693. Study the cost of materials and see if your photographs can be produced for the prices that you are asking. Remember, that you are to be honest with yourself and those who are dependent upon you, as well as with your customers. There are photographers who figure only the cost of plates, paper, cards and chemicals, and charge accordingly, thinking that all receipts above these expenditures are profit, and that their profits are large. If they will add the interest on money invested (which is a perfectly legitimate item), the rent of the studio, the cost of fuel, taxes, light, insurance, help (if any is employed), repairs to instruments, furniture, etc., and occasionally the addition of a new article of furniture or a new and improved instrument, in fact all of the necessary expenses connected with the conducting of the business, and not forgetting a reasonable salary for themselves, whose time, labor, skill and energy ought to be worth as much as those of men engaged in other professions, they might discover that business was being done at a loss, and unless prices were raised to meet the discrepancy they would have to close up and retire in a short time. We cannot lay too much stress upon this fact, and it is absolutely unreasonable to expect one's business to be successful if the financial side does not receive continual, careful and thoughtful consideration.

694. Taking Stock

Taking Stock. One should always be well informed regarding the most minute details of his business. The first step is to take stock: Provide yourself with an ordinary day book, and on one page note all of your liabilities: i.e., everything you owe. On the opposite page note your assets. These latter include the value of your studio (if it is your own property), your apparatus, the stock of materials, plates, paper, mounts, chemicals, etc., the amounts owing to you by customers, and the amount of cash in the bank and in your cash drawer. The excess of assets over liabilities is your capital, and the complete statement constitutes your balance sheet.

695. If, at the end of a year, another balance sheet be prepared it may possibly be found that your capital is less, the amounts due to creditors may be more, while the amounts due from sitters are less, and the cash balances are also reduced in size from what they were the preceding year. This will indicate one of two things: Either the business is not paying so well, or else you have been drawing more money from the business than the profits warrant. It is for this reason that stock-taking is important. It enables the photographer to know exactly how he stands, and gives a timely warning that he must devise some means whereby he may increase his income in some way or other. See Chapter XLI (Lesson Xxxi. Spotting Negatives And Prints) (Lesson Xxxi. Spotting Negatives And Prints), Regulation of Prices.