recommend?

thank you so much. looking forward to hearing your

response. did i tell you, i love your blog!
Posted 1/26/2008 1:38 AM by LuLuLuChia - reply

Optimism ROCKS!!
Posted 1/26/2008 6:07 AM by bluesky93 - reply

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Excellent. Need more posts like this...and less gloom and

doom...This is wonderful. Thanks Gary.
Posted 1/26/2008 7:39 AM by DRDuggan - reply

I LOVE YOU!

:)
Posted 1/26/2008 7:56 AM by NUYOKA_AND_CO - reply

I agree wholeheartedly with what you just wrote. When I

saw you speak several years ago, you talked about exactly
this and I have implemented and have been prospering and
growing bigger every year. THanks Gary!!!
Posted 1/26/2008 9:06 AM by azellmer - reply

Luchia - great questions and thank you everybody for the

great forum discussion.

This is a great time to work SUPER SUPER hard and be as

secure as possible. So with regards to your new business, if
it were me, I would work full time at both. Think about how
super lucky you are - to have not only a job, and somebody
you love, but the passion to start a new business. I would do
both if I were in your shoes, and take the extra money and
buy little gold pieces as a reward.

With regards to the photography - wow that is a hard one. I

really really really love seeing my great wedding photos and
most importantly the video. When it comes to the wedding I
think it would be a great idea to weigh in on what is most
important and cut back in other ways. My biggest expense
was the band, but I wouldn't have had it any other way.
There are a LOT of really great new photographers with a
great eye. The thing I have always asked is - can I see ONE
wedding, all of the unedited shots? That way you can see
how many blurry, underexposed or overexposed images.
Not only the greatest hits. The reason I want to see them all
is because if there is a high number of blown images- there's
a higher chance that they could blow a big moment.
Posted 1/26/2008 10:02 AM by garyfong1 - reply

good post.
Posted 1/26/2008 10:07 AM by robinone - reply

"Worst Financial Crisis Since WWII"

Jeremy Grantham, chairman of global investment

management firm Grantham, Mayo, Van Otterloo & Co. and
overseer of $157 billion, had a stark warning for Bloomberg

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readers Wednesday (much obliged, Financial Armageddon).

He warned, “This is the most important U.S. financial crisis
since World War II.” The crisis stems from a global credit
crunch brought on by the U.S. housing slowdown and
ensuing subprime debacle. As a result, Grantham said that
the U.S. economy is likely to enter a recession. He added
that present conditions are worse than the savings and loan
crisis of the eighties, which cost U.S. taxpayers more than
$160 billion. The money manager explained: The S&L crisis
was parochial in comparison. This is the first one that is
global; it has tentacles everywhere. Furthermore,
Grantham said credit problems are likely to spread beyond
subprime mortgages to commercial real-estate loans and
debt used to finance private equity transactions. As quoted
by Bloomberg: Private-equity deals will be in trouble. They
were under-researched and overleveraged, and we had
reached a level where the junkiest possible companies were
selling at high prices. Grantham wrote in his latest quarterly
letter to investors that private equity “is the most
underappreciated risk of all and is likely to be the center of
another phase in the crisis.” Because of the crisis, the head
of the Boston-based firm told Bloomberg readers to shun
stocks and switch to cash. From his Boston office,
Grantham warned: Don’t be a hero. Move to cash and let the
other guys fish around for the bargains in the wreckage.
The 69-year-old money manager said he expects stocks to
reach a bottom in 2010. Grantham correctly predicted the
crash in technology stocks two months before the bubble
burst in March 2000. Back on June 13, 2007, I talked about
the legendary value investor, who wrote to shareholders
back then that we are now witnessing the first global bubble
in history, covering all asset classes. He said: From Indian
antiquities to modern Chinese art; from land in Panama to
Mayfair; from forestry, infrastructure and the junkiest bonds
to mundane blue chips; it’s bubble time! The value investor
added: Everyone, everywhere is reinforcing one another.
Wherever you travel you will hear it confirmed that “they
don’t make any more land,” and that “with these growth
rates and low interest rates, equity markets must keep
rising,” and “private equity will continue to drive the
markets.”
Posted 1/26/2008 10:14 AM by hottotrotalot - reply

The best advice I ever got about consulting (and it applies

here as well) is that no one hires the product, they hire the
person. If your clients truly LOVE you, they will continue to
use you over and over again.

Make it personal, be real, and listen to them. There is no

competition when you deliver that.
Posted 1/26/2008 10:19 AM by fjblau - reply

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Would you put prices on line? If so-How would you approach

this in today's market? How would you work in your
Pre-Design plan with todays's bride? Thanks so much!!
Posted 1/26/2008 10:46 AM by nikonis - reply

Thanks Gary, This is a great post!! Keep it coming. We're

looking forward to seeing you and Missy again in Vegas; as
well as all our other xanga friends. : )
Posted 1/26/2008 10:53 AM by ambiancestudios - reply

awesome. homerun, man.

Posted 1/26/2008 9:59 PM by shotshot - reply

Just as I promised to send my brother more information on

you after using your Origami diffuser, I discovered your
latest blog posting...
And it rocks!

You are truly an angel, Gary.

I'm always grateful of your willingness to share your

knowledge and experience.

I hope some day I too will have the same opportunity to do

the good that you are doing.

Keep up the good work, man.

I cannot wait until I return to Taiwan to try out your latest

diffusers.

Sincerely,

George Lien
georgelien@email.com

PS: I'm sad to see so many copy-cats ripping off your

Lightsphere.
Posted 1/26/2008 11:54 PM by georgelien - reply

We are completely on the rip-off artists. I will make an

announcement when we have something to report but rest
assured we are on it.
Posted 1/26/2008 11:55 PM by garyfong1 - reply

The timing of this essay is amazing in light of Friday's

industry stink related to the WiseBread.com blog post "are
you stealing from your photographer?" In the original blog
post (now deleted) the author indicated that after a certain
amount of money to the photographer was paid in prints, she
had resorted to home scanning and printing of the

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photographer-delivered print. Relatives got a copy of

'slightly' less quality.

Does a back-end business model as you're suggesting

invite the home scanners/printers? If financial conditions got
so bad, wouldn't regular folk just take advantage of the tools
they have. Does your model work in a post-Napster world?
Posted 1/27/2008 8:25 AM by tomKphoto - reply

absolutely it works. Those of you who have been on the tour

will remember how much I pounded in the following
sentence:

"do not give the couple ANYTHING tangible until they are
delivered the final albums"

That was the most MOST important part. Copying is not new
- we had it back when there were proofs and copy negs.
Posted 1/27/2008 8:29 AM by garyfong1 - reply

thanks for the suggestions, gary! i've actually met joey

ikemoto, how funny, small crazy world..i'll send him the link!
Posted 1/27/2008 8:36 PM by sapatorra - reply

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