End Of Fiscal Year - How Have Gas Prices And Inflation Affected Your Bottom Line? Total results: 4 Pages: 1 [ 1] |
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 ID: 182744 Posts: 1920 | Date: 2007-09-30 04:49 Well, reading all the numerous complaints while I was gone regarding the site
getting away from its professional roots for more seedy conversations, I figured
I would bring up an issue important to everyone here - budgeting and finance.
I was taking a look at last quarters numbers, then this past years and looking
at the budget projections for the new fiscal year that starts on Monday.
Whoa!
Gas prices and transportation costs are absolutely through the roof!
The first three quarters of this calendar year saw my expenditures in this area
increase by 250%. That's a huge chunk. I bit the bullet and suffered a reduction
in profit margin as a result. However, such a reduction is not sustainable.
That leaves three choices.
1) Increase prices to clients.
2) Reduce expenditures.
3) A combination of both.
Passing along price increases is always problematic and I, like many other
businesses I know, have tried to avoid passing along price increases, hoping
that the market would stabilize and inflation decrease. At this point, in spite
of the cut in the Fed rate, I doubt this will happen. Yet, to increase prices
while the competition holds the line reduces competitiveness.
Reducing expenditures is a tough one but probably preferable to losing clients
to increased prices. Reducing fuel burned on photoshoots and marketing efforts
cannot happen since the shoots and marketing must be done! My rates for
advertising have been increased and since June the bulk of my advertising
dollars promotes the models more than my companies. Hotel rates and airfare have
increased. Rather than reduce the cost side that generates
business, I am faced with the bitter option of reducing payout
costs to talent. That would mean a cut in salaries paid to models on the
photography end and possibly a reduction in commission from 15% to 12.5% on the
agency end. Use that 2.5% decrease to offset the 250% fuel cost increase. The
other way is to reduce the amount of days a model is on-island...cram all the
takes into as short a time frame as possible and reduce re-shoots. The savings
are on hotel rates and on daily rates for models. This avoids a pay cut to
models for hours worked, but the model still gets less pay. Contracts would also
have to be negotiated to a lower pay rate.
The final option is to combine a minimal price increase with a minimal pay
reduction.
It is an ugly picture and I can see stress levels increasing for the first two
quarters until everyone is used to the new reality.
So, I was wondering...are you all experiencing this same kind of crunch in other
areas of the world and, if so, what are you doing about it? Have faith that the universe will unfold as it should  |
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 ID: 183878 Posts: 1599 | Date: 2007-11-02 08:56 Lots of looks here, Karl, without any comments. I think most of the people here
are really kids and a few wannabes or browsers. I'm retired and have a really
supportive wife!
Yours is possibly the most difficult of locations, considering so much has to be
imported, including your models. Everything has to cost more. I think your last,
a slightincrease in fees and a cut to the models, will be the best option of a
difficult situation.
On the plus side, they are getting a trip to the tropics.
I joking called my summer trip, the trip of a lifetime. As costs rose, due to
the falling dollar, it actually became a once-in-a-lifetime trip. We will not be
able to afford to repeat the style or length of our trip. In the future we'll
have to shop for the best transportation deal and arrange for modest lodging
(a-tenting we will go) and stay away from restaurants with tablecloths.If I haven't been there, I'm still planning on going!
If I haven't done it, I've still got time to try! |
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 ID: 209819 Posts: 80 | Date: 2007-11-03 19:50 Hi, just wanted to say that I am also a retired photographer. Not by choice but
for many of the reasons that Carib mentioned. Costs and competition increased
and margins became smaller. When it came time that I needed new lab equipment I
couldn't justify the expense. I retired from photography and went back to the
blue collar trade I had when I was very young. Though my income is multiple
times what it was when I had a studio and lab there is little personal reward.
So anyway, I want to wish you luck with controlliing your costs and remaining
competitive in your market. Try to keep in mind that your competitors are facing
the same problems as you and they won't be able to suck up the tight margins
very long either. |
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 ID: 215488 Posts: 1 | Date: 2007-11-12 16:21 Same problem in England, everything's increasing but earnings are stagnant or
going down.
Prices...you don't want to know! over $10 for a gallon for petrol.
Most of my income comes through in $US.
5 years ago this was about $1.48 to £, now it's about £2.10.
Had a meet with my bank last week and they are forecasting $2.35 over the next 3
years.
That's a 40% reduction in income over 8 years but costs increasing year on
year.
Difficult to increase prices in the current climate, so reducing costs is the
biggest area to hit.
Models rates are going to plummet over the next 12 months.
I share my time between Spain and England at the moment, but early next year I'm
relocating permanantly to Spain. Living costs are about 30% below that of the UK
plus, as I've just signed up with 2 new libraries specialising in bikini/beach
glamour, it's a good location to shoot (better than England)
Kev |
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