Instructor: Natalie Fobes        Credits: Three (3)

Office Hours: By appointment after class on Fridays. Email me at Natalie@fobesphoto.com or call me at 206.937.9375 to schedule the appointment.

Text/Supplies: Selling 101, Zig Ziglar. ASMP Best Business Practices, 7^th Edition. Assignments are to be turned in as both digital files and hard copies. BLOG: Assignments, lecture notes and other resource material will be posted at www.fobesphoto.com/blog

Time/Location: Friday at 9 a.m. Lab after lecture

Course Objective: To develop an understanding of real-life photography business practices. By the end of the quarter you will have learned marketing and promotion basics, written a marketing plan and developed potential client lists and a promo piece. You will have learned about taxes, insurance and retirement planning.

Classroom standards

• My expectations will be based on real world business behavior, services and products

• Don’t schedule shoots or appointments until after class.

•Do not surf the web in class. You’ll get a warning the first time. The second, you will leave.

• As stated in the student contract, late assignments are not accepted and are graded as zero unless you have extreme circumstances.

• Absences not emailed or called in before class starts are unexcused. It is your responsibility to check the blog for lecture notes and assignments or to call me for information.

• Poor grammar and misspelling in assignments will be considered. Choose a partner to help you edit your assignments.

• I suggest you “Dress for Success” when guest speakers visit

• I suggest you take notes in class and don’t rely on handouts

• Check the blog regularly.

• No active cell phones except for designated security person

• I expect active involvement and participation and it will be part of your grade

• I expect respect for every person in class. Please pay attention to others who are talking.

• No side conversations please. If you have something to say please say it for all to hear

• Any questions or concerns please make an appointment to meet with me.

• Please review the Student Code of Conduct

To get the most out of this course you must be:

• willing to work hard with a professional attitude
• aware that each assignment is a potential portfolio piece
• motivated to learn more than required for class
• willing to take the responsibility to research on your own

ADA Accommodation: If you need course accommodations based on a documented disability, have any emergency medical information I should know about, or need special arrangements in case of building evacuation, please let me know at the beginning of the quarter or as soon as possible.

Schedule: While this schedule reflects my plans for the quarter, I reserve the right to adapt the curriculum as needed.  I will let you know if and when any changes occur.

Materials students need to purchase:  Zig Ziglar’s “Selling 101” State and local business licenses; copyright registration; membership in professional organization

Grading:

Email Blast    10%

Marketing Plan 30%

Marketing Materials: 30%

Professional Packet of required items 20%

Other including professionalism, participation, photographer ads, quizzes: 10%

Assignments to be turned in as both hard copies and digital copies unless otherwise noted.

Jan. 7, 2011  Week 1

Introduction of marketing, the three basic components

Defining your message

Determining your audience and finding your leads

Developing your marketing strategy

VMS exercise on 297. Please write your VMS and turn it in Jan. 14th. Will be reviewed in class.

Assigned Reading: Selling 101

Jan. 14, 2011  Week 2 Selling, marketing and promotion

Review Marketing Plan Assignment

Discussion of multi-prong approach:

Direct mail and email blasts

Networking

Press releases

Finding the prospects review

Discuss how to research for prospective clients

Assignment: Create marketing piece for email blast due January 28^th

Jan. 21, 2011  Week 3: Selling

Test on Selling 101

Discuss book

Define selling, and no, it is not a four-letter word. Everything you do is selling you, your service or your product

Use of scripts to overcome objections

Break into groups to come up with scripts to handle typical objections

Assigned Reading: ASMP: Chapter 43 7 Steps to an Effective Marketing Plan

Recommended Reading: 44-47

Marketing Plan Assignment: Look at the differences in Section 3: I want more analysis.

Due Feb. 11th.

Professional Packet Assignment: proof of copyright registration, membership in professional organization, state and local business licenses, digital stationery with invoice, estimate and terms.  Due any time during the quarter but at the latest March 11^th.

Jan. 28, 2011  Week 4: Tax Talk with Howard Choder

What you need to know about taxes and where to go to find out more

Email Blast review

Feb. 4, 2011  Week 5: Panel: What have you been doing since graduation?

Recent grads discuss their business, marketing, promotion and network actions

What has worked and what hasn’t

Advice for the next two quarters

Assigned reading: ASMP Chapter 35 Your Professional Team

Suggested reading: ASMP 36-39

Feb. 11, 2011  Week 6: Designing Marketing Pieces with Jennifer Kennard

Marketing material design and fabrication

Feb. 18, 2011  Week 7 Promotions that work with Christopher Conrad

Examples from prior years

Marketing plan due.

Quiz on Chapter 35

Assignment: Marketing Material due March 11, 2011.

Feb. 25, 2011  Week 8: Retirement Planning

Assigned reading:  ASMP Chapters 50-52 negotiation

March 4, 2011  Week 9 Negotiation, Insurance and Review

Negotiation basics

Insurance primer

Toolkit: Skills you need on day one of your business

Review of invoice/estimates

March 11, 2011 Week 10 Job Interview Bootcamp

Kristen Davy talks about job interview strategies.

Marketing Material Presentation

March 18, 2011  Week 10  Panel: Where Are the Jobs?

Industry leaders talk about jobs

Professional Packet due if it hasn’t already been turned in

Grading Standard:

The following grading standard is from Seattle Central. The final grade will be based on assignments (90%) and class participation (10%).

A	3.9 – 4.0	Excellent
A-	3.5 – 3.8
B+	3.2 – 3.4
B	2.9 – 3.1	High
B-	2.5 – 2.8
C+	2.2 – 2.4
C	1.9 – 2.2	Average
C-	1.5 – 1.8
D+	1.2 – 1.4
D	0.9 – 1.1	Minimum
D-	0.7 – 0.8
E	0.0 – 0.6	No Pass

Grading criteria:

1.Each assignment will be graded on how well you follow the instructions and whether you complete the task.

2. Written assignments will be marked down for poor grammar and spelling errors.

3. The marketing plan and materials grades will be evaluated using real business considerations.

4. The assignments are based on real business situations you will need to know in the future.

5. If you do not understand an assignment or need more help please schedule a meeting with me asap.

6. Assignments are to be turned in both digital and hard copy formats.

Assignment weight

Email Blast 10%

Marketing Plan Assignment 30% of grade

Marketing Materials Assignment 30% of grade

Professional Packet Assignment 20% of grade

Other: including professionalism, participation, photographer ads, quizzes, 10% of grade

Other Resources:

Business software like Photobyte, FotoQuote or Hindsight Inview

Banking software like Quicken, MYOB, MoneyDance or Mint

“The Photographer’s Guide to Marketing and Self-promotion” by Maria Piscopo

“The Little Red Book of Selling,” by Jeffrey Gitomer

“Best Business Practices for Photographers” by John Harrington

Be sure to customize your LR gallery for the upcoming assignment. Here’s a link to what I went over in class.

You’ve got the signed estimate and 50% of the estimated cost. Your scope of work included the licensing you and your client negotiated. You’ve determined your fee for the shoot and the usage by either including line items for both, or factoring in the usage to your creative fee. All the negotiations have been done. You just need to invoice the client for the real production costs and your fees.

Your invoice should look almost identical to the estimate. You’ve got your contact info, your creative fees, your scope of work/usage license, your real production expenses and your terms and conditions.

The main differences between an invoice and an estimate are 1. you plug in your real production costs and 2. you modify your scope of work/usage license into a license that clearly reflects the usage agreement you negotiated for the estimate.

Licensing is the heart of an Invoice. You’ve got to be absolutely clear on what rights you are granting to the client. It has got to match what you listed on the Estimate. This is not the time to surprise anyone.

Write the license in bullet form to prevent any misunderstanding about what rights you’ve granted to the client.

The first one should be the media in which the photograph will appear. If it is a magazine, list the name, month and title if known. If it is for a website, list either the url or some other specific identifier.

Where will the photo be used? Inside or on the cover? How big?

Duration, Size of edition or print run, Language, Geographic area all should be covered.

Remember, this is a contract. You want to avoid any misunderstanding on the part of your client. Most people don’t exceed the usage license intentionally. They do it by accident. But if you ever do have to go to court you want the license language to be absolutely clear.

Let’s talk a bit about the difference and similarities between assignment photography, which you’ve been working on, and stock.

Assignment photography is custom photography created for the client. Stock is existing photography licensed to the client.

Stock photography fees are based solely on the usage. The bigger the usage, the more the fee.

Other factors to consider when quoting a price include how much you had to spend to get the photo, whether it was shot under difficult conditions, whether special expertise was needed and whether the photo is readily available or rare.
I charge more for underwater and aerial photography.

Remember the book client I’ve been negotiating with? Their initial offer was $50 for use of a photo in their 20,000 edition cookbook. I countered with $150 for one-time, non-exclusive, North American, English language rights. Placement: inside, 1 inch square.
The photo editor accepted the fee but sent this stock agreement.

Let’s analyze this document.
It identifies the licensee and the licensor, me.
There is a place to describe the image. I would include the image number and a brief description.
It’s got the name of the work and a request for all marketing and promotion.
Section 1: this section describes usage license.

Section 2: assures me that I retain copyright of the photo.

Section 3. I warrant that I created the photo, that it doesn’t infringe on anyone’s privacy, that I have authority to license the image.

Section 4. They can crop the photo.

Section 5. They will include copyright notice but where it is placed is a question.

Section 6. They set the terms of payment. My negotiation with the editor was payment within 30 days of receipt of invoice. I will have to have them insert that into the agreement for it to be valid. See Section 7.

Section 7. Anything not written in the agreement is not agreed to. In otherwords, any verbal agreements aren’t valid until they are added in writing.

Section 8. I’ll get a copy of the book.

This is a pretty straightforward agreement. But let’s take a closer look at Section 1. That is not what I agreed to.

So, I started researching again. Let’s see what FotoQuote suggests.
Textbook describes the media.
Fotoquote’s suggestion on the usage I originally quoted was around $233. ( I quoted $150 because the size is very small)
When you add worldwide it increases it to $466.
When you add a future edition/revision it increases 75% to $815.
Now let’s take a look at Corbis.
Interior textbook, 1/4 page, worldwide, up to 20k print run, all languages, 5 years, $780. Another way to look at it would be to increase the print run to 100K or more and see what it says.

I also checked my records to see what I’d charged in the past and found that it was pretty close to these two.

So I told the editor that in the past I had charged between $550 and $800.  We’ll see what she says.

Knowing how much a stock image license costs will help you when you are coming up with your creative fees for an assignment.  You want to make sure you are charging at least what it would cost for your client to license one from a stock agency. You should be charging more because you are creating something unique to that client.

Anyone can sign up for an account at Corbis or Getty. Being able to check what others charge is invaluable when learning about pricing your photography.

Here are some of the things last year’s students forgot to include on the estimate assignment:

A term that stated half (or a third) of the total amount authorized was due upon signing of the estimate.  This means that if your estimate is for $5000, your client should give you an advance of $2500.  This covers your production costs and possibly part of your time. When it is time to submit your invoice you subtract this amount from the total and invoice for just what is remaining.

Be sure to put your small terms on the back. Use the ASMP’s standard terms for this assignment.

Somewhere you should have language stating the copyright remains with the photographer. All usages not specifically listed remain with the photographer.

Be specific in your scope of work. Be specific in what you are delivering to the client, what color space, what size and resolution.  The more specific you are, the less room for any misunderstanding.

Get them to sign the estimate or send you an email approving the estimate.

DON’T copy the examples exactly. Kim’s language in particular is odd. Check out the other examples on the ASMP website.

Get it in writing should be the mantra of every photographer. Every time you license an image or shoot an assignment you must have that contract in writing. Do not depend on the good intentions of a client. The client is not going to look out for you. Their job is to look out for their best interest. They want as much in usage and as little in fee as possible. You must look out for your own best interests.

Your forms should be considered contracts. When writing them pretend that you are testifying in court. Use specific language with correct grammar and spelling. Pay attention to details. Have your clients sign an estimate or confirmation letter, any change orders and delivery memos.

Your forms will vary depending on the area in which you work. Refer to section 5 of the book to see examples. Or, if you are ASMP members, you can go to the website to see the paperwork share examples of real estimates and invoices.

All of your paperwork should clearly state the scope of work, license, fees and your terms. (see terms and conditions worksheet)

What are the Forms that you will use?

Forms you will use include:
Estimate, quote or bid. An estimate is a calculated estimate but the invoice will reflect the actual price. A quote is a firm price. A bid is a firm price that is competing with other photographer’s bids. I usually do Estimates.
Confirmation of estimate, bid or assignment. This can be a separate letter or a signed estimate.
Change order.
Delivery memo sent with the deliverables. Your client should sign this to acknowledge receipt.
Invoice.
Model, property releases as needed
Follow-up, thank you note (aka: request for more work)

You don’t have to reinvent the wheel. Search online to download specialty-specific forms and terms. ASMP, PPA, APA and others all offer boilerplate terms that can be used by their members. Use photography business software like Blinkbid or Photobyte or Inview or fotoQuote that includes ready to print forms with terms. Take time to adapt them to your business.

ESTIMATES and INVOICES

Your invoice should have the same look as your estimate. In general these documents are divided into five sections:

1. Your client’s and your contact information

2. Your creative fees

3. The license for usage agreement and scope of work

4. The production expenses

5. The terms.

The front of a document is where you list the most important elements and those you want to give weight to. The back is for the small print, ie, terms relating to weather delays or cancellation, etc.

On the front:
The client’s contact information, your contact information including address or PO Box, phone, email etc. Do not include your Social Security number
The scope of work or assignment information
The license detailing the usage including number of images, where the photos are going to be used, the sizes, credit line requirements, placement in the media described above and duration of use
The creative fee consists of the fee you negotiated for shooting the assignment* And your payment terms.
As I mentioned last week you can also charge a usage fee. You’d probably want to lower your creative fee if that is the way you choose to go.
The production expenses you will incur including assistants, pre-and post-production costs, processing, meals, travel, props, anything you buy for the shoot. And remember to mark up your expenses or charge an administrative fee.

Here are some samples of estimates.

Mine Please note that the original had the small terms on the back of it.

From ASMP’s paperwork share:  Shawn Henry, Kim Kauffman, Chris Mitchell

I’ve posted examples from last year. Be sure to include a lighting plan showing placement of lights and ratios with your plan.

When forming your business would you be better off as a sole proprietor or an LLC (limited liability company) ?

For most of you the answer is that you’d be better off as a sole proprietor.

I changed from being a sole proprietor to an llc when I began hiring people to shoot weddings for me. I did so on the advice of my attorney and CPA. An LLC gives you just a little more protection of your assets in case there are problems. But you must be sure that your personal and business assets and accounts never mingle.

The best defense against lawsuits is to be very careful in everything you do. And make sure you have adequate insurance. A good business insurance policy will protect you far better than an LLC designation.

As always, check with your professional team, your attorney and CPA, to advise you on what’s best for your situation.

MTG is the company I told you about last week. Its rates for credit card processing are the best I’ve found. www.midtrans.com  is the website.

To adapt the CODB calculator to reflect income from another job simply subtract that income from your expense total. Then divide that number by the number of days you anticipate working.   Ex:  Expenses equal $10,000. Income from other job equals $5000. 10,000-5000=5000.  5000/100 days of shooting = 50 as CODB.

To adapt the CODB calculator for portrait photography instead of shooting days total your expenses.  Just change the description “number of days shooting” to “number of portrait sessions” and divide into your expense number. This will give you the amount you must make on each portrait session to cover your CODB.

Your Assignment Must Follow This Outline. Due October 29th

The Business Plan (50% of final grade)
Adapted by Natalie Fobes from the SBA website
www.sba.gov/smallbusinessplanner/

Most people think a business plan is only for entrepreneurs and those looking for financing but it is a valuable tool for every businessperson. A good business plan will crystallize your thoughts about your business, help you see weaknesses and strengths as well as enable you to make and achieve goals.

Please write your plan for the business you hope to be in upon graduation from school.

1. The Executive Summary
The executive summary is the most important section of your business plan. HINT: Write this AFTER you have written the rest of the plan. The knowledge and insight you gain while researching the rest of the plan will help you craft this section. The summary has three parts.

A. The Mission Statement explains the thrust of your business in two sentences, or a short paragraph. It should be as direct and focused as possible. It should leave the reader with a clear picture of what your business is all about. You should be able to use this when a client asks you what kind of photography (or other business) you do. HINT: Practice this out loud. Think of it as your elevator speech. It should take no longer to recite it than it takes to go up 5 floors in an elevator.

B. A concise history of the business: when it began, who started it, number of employees, location, services and past growth. These can be in bullet form as opposed to writing complete sentences.

C. Your financial and job goals for one year, two years and five years. These can also be in bullet form.

2. Market Analysis
In this section describe the industry, the trends, the potential growth areas, your target audience and your competition. Analyze the businesses you are competing against. List their strengths, weaknesses, pricing, advertising and approach. If you find out your competition is having problems try to figure out why so you can avoid the same mistakes. BE SPECIFIC.

3. Company description, Organization and Management
This is NOT a repeat of the business history you wrote about in the Executive Summary. This is an overall view of how all parts of your business fit together. You should answer the following questions:
A. Is your business an llc, s-corp or sole proprietor? Who owns it?
B. What are your responsibilities? Are there other people in your business? If so, what are their responsibilities? Who is in charge? Even for a two-person business it is important to develop a clear flow chart of duties and responsibilities.

4. Your Service or Product Line from your customer’s point of view
Pretend you are a consumer of your service or product. Use their words to describe what you offer. For example, “I photograph people, places and wildlife” tells you nothing. This statement tells you a lot more. “I create well-lit, compositionally intriguing images that tell a story about my subject. I never miss a deadline and always come back with a
great photograph. I am dependable.” Another example: “The Gourmet to Go Shop has 89 foods in stock.” Better “I will offer busy people a convenient way to buy the food they want by keeping track of their purchases and keeping those items in stock.” Focus on areas where you have an advantage. Identify a problem that your target group might have and how you can solve it for them. Try to put yourself in the customer’s shoes. What is it about what you offer that they can’t get anywhere else? What is the value in your products and services?

5. Potential Clients
A. What are the needs of potential clients/customers that you are trying to satisfy? How are you going to satisfy them?
B. List at least 10 companies or individuals you want to target. Why? Be specific.

6. Marketing and Sales Strategies
Marketing is the process of creating customers. You need customers to survive. Simple statements but ones difficult to achieve. Your marketing strategy is a living, growing creature that needs frequent feeding, attention and adaption.

What is your marketing message? Are you marketing a service or a product? This will determine to whom you send your marketing materials. How are you going to get your customers? Advertising, direct mail, word of mouth? Where are you going to advertise? Are you going to use a service for direct mail or do it yourself?

7. First year budget and start-up costs
While you may not be looking for funding you should act like you are. Create a budget for your first year of operation. This will help you figure out when you might need money and how much. Obviously your initial costs include camera/studio gear. But what about the advertising and promotion campaign you should be mounting six months later? Office supplies? Taxes? Be sure to include the amount you want now to start your business and the amount you will need in six months. BE SPECIFIC.

8. Second year budget
Once you’ve established your start-up costs for the first year create a second year budget based on your CODB. Include your projected income and where it might come from. List office expenses, computer and camera costs, software upgrades, wages, etc.

Projecting budgets is easier after you have been in business for a while. At that time you can use your income/expense information from previous years.

9. Appendix (optional)
This is made up of documents on an as needed basis. It should include you resume, letters of reference, magazine articles and licenses. It may include your credit history, leases, contracts, permits and list of professional service personel like attorneys and cpas.