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Phoebe's Photo Studio

Executive Summary

Opportunity

Problem

Families need photographs to capture the special moments of their lives. Families of professionals are busy, and if too much time goes by between photos, these moments are lost forever. Babies, especially, grow fast and parents need photos of them several times a year.

While nearly everyone has a camera for snapshots, people need professional quality photos when they will be shown to an important audience, and when people want to be seen in the best light. The Internet has expanded the use of photos, making it possible for anyone to send them or to publish them for wide viewing.

Solution

Phoebe’s Photo Studio will meet the needs of professionals and their families to capture the special moments in their lives and present them in the best light. We will establish a relationship in which we initiate the calls to keep their photos up to date. Digital files of their photos will be available for free by e-mail, or with a nominal fee for CD.  Because of our relationship with the families, when something big like a wedding comes, there’s no place else they would go.

Market

Families with children are the biggest market for portraits. For the purpose of this analysis, these families are divided into three socio-economic categories:

  • College graduates
  • High school graduates
  • Non-graduates

Families of college graduates are most likely to be professionals and to have the means and the taste for professional portraits.  There are nearly 20,000 such families in the metropolitan area. 

Competition

Competitor X is an award-winning, highly creative photographer with a style that one would expect to find in a national magazine.  His prices are the highest in the area, up to $15,000 for a wedding album.  His strategy appears to be to capture the high-end market, where a magazine look is a luxury that people can afford.

Competitor Y is a more typical photographer with more staged photographs and wedding packages running up to $5,000.  His strategy appears to be to occupy the middle-ground of quality and price where most of the market is likely to be.

Competitor Z offers same-day photos.  This is easier to accomplish with digital processing for a studio organized around speed, but the quality is necessarily sacrificed.  The market for same-day photos doesn’t necessarily demand quality.  Prices are average.  The strategy of this studio appears to be to appeal to convenience and speed.

Why Us?

Our competitive edge is that we provide not only a photograph, but a program of ongoing portraits to capture the special moments in a family’s life. We then make the digital images of their photos easily and affordably available for distributing on the Internet.

Expectations

Forecast

Phoebe’s will grow at a healthy annual rate by targeting families of professionals with newborn babies for baby pictures and then developing a relationship with the client over the years for ongoing photographs. The funding envisioned in this plan is projected to result in a comfortable healthy business by the third year. 

Financial Highlights by Year

Chart visualizing the data for Financial Highlights by Year

Financing Needed

We foresee a total of $80,000 in startup financing to get this business going and healthy. That comes $10K from owner savings, $20K as a 5-year loan (family cosigning), and $50K as an interest-free loan from family. 

If the business proceeds according to plan, we will have about half of the $50K family loan paid off within three years. 

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Opportunity

Problem & Solution

Problem Worth Solving

Families need photographs to capture the special moments of their lives. Families of professionals are busy, and if too much time goes by between photos, these moments are lost forever. Babies, especially, grow fast and parents need photos of them several times a year.

While nearly everyone has a camera for snapshots, people need professional quality photos when they will be shown to an important audience, and when people want to be seen in the best light. The Internet has expanded the use of photos, making it possible for anyone to send them or to publish them for wide viewing.

Professionals often have business needs for high-quality photos, and through this familiarity, they acquire a taste for them. When these professionals need photos to preserve memories, or to display family photos when they entertain at home, they have the budget and the desire for similarly high-quality photos. Just as they appoint their homes with fine furniture and decorations, the photos on their walls need to exhibit their standards of quality.

Most people use professional photo studios only on rare occasions, such as weddings, yearbook pictures, or baby portraits. Because the client has to initiate the call, many special moments are lost and the studio loses potential business. Photo studios generally charge a large fee for CDs of their clients’ digital images. For these reasons, most photo studios are rarely used by families as a whole.

Our Solution

Phoebe’s Photo Studio helps clients preserve memories and portray themselves in the best light. We thrive on repeat business by developing relationships with our clients and calling them with timely reminders for new photos. We make professional quality photographs easily available in a digital format. We do this by using a pricing structure that makes our digital photographs a household staple and by making it fun for them to come here or to have us in their homes.

Target Market

Market Size & Segments

Families with children are the biggest market for portraits. For the purpose of this analysis, these families are divided into three socio-economic categories:

  • College graduates
  • High school graduates
  • Non-graduates

Families of college graduates are most likely to be professionals and to have the means and the taste for professional portraits.  There are nearly 20,000 such families in the metropolitan area. 

We will target female professionals and wives of professionals, because women make the majority of purchasing decisions in these families.

The competitive environment is divided between luxury magazine-quality photographers, moderate professional photographers who mostly pose their subjects, and same-day photo studios.

The trend among our targeted consumers is toward more digital photography and more sending of digital images on the Internet. As the world becomes more technical, people need more personal support. 

Phoebe’s Photo Studio will use a "high-tech, high-touch" approach to reach and retain clients for their ongoing photo needs. We will make it affordable and easy for them to disseminate their photos electronically.

People who who pay for professional photo portraits are generally status-conscious professionals who have children, and so we’ve segmented the Eugene-Springfield metropolitan area according to the social status of families. We’ve used education as a measure of social status.

Families of College Graduates

Professionals are, almost by definition, college graduates. They are the ones most likely to have a need for professional photo portraits for career purposes. They are also most likely to have the means and taste to want professional photos for their families, as well.

Families of High School Graduates

People who have not completed college are assumed to be more likely to be employees or be in a trade. While many of them may have the means for professional photos, relatively few will use them. They are more likely to use home-made photographs, except for rare occasions, such as a high school photo or wedding.

Families of Non-High-School Graduates

These are families who are generally without the means to hire professional photographers on a regular basis.

Demographics

The Eugene-Springfield metropolitan area has a total population of 330,527. There are 74,836 families.

Some 25.5 percent of the adult population in the metropolitan area is composed of college graduates, which we will here define as professionals. Some 62 percent of the population is made up of high-school graduates.

The Eugene-Springfield metropolitan area closely conforms to the boundaries of Lane County, Oregon. The office will be located in Eugene, but clients are accessible throughout Lane County through physicians’ offices. Most Lane County residents are accustomed to doing occasional business in Eugene.

Competition

Current Alternatives

Competitor X is an award-winning, highly creative photographer with a style that one would expect to find in a national magazine.  His prices are the highest in the area, up to $15,000 for a wedding album.  His strategy appears to be to capture the high-end market, where a magazine look is a luxury that people can afford.

Competitor Y is a more typical photographer with more staged photographs and wedding packages running up to $5,000.  His strategy appears to be to occupy the middle-ground of quality and price where most of the market is likely to be.

Competitor Z offers same-day photos.  This is easier to accomplish with digital processing for a studio organized around speed, but quality is necessarily sacrificed.  The market for same-day photos doesn’t necessarily demand quality.  Prices are average.  The strategy of this studio appears to be to appeal to convenience and speed.

Our Advantages

Our competitive edge is that we provide not only a photograph, but a program of ongoing portraits to capture the special moments in a family’s life. We then make the digital images of their photos easily and affordably available for distributing on the Internet.

Keys to Success

Keys to Success

Our keys for success are:

  • Target marketing for the gateway products of baby pictures, high school photos and wedding albums.
  • Developing relationships with our clients through personal customer service, to turn one-time customers into lifetime clients.
  • Our system of tracking clients’ ongoing needs for photos and taking the initiative to call them for appointments
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Execution

Marketing & Sales

Marketing Plan

We will get the word out by conventional advertising to start, and by a yellow page ad, social media and a website. We have a targeted marketing effort to:

  1. Families of newborn babies
  2. Families with children old enough to graduate college or high school 
  3. Professionals who need a LinkedIn or Facebook shot, or a headshot for conferences. 

Sales Plan

A special for the first baby picture will be a regular feature of our pricing structure. This is offered with the intent of getting the whole family on an ongoing basis as clients, because babies need photos frequently and we want these families to be clients for life.

Operations

Locations & Facilities

We will open in an 800 square-foot studio at 100 Main Street, the heart of the commercial district with ample free parking.  The space will be leased for three years beginning at $800 a month with cost-of-living adjustments made annually. 

The studio will have a highly visible electric sign and a 20-foot wide display window visible to passing foot and auto traffic. Customers will enter a public area with a counter, samples of our photographs and albums, and couches for waiting. A separate playroom with props and other toys will accommodate children with sitting areas for parents, while a utility area off the back door will be set up to accommodate pets and their props. Children, pets and props can be brought into the photography studio for their photographs.  An office and working area will be used for assembling the final product.

Milestones & Metrics

Milestones Table

Milestone Due Date
Newspaper display Ad
Jan 02, 2020
Radio Spot Ad
Jan 09, 2020
Website Development
Aug 08, 2020
Radio Spot Script
Sept 05, 2020
Yellow Page Ad Design
Sept 19, 2020
Direct Mail System Ad For Newborns
Sept 26, 2020
Newspaper Display Ad
Oct 03, 2020
Electric Sign
Nov 01, 2020
Move In
Nov 21, 2020
Employee Training
Dec 05, 2020
Radio Spot production
Dec 05, 2020

Key Metrics

Key Metrics 

  1. Measure website page views and customer inquiries 
  2. Keep track of Facebook page views and Twitter re-tweets 
  3. Train our staff to return calls right away 
  4. # of customers in a month 
  5. # of customers who book a second appointment in advance 
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Company

Overview

Ownership & Structure

Phoebe Peters has worked as an industrial photographer and freelance portrait photographer in Southern California for 10 years. She has found that personal customer relationships are the key to repeat business and will open Phoebe’s Photo Studio in downtown Eugene, Oregon on that premise.

Team

Management Team

Phoebe’s Photo Studio is a sole proprietorship owned by Phoebe Peters.  It will open in a leased 800 square foot studio in downtown Eugene, Oregon.

Phoebe Peters is a graduate of Brooks Institute of Photography in Santa Barbara, California and is a member of the Professional Photographers of Oregon and the Professional Photographers of America. She has 10 years experience capturing the special moments of people’s lives.

Personnel Table

2020 2021 2022
Owner $43,200 $50,000 $60,000
Employee $36,000 $36,720 $37,454
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Financial Plan

Forecast

Key Assumptions

We assume a stable economy with reasonable growth and a steady rise in interest rates. We also assume that our competitors won’t adopt our strategy within the first two years.  After that, our approach is likely to make a change in what our competitors charge for digital files, because they’ll see it’s effective in bringing in repeat business as well as new business. 

The expenses show the impact of close to $30K startup expenses, which we put into the first month. Those expenses are listed below in the Use of Funds chapter. 

Revenue by Month

Chart visualizing the data for Revenue by Month

Expenses by Month

Chart visualizing the data for Expenses by Month

Net Profit (or Loss) by Year

Chart visualizing the data for Net Profit (or Loss) by Year

Financing

Use of Funds

Start-up Expenses

  • Rent $480
  • Insurance $300
  • Filing Fees $50
  • Utilities and Deposits $500
  • Paper $200
  • Website Development $2,000
  • Marketing Consultant: Ad design, etc. $20,000
  • Personnel Costs for December $3,500
  • Software $1,500
  • Office Expense $200

TOTAL START-UP EXPENSES $28,730

Start-up Assets: $13,000 in computer and photographic equipment

Sources of Funds

We will be using the $10,000 cash from my savings, plus a $50,000 interest-free loan from family, and a $20,000 5-year loan co-signed by family. The plan calls for funds to service the bank loan and repay most of the family loan by the end of the third year. 

Statements

Projected Profit & Loss

2020 2021 2022
Gross Margin $119,489 $137,820 $156,314
Operating Expenses
Salaries & Wages $79,200 $86,720 $97,454
Employee Related Expenses $15,840 $17,344 $19,491
Utilities $1,200 $1,200 $1,200
Insurance $300 $300 $300
Rent $9,600 $9,600 $9,600
Sales and Marketing $7,800 $8,000 $8,000
Startup Expense listed in Use of Funds $28,730
Maintenance of Cameras $600 $600 $600
Offsite File Backup $720 $720 $720
Interest Incurred $678 $596 $440
Depreciation and Amortization $2,600 $2,817 $3,216
Gain or Loss from Sale of Assets
Income Taxes $0 $0 $0
Total Expenses $174,604 $159,576 $177,357
Net Profit ($27,779) $9,924 $15,293

Projected Balance Sheet

2020 2021 2022
Cash $24,428 $17,306 $14,196
Accounts Receivable $6,563 $5,284 $6,119
Inventory
Other Current Assets
Total Current Assets $30,991 $22,590 $20,315
Long-Term Assets $13,000 $15,000 $17,000
Accumulated Depreciation ($2,600) ($5,417) ($8,633)
Total Long-Term Assets $10,400 $9,583 $8,367
Accounts Payable $2,540 $2,219 $2,411
Income Taxes Payable $0 $0 $0
Sales Taxes Payable $0 $0 $0
Short-Term Debt $43,820 $28,976 $14,138
Prepaid Revenue
Total Current Liabilities $46,360 $31,195 $16,549
Long-Term Debt $12,809 $8,833 $4,695
Long-Term Liabilities $12,809 $8,833 $4,695
Paid-In Capital $10,000 $10,000 $10,000
Retained Earnings ($27,779) ($17,855)
Earnings ($27,779) $9,924 $15,293

Projected Cash Flow Statement

2020 2021 2022
Net Cash Flow from Operations
Net Profit ($27,779) $9,924 $15,293
Depreciation & Amortization $2,600 $2,817 $3,217
Change in Accounts Receivable ($6,563) $1,278 ($834)
Change in Inventory
Change in Accounts Payable $2,540 ($321) $192
Change in Income Tax Payable $0 $0 $0
Change in Sales Tax Payable $0 $0 $0
Change in Prepaid Revenue
Investing & Financing
Assets Purchased or Sold ($13,000) ($2,000) ($2,000)
Investments Received $10,000
Dividends & Distributions
Change in Short-Term Debt $43,820 ($14,844) ($14,838)
Change in Long-Term Debt $12,809 ($3,976) ($4,138)
Cash at Beginning of Period $0 $24,428 $17,306
Net Change in Cash $24,428 ($7,122) ($3,109)
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