To be honest, whether you’re launching a new business or reinvesting in an existing one, the only way to “properly finance your money” is to make wise investments.
No matter what you’re spending your money on – a new workspace, new gear or a new marketing campaign – a wise investment is one that pays for itself, and then some. Some will pay for themselves quickly. Others may take years. But you can’t afford too many investments that never pan out, so how do you figure out when to spend and when to keep that cash in hand?
Research, analysis, a dose of intuition and honest respect for cold, hard cash are the best tools you’ve got.
Get specific. What will this investment really cost you, not just in money but in time? How many buyers are there for the products or services you’re offering? How much do they spend annually on these kinds of activities? Who else is targeting this market, and what do they offer? How do your offerings compare to theirs?
Use surveys, informational interviews and one-on-one conversations with peers, prospects and existing clients. Read books, magazines and blogs. Join listservs and other online communities. Information is power, and your job here is to gather enough information to feel reasonably confident that your investment will ultimately generate greater revenues than expenses.
The information you gather should help you figure out the real impact this investment will have on your business. How much income will it generate that you wouldn’t earn without it? How many jobs can you reasonably expect to win because of it? How much more will you be able to charge?
Those answers will help you make an educated guess as to how long it will take to earn back your investment and start making a profit. You’ll also want to consider what’s likely to happen if you don’t make this investment and what you can afford to lose.
Sometimes a risk that seems insane to outsiders actually makes an enormous amount of sense when it’s you in the hot seat. Do the research. Perform the analyses. These tools are essential. They will inform you and influence your intuition. At the end of the day, if you just know this is the right decision at the right time, there’s a very good likelihood you’re onto something.
Leave the vanity investments to the independently wealthy. Remember, a huge space, fancy camera, state-of-the-art computer system and other expensive gear doesn’t make you a great photographer.
If you’re creating compelling images that engage your audience and communicate key messages with nothing more than a $30 Holga and expired film, you’re a “real” photographer. So keep your cash – and keep an eye out for those wiser investments that will truly move your business where you want it to go.
About Judy Herrmann
Judy Herrmann of Herrmann + Starke, www.HSstudio.com, creates distinctive imagery for advertising, editorial and corporate clients. Her work has won recognition from Graphis, Communication Arts, Lurzer’s Archive and numerous award annuals. A past ASMP National president and recipient of the United Nations’ IPC Leadership Award, she was recently named one of Rangefinder Magazine’s “11 Photographers You Should Know.” Her energetic and inspiring seminars on digital photography and smart business practices have helped thousands of creatives compete more effectively. Through one-on-one consultations and her blog, www.2goodthings.com, she helps people grow creatively satisfying and financially rewarding businesses. Herrmann + Starke
Headshot Photograph © Mike Starke
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