What are the advantages of knowing if your studio is bringing in the desired income?

1. Great satisfaction in knowing you can reach your goals.

2. An increase in creativity due to a decrease in stress level.

3. You will really be working at photography, your real passion.

4. You will feel that your work is valued.

5. You will enjoy an enhanced lifestyle.

6. And so much more…

In order, to obtain a precise picture of your actual and potential profitability, do you:

• Know your actual break-even point?
• When you compare your actual profits with the industry numbers, are you among the best?
• What would the impact be of a loss or gain of 10% on your expenses?
• Do you have the means of predicting or at least estimating the results from one year to the next?
• Do you know how much you need to make to be able to increase your salary?
• If an employee asks for a raise, what is the impact on your profitability?

All these questions may annoy you but they are essential in the proper functioning of your business.

Do you leave everything to your accountant? Even worse, you do the accounting yourself to save money? Consequently nothing is up to date?

As strange as this may seem, lack of control has a direct effect on your well being and your level of stress. Decide now to take action to insure a flourishing future.

Like you, at the beginning of my business adventure, I asked myself countless questions on the subject.  I eventually and soooo gratefully met valuable experts who taught me how to acquire that necessary and priceless control over my business.

They taught me how to read a Balance Sheet and Profit and Loss Statement. This was so much easier than I expected and at last I was able to compare my results month by month and verify how I was doing with my objectives.  I analyzed each expense and compared it with industry standards.  As the size of my studio grew, that knowledge became more and more powerful not to mention essential.

My sales figure was compared to fixed and variable expenses to be able to arrive at a percentage for reference. I was able to calculate my gross margin easily and then estimate the change from year to year. Afterward, my different expenses were minutely scrutinized to be able to detect any significant differences that would give me an alert that I needed to change something.

Every month, I would carefully analyze my Balance Sheet and Profit and Loss Statement. My first glance was to check on one of the most important elements of running a large studio, salaries. After learning about how to read a report and analyze it, I was able to keep salaries between 32% and 38% of sales, which resulted in a very interesting profit margin. Please remember that other expenses are also important (rent, publicity, subcontracting, variable expenses, etc) and should be under vigilant control.

I can only insist on the great benefits that I obtained in being able to read my reports and though I have no previous knowledge of basic accounting.  I learned it and so can you. I grew my studio to a hand-to-mouth 2 person operation to a million dollar in sales 23 person studio: one of the largest in Canada. If I learned how to do that, you certainly can too. Great results are just around the corner.

If you would like an interactive tool to calculate quickly the global profitability of your studio, click on the link below.

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