Lessons From a Day Job, Part 3: Planning Your Budget | Rob Greene

Transform your entrepreneurial dreams into a profitable reality as I recount the pivotal shift from my desk-bound day job to a flourishing photography venture in the concluding part of our mini-series, "Lessons from a Day Job." Embrace the art of annual budgeting and learn how it can be your secret weapon for financial stability and long-term success. It's not just about the numbers; it's about aligning your fiscal strategies with your business goals to create consistent six-figure revenues. Listen in, and I'll show you how strategic resource allocation and expense management played a pivotal role in my journey, and how you can apply these lessons to turn your passion into prosperity.

As the curtains draw on this 3-part series, I delve into the essentials of crafting a workable, flexible, stress-relieving budget for your business. Discover how to navigate income predictions and expense management with ease, because a well-defined budget shouldn't be intimidating—it should be empowering! By breaking down the importance of revenue categorization, seasonal booking projections, and a payment structure that ensures a steady cash flow, I lay out the roadmap to a financially sound future for your business. You'll walk away with actionable strategies to transform budgeting from a chore into a source of joy.

QUICK LINKS:

Square 8 Studio Annual and Quarterly Calendars: https://www.square8studio.com/calendar
(Use promo code BOP for 90% off our Annual Calendar through Jan. 15!)

College101 (FREE 5-Day Mini Course): https://www.square8studio.com/college101

17 Ways to Make Money: https://www.square8studio.com/17ways

Transcript

Speaker 1: 0:11

You're listening to the Bop the business of photography podcast with Rob Green, a photographer to contagiously positive clients and fierce believer in building people-focused businesses that leave a lasting impact. If you're an entrepreneur with dreams in your head, ideas in your heart and passions burning deep down in your soul, this is the perfect place to be, because this is where dreams come to thrive. So are you ready to build your business, wow your clients and make photo magic? Here's your host, rob Green.

Speaker 2: 0:43

Aw, coming at you from DFW Texas. You are listening to the Bop. Happy New Year, friends. It is right around the corner. We are about to turn the page on 2023, heading into 2024.

Speaker 2: 0:56

My name is Rob, so glad to have you with us for this third part of a three-part mini-series of episodes, all about lessons from a day job, things that I learned in years and years and years of sitting at a desk and working in jobs that were not my current job, hoping to one day be able to do the job that I do now for a living running my own business. Because y'all, it can be hard. And you have this dream, this massive dream to run your own business, create your own life, your own schedule, your own rhythms. It's just sitting out there on the horizon as this thing you're reaching for and you want it so bad. And yet you feel so stuck in the realities of the current position you're in that current job, the stability of the bills that get paid because of that job. Y'all it can be hard. I get it. I've been there. I created this series of three lessons from a day job to be able to help those of you that want 2024 to be the year that you're able to go full-time with your business. To be able to do that To show some of the lessons that I learned that as I put these into practice really made a massive difference for me in being able to grow a business that has been successful now for eight straight years, that has brought in six-figure revenue for eight straight years. I want that for you too, and so, if you haven't caught up on the previous two parts of this three-part series, if you're just jumping in for the first time today, I want to encourage you to go back and check out parts one and part two.

Speaker 2: 2:32

In part one, we covered planning your calendar and the ways that I organize my calendar each December, early January, to be able to prep for the year ahead. Then, in part two, we talk about planning your marketing, because once you have a calendar in place and you have this overarching picture of what's going to be going on in your business in the year ahead, it's easier to start working out in advance and planning the marketing for these things that you want to do in your business this year. And finally, today we are going to be talking about planning your budget. Y'all this one is huge because you can plan all the great things you want to plan. You can market it however you want to market it, but at the end of the day, if the dollars aren't there to keep the business profitable, you're probably not going to be doing this for very long, and so, y'all, I want to give you some incredible, just frameworks and principles that I use when planning out my budget each year that will help you to be more profitable in the year ahead.

Speaker 2: 3:29

Now, all of this is based off the calendar that I put together. So if you haven't checked out those episodes, one of the things I talk about in both of these first two episodes is the calendar that I use. I use both an annual and a quarterly calendar that I've created to do all of my planning, and I'm giving you guys 90% off my personal annual calendar through January 15th. So if you want to take advantage of that, go to square8studiocom slash calendar and when you go to check out on that annual calendar, put in promo code BOP and it'll be good through January 15th. It'll take 90% off the price. I'm trying to bring this thing as close to free as we possibly can for you guys so that you can be set up for success in the year ahead, but all my budget planning is based off and built around the calendar that I've already planned out at this point.

Speaker 2: 4:17

Now, like I said, these series of episodes are called lessons from a day job, and so I want to kick off today's episode with the lesson that I learned about budgeting from my day job, and this is the lesson that I learned artist budget by the gig, ceos budget by the year. Here's how I learned this lesson when I first got to Fort Worth, texas, the job that I had was working at a church and, as I mentioned in the last episode, I asked my boss if I could spend my opening weeks at this job simply working on a plan for the future, which meant that I was getting into all the ins and outs of budgeting what kinds of resources were allocated to which parts of the budget and what I found was we had a budget for this youth ministry that was maybe 30 students at the time. That was as large as the budget that I had for a youth ministry of 800 to a thousand students back in Atlanta, and so I started looking through the numbers and going where is all this money going? And what I found was it was going to this one big event that was happening at the start of the year that everybody loved so much and were so excited about. The only problem was, over the years, it had drifted to becoming something that a bunch of other churches brought all their students to but weren't putting in any money towards. We were putting in all the money, they were bringing their students to benefit from it, and it wasn't doing anything to help our our students grow and reach their friends. So ultimately, what I realized was we had the resources to put out an entire year's worth of programming for our students If we would just start to be more strategic about how we spent our dollars on this one big event at the start of the year. But what does this have to do with running your photography business? Fantastic question, fair question.

Speaker 2: 6:13

When I started looking at taking my photography business full time, I went around and asked all of my photography friends questions about how they run their business. Maybe you have photography friends in your world You've been doing something similar with. I was looking for themes in the things that successful people were doing and themes that the unsuccessful people were struggling with. As I did this, what I realized was all of my friends that were really stressed out and not enjoying themselves as photographers had two problems. Number one they were buried under the weight of all of their editing piles. They had gotten behind on their editing. So I made a real quick commitment I'm not ever going to get behind on editing. But more to the point of today's conversation, all of my friends that were struggling financially with their business were all living from gig to gig. They were living from booking to booking. They would say things like if I can just book one more wedding, I can get that lens. If I can just book one more family session, then I can get a new iPhone. Everything was based around if I can just get one more of these things, then I can buy one more of these things. All right. But then on the other side of the equation, I was thinking about what I was learning at my day job.

Speaker 2: 7:29

And at my day job, every year we had to submit a budget for approval. This budget had to reflect all of the income that we planned to bring in from events, from t-shirt sales, from anything else we had going on that would generate revenue, but it also had to reflect all the expenses that we would have along the way. If we were planning to put on an event, we had to go and pre-calculate and pre-determine months in advance what we were going to spend that money on. And what I found was by taking time each summer to develop this budget, to submit to someone else for approval, to check and put eyeballs on and go yes, this looks good, this looks realistic. It allowed us to make a plan for a year and then work that plan all year long, knowing that as long as we hit our marks on income and expenses each time, we were going to be just fine budget-wise.

Speaker 2: 8:21

And then what that also allowed us the freedom to do was, if we brought in more income or were able to be better stewards of our expenses than we had planned, we could go back to the people over us and say, hey, we have some additional revenue. We have this dream that we would like to go after of a certain event or a certain gift for students, whatever it might be. We had the freedom to go and do those things because we beat our budget projections, and that meant for me, as I was starting to plan my business, I said, gosh, I don't want to be like all my friends that are struggling, trying to make a booking so they can buy a phone. I want to be more like this business that I've been working for that takes time each year to sit down and plan for their income, to plan for their expenses, so that every month, throughout that year, every day throughout that year that follows, they're actually working off a plan and they're working with intentionality and being good stewards of the resources at their disposal. Because when you're a good steward of your resources, your resources can go a lot farther. I must say that again, when you're a good steward of your resources, your resources can go a lot farther, and that's why this budgeting exercise that I'm about to walk you through, that I do each December, can be really influential for your business in the year ahead. So, again, our underlying theme here, our bop bite for the day, is that artists budget by the gig, but CEOs budget by the year, and that's what we're going to do is walk through how I budget each year. This is an exercise that I have just gone through myself and have worked out for the year ahead and I'm really excited about because we've got some really exciting initiatives on the agenda for 2024. And I wanted to know that I had the resources to be able to fund those initiatives.

Speaker 2: 10:16

Let's start with income, because, let's be honest, it's way more fun to make money than to spend money. We don't like seeing the money flying out the window. We like seeing it come in the door so that we have it for the things that we need to be able to spend money on. Here's the question I want to pose to you when it comes to your income Is $1,000 a month a good month or a bad month? Some of you right now are going that would be a phenomenal month If I could bring in $1,000 every month. That would be mind blowing progress for my business. Some of you, though, are hearing $1,000 a month and thinking that would be terrible. I would flounder. My business would be struggling if I had only $1,000 come in one month.

Speaker 2: 10:55

Here's my answer to the question it depends how much did you budget to make that month. If you only budgeted to make $200 and you made $1,000, then that's a really great month, but if you budgeted to make $10,000 and you only make $1,000, that's a really bad month. Everything you generate is good or bad based on what you were anticipating bringing in in that month. And, to make matters worse, not all months are created equal. Yet a lot of us, when we think about revenue, we think, oh man, I just made $10,000 last month, I'm going to make $10,000 this month. And that's not always the case, because there's an ebb and a flow and a rhythm to where that money comes in throughout the year. And one of the things that I love about creating a budget is you can then track your progress year over year and see where those ebbs and flows happen, to see where your slow seasons are revenue wise, to see where your busy seasons are revenue wise and, little hint, they're not always the same as where you're busy and slow. Shooting seasons are Sometimes, for me, my busiest seasons for revenue are my slowest seasons for shooting.

Speaker 2: 12:04

It's all a matter of how you run your business, but you can't know what to expect if you don't have a plan in place. And this is what I love about this process is it allows me to have a plan and know what to expect from month to month. Here's how I do it. The first thing that I do in my business is I set up the categories of revenue that I expect to generate throughout the year. For me, those things look like college grads, weddings, sororities and corporate events, headshots, prints and education With each of these.

Speaker 2: 12:38

I ask myself this question and this is what I'd like you to ask yourself as well, as you're planning this Realistically, not pessimistically, because we tend to get really down on ourselves and we think about what's possible. But I want you to be realistic, not crazy. Optimistic, not negative, nancy, just realistic. Realistically, based on the time that I plan to spend working on my business each month. What is the minimum number of each of these things that I see myself booking in January, february, march, april? Go month by month and guess realistically at what you think is the minimum number of bookings you could have for each of your categories in that month.

Speaker 2: 13:17

Now here's where it gets fun is, if you've already followed steps one and two of my planning guide, then you already have a calendar set up that you can use as a guide. You want to pay attention to your busy seasons, you want to pay attention to your slow seasons and then you want to estimate accordingly. If you know January is not a month where you get a lot of revenue coming in, then don't budget for a lot of revenue coming in in January. Likewise, if you're like man, march and April, those are my big revenue months. Plan for bigger revenue in those months, plan for more bookings in those months. And this is where understanding how your business works will have a big impact on where you budget this money.

Speaker 2: 13:57

For me, any booking under $3,000 is all due up front at the time of booking. Anything $3,000 and over gets split up. Where 50% is due at the time of booking, the other 50% is due 60 days out. This allows sororities, corporate events, weddings all to be able to spread out their expenses. It also allows me to go ahead and generate future revenue right out of the gate. When they book, I can already go ahead and plan. Not only am I bringing in 50% of that revenue right now in this month, I'm also going to have another 50% coming in at a later date, 60 days out from the event. But what that means for me is let's take college and sorority, for example. Most of our sessions happen between March and May for our spring grads, but most of those sessions get booked between November and January. So while many of my photography friends have their businesses slowing down, mine is ramping up in terms of revenue, where November through January can be some of my biggest months of the year, because that's when people are booking the sessions that are being shot March through May. So figure out what your rhythms are in your business, where you expect your bookings to come in, and slot those expectations in by the month January through December for the year ahead.

Speaker 2: 15:14

Now let's talk about expenses, and I know this part isn't always as fun because this is where the money's going out. But I'm telling you guys, when you have a plan, it's not as scary, it's not as dreadful, it can actually, dare I say, even be kind of fun. So, with my expenses, the first thing I do, just like my income, is I set up my categories For me in my business. What I do is I categorize my expenses by people. These are things like second shooters, fees paid to campus reps for their referrals. They bring in associate photographers. Then I have a category for gear purchases, for marketing, for online services, anything like a gallery hosting platform or a CRM. I have a category of expenses for travel, for my own education, admin and taxes, and then I keep a miscellaneous category that I just put a little money in and plan for extra expenses in this miscellaneous category every single month, just like with your income.

Speaker 2: 16:10

You're going to ask the question based on my plans for this year, what are my known expenses? This is where you can tap into your marketing plans and your calendar and start looking at okay, if I've got these events going on and these things that I need to market for these things that I want to run Facebook ads for, these things that I want to create flyers for, these lenses that I need to buy in the year ahead, this apparel that I want to get to ramp up my branding game when I'm out shooting, whatever it may be, this is where you want to ask yourself what are your known expenses? Start with the monthly stuff, the expenses that you know, like a CRM or a gallery service are going to be there every single month. They're not going away. Put those in first.

Speaker 2: 16:54

Then start with your annual expenses, and one of the things I want to encourage you to look at for your business is moving some of your monthly expenses to become annual expenses. That can be scary at first, because you're thinking, oh, but then I have to pay hundreds of dollars all at one time for my gallery service. Yes, but by paying monthly right now, most of these services charge you extra dollars for the freedom and flexibility of using their service monthly. If you will pay for it in advance, you often get one or two months of their service for free. So if you know these expenses are coming every month, go ahead and make the expense an annual expense and save sometimes as much as 20% on your annual expenses across your budget simply by paying one time a year instead of 12 times a year. Lastly, put in the one time expenses things like gear purchases that you're hoping to be able to make in the year ahead. Go ahead and pick a month where you're planning to buy it. That way, you can look at it across your projected income and your projected expenses and see do the numbers add up to make that purchase during this month?

Speaker 2: 17:59

Which brings me to the last part of the process, which is balancing the budget. This is the fun part. You get to check your income and your expenses and you get to ask yourself do the numbers add up to a positive number or a negative number? If they're a positive number every month, great, you're good to go. If they're a negative number, you have two options. Number one you can plan for increased revenue, which is typically more bookings or higher price bookings, or you can plan for decreased expenses.

Speaker 2: 18:29

When I'm decreasing my expenses, I start with my one time expenses, like gear purchases. Why? Because they're often larger and easier to postpone than a monthly service fee, not to mention easier to add back in if your revenue comes in higher than expected. A monthly thing is typically something that you're locked into and need for your business over and over and over again, so it's harder to reduce those expenses. And the great part is y'all this is no longer guesswork. These are real calculations you can make with your bottom line in mind. If you see there's not money for a lens purchase in June, but the projected revenue for July and August is going to be higher, then push that expense back to August so that there's always money in the bank to be able to keep your business going.

Speaker 2: 19:15

Now you might be wondering how do I keep track of this throughout the year and make sure I'm staying on track Like it sounds fun to do once in December. But how do I keep this going? Well, uno, if you remember, I referenced in part one of this that I start by planning my rhythms of rest in my business, my out of office days, and when I plan those rhythms, one of the things that I plan for is I pick a day on my calendar to track my progress each month with my budget projected versus actual, and then I update my projections accordingly as I go. So if I wind up with a month where I was planning to book three weddings and only one came in, then I will go through and see do I need to make any changes to my future projections and expenses based on this. If there's plenty of money in the bank, despite my wedding projections coming in lower than expected, I don't make any adjustments. But if I see that missing the mark by two weddings in June causes me to start going under on the in, going into the negative in July and August, that's where I want to start shifting my budget projections around to make sure I'm staying in the positive.

Speaker 2: 20:23

This can be a huge stress reliever, anxiety reliever, because you now have a mechanism in place. You don't have to wonder am I gonna make it next month? You can literally go into numbers that you have projected and tweak things and alter things to plan for your success, to plan to stay afloat when things don't go as you planned in one particular month, and y'all. This is why I say you always guess low on the income and high on the expenses. That way, every time you're wrong, every time there's an error, it's always in your favor. If you start with the lowest possible income and you're wrong, then you're wrong because you brought in more revenue. If you guess the highest possible expenses and you're wrong, then any reduction in expenses means more money sitting in the bank for you.

Speaker 2: 21:09

This is how I plan my budget. I plan it every year, I track it every month, I adjust accordingly. I guess low on the income, I guess high on the expenses and y'all. It's allowed me the freedom to dream, to grow my business, to see six-figure revenue from the very start. From year one in my business, I've been able to go after the goals that I put on my calendar. I've been able to market them with excellence because I planned ahead and there were budget resources that were always available to fund those dreams and fund those goals because of the planning that I did in advance.

Speaker 2: 21:45

That's it for today's episode. Y'all. I hope this has been an encouragement to you as you're sitting at your day job. I hope this gives you the freedom to dream a little bit, the freedom to have an actionable plan for the year ahead. Cannot wait to see what you do with this. If you put it into practice, drop me an email.

Speaker 2: 22:03

Admin at Square 8 Studio. Let me know how it's going for you and would love to hear or shoot me a DM on Instagram at Square 8 Studio. Would love to hear how this is working for you in your business. We'll be back next month with our regular interview format. Cannot wait to share with you all the things we have in store for 2024. Until next time, friends, keep learning, keep loving and keep chasing those dreams you were made for. You know what no photographer ever asks how can I make less money? As small business owners, we're always looking to make just a little bit more, and most of us just need someone to show us how. What if I told you college and sorority photography could give you not one, not two, but 17 different ways to make more money in the months ahead. To download my free guide, visit square8studiocom. Slash 17ways today.