I know I’m going to sound geeky saying this, but I really enjoy sitting down with my accountant and going over our taxes each year. I consider it my business’ yearly performance review! It’s the way I evaluate where I’m at in terms of my goals and find ways to do better the following year. Last year I decided to finally get an accounting software to make life a little easier come tax time and to get an in-depth view of my business finances.
It was a bit of a shocker at first because up to that point I wasn’t thinking about my business in dollars and cents- I was just happy to book clients! People wanted my pictures and that in and of itself was exciting and rewarding. But more clients doesn’t necessarily equate to a profitable business. A lot of photographers get themselves in debt buying gear, equipment and software without ever thinking about their bottom line. When your business is also your passion, it’s so easy to blur the lines of what’s a business need and a want. That was the hardest part of taking the step towards getting an accounting software. I knew that once I started documenting and categorizing my inflows and outflows, the truth would be known – is my business profitable or am I using the business to justify my photography-related purchases?
The good news: it was profitable… but barely! Once I started documenting and itemizing my expenses meticulously, I was able to gather data to make more informed decisions about how to run my business more efficiently and profitably. Like making the switch from discs to USBs, which was not only a more practical way to deliver my images, but made the most financial sense since I could buy the drives in bulk lowering the cost. I also began investing a little more in new branding/marketing materials that would appeal specifically to my target clientele. I became more critical when making business purchases (working on a post with some of those good and bad purchase decisions soon!) and started asking myself the tough question of whether this was a “want” or a true need for the betterment of the business. Most importantly, it helped me value the time and services I provided as a photographer and gave me the confidence to adjust my pricing accordingly. That decision is never an easy one, but it was necessary in order to continue providing the best client experience for all my customers. I’ve enjoyed watching my business grow and evolve each and every year into something I’m truly proud of. Hope you found my story helpful. More business and photography-related advice posts coming soon!
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Sandy - I love how you’ve shared your experience and give great tips to your audience! Keep it girl!
Sandy - Keep it up girl! Xoxo
Maddy {Mad Hearts Photography} - Thanks for the feedback, Sandy!
Tiffany B. - I go through this every year with my small biz as well. I started using QuickBooks 2-3 years ago and would be lost without it now. It helped me understand what I was spending money on and if I was “really” making any money. Keep up the good work, I love reading about how other people are doing with their business.
Maddy {Mad Hearts Photography} - Thanks for following along, Tiffany! And I like how you put “really” in parenthesis because that’s exactly why I decided to breakdown and get serious about my bookeeping. It’s easy to get excited about incoming funds and completely gloss over all the outflows. I should’ve done a better job earlier in my business, but better late than never!