Modern business exists for one primary purpose: to maximize profit. In this article, I’ll explain why, for the past six years, I’ve run my business in the opposite spirit, often knowingly leaving money on the table.
A few weeks ago, I wrote an article on licensing. In it, I explained that I used a pricing strategy that would encourage more work rather than trying to extract the very maximum from the job. I said that I would rather make $100,000 per year doing 40 jobs than the same amount doing 10 jobs. This is because I love the work. As I expected, some commenters could not accept this, as it is the antithesis of what a business school would teach.
In the 90s (and sometimes in 2019), the mullet was a popular hairstyle. It was neat and smart from the front and left long and wild on the back. I like to think of my business model as the mullet approach: a professional, clean cut image from the outside, but free and easy going once you’re working with me.
During my last job, I worked with models, assistants, and a retoucher. As the photographer, it fell on me to subcontract these support roles. In other words, I hired the talent and then billed my client for them.
When putting together an estimate, I pushed to get an amount for the talent that I felt would be fair return for their work. On completion of the job, I paid the talent exactly what I had quoted for them without adding a markup. Everyone who heard about this was shocked. It seems like it is standard practice for photographers to charge more than what they pay their talent.
Just to be clear, I believe that a laborer is worth their wages, and sourcing this talent is labor. Instead of paying the talent less than I had quoted for, I covered my “labor” in a fee that I listed as production and made this clear to my client. This amount was significantly less than if I had skimmed from the talent fee, but it was fair remuneration for my effort.
Many a business mind has said to me: why don’t you get a quote from your talent and then just inflate that amount by 25 percent for yourself? For the way that I run my business, if I could get extra for the talent, then I believe the talent deserves it. Isn’t it ironic that we are told to raise our fees as high as possible for our clients, and then, those same people advise us to pay our suppliers as little as possible?
For my business, maximizing profit is not the primary objective. My objective is to create an economy around what I love doing in a way that leaves everyone involved feeling happy and fairly rewarded, including the client.
Now that I’ve run the business for six years, I’m wondering if concentrating on this objective has actually led to long-term sustainability and a higher total income. I’m sure that in my first year, I could have made a lot more money by being more cutthroat, charging clients more, and paying talent less. Now, in year six, when most of my income comes from repeat business from happy clients and successful collaborations with talent, I believe my income would be significantly down had I been pushing to maximize profit.
Here are some practices I’ve put into my business that decrease short-term gain but help towards long-term profitability:
- I use a royalty fee licensing model. This is specifically for the convenience of the client. I make it easy for them to use the images.
- I pay my suppliers as much as I can get for them.
- When an “act of God” derails a shoot, I take the hit and re-shoot under better conditions.
- If I don’t quite deliver what I quoted for, I adjust my invoice to reflect this. For example, if I estimate for a full-day shoot and it only takes a half a day, I bill for half a day.
- I treat clients like people, not money bags. This means I occasionally take them out for drinks, I buy them Christmas gifts, and I express my gratitude.
All I ever read on online photography forums suggest that the client is the enemy: they’re constantly trying to squeeze the poor photographer for as much as possible while paying as little as possible. My experience has not been this at all. Many of my clients are now good friends. My clients work with me to help make both of our businesses as successful as possible. Sure, I’ve had a few bad clients, but they are the exception rather than the rule.
Since I’ve been offering professional photography, I’ve devoured every tutorial on photography business I could get my hands on. Almost without fail, they offer some version of the following advice: charge more, minimize expenses, invoice immediately, make the client take the risk (e.g. contingency plans for weather), and maximize profit.
These are all good disciplines to get into, but hopefully from this article, I’ve offered an alternative to striving for profit. The mullet approach: an approach that presents a human side to running a business. One that may even lead to better long-term success.