This should be a big year and a profitable year in photography - a year of big effort, big business and better business.

Big business is only big business when it is profitable business. A great amount of business at little or no profit indicates lack of economy or an incorrect estimate of cost of production and selling. Economy is prevention of waste whether it be of time, effort, material or money. But one may practice every economy and still do business at an actual loss.

It costs a certain amount to operate a studio for a given minimum of production. We will say one employs a receptionist who is also a retoucher, and a printer and does the negative making himself. The profit will be greatest when this force can be kept working at or near its maximum of production.

We have heard it said that in a town of a given size there is only a limited amount of business to be done and it is just a ques-ion of who gets the most of it. We don't believe this is true - in fact, we know it isn't. Three photographers in a town of 10,-000 people may do a certain amount of business. Three photographers in another town of the same size may do twice the amount of business.

The unbeliever will say, But there is a wonderful difference in the way people buy in those two towns," and we admit this fact.

This is not an advertising story, but we can't help mentioning the fact that advertising is one means of making your efforts productive. By making more people want photographs and by making those people who are your customers want photographs more often you can bring your production up to the full capacity of your plant and so make and sell a dozen pictures at the least possible overhead cost. Good advertising will do it.

You have read a great deal about system and bookkeeping methods, etc., and when it is all boiled down it simply means knowing your business and being able to prove by your books that you do know it. There is nothing really difficult about it, but to one who has a small business and has never kept a set of books it seems difficult.

There is no denying the fact, however, that the man with the system properly operated will almost invariably make more profit on a given amount of business than the man who guesses at costs and profits.

You should have an accurate statement of your business for 1918 to be able to determine with fair accuracy what your cost for a dozen photographs will be for 1919.

If you haven't a system in operation, start one at once, and from the results obtained you can figure what it has cost you to make and sell each dozen pictures you have produced and what your profit has been. Of course, costs should be figured on a year's business to give you a correct estimate.

Keep an accurate record of every penny of your studio expense. This should include, besides the salaries of employees, a suitable salary for yourself and any member of your family who may work in the studio. If you own your building it should include an amount for rent that you would have to pay if another were the owner. It should include advertising, cost of displays, heat, light, water, repairs, insurance, postage, office supplies, telephone and sundry expenses and any losses from bad debts. It should include a year's interest on your total investment, which you will know when you have taken an inventory, as well as depreciation, which is figured in your inventory. Charge also any losses of any nature and any donations to charity, etc.

Once you know exactly what it has cost you to produce and sell your work - manufacturing and selling cost, which, to make it still more simple, we will call overhead", you have only to figure the cost of a year's material to be in a position to get at your net cost. From this net cost it is then a simple matter to figure what your selling price must be to make the desired amount of clear net profit.

We will suppose that your average sales for the year were $1,000.00 per month, and all your expenses were $600.00 per month. Of this $600.00 you spent $200.00 per month for material and $400.00 per month for all other expenses. Therefore, your physical material represents 40% of your cost and your overhead 60% of your cost.

Eastman Commercial Ortho Film Negative, Artura Print By Chas. A. Townsend Belfast, Maine.

Eastman Commercial Ortho Film Negative, Artura Print By Chas. A. Townsend Belfast, Maine.

To find the price you must charge for any order of work, find the actual cost of material. We will say you determine this is $3.00 on a certain dozen of photographs, then:

40% of cost, or physical material,

= $3.00

60% of cost, or overhead,

= 4.50

100% or net cost.

= $7.50

How much profit do you wish to make on this dozen portraits which it will cost you $7.50 to produce and sell?

Here is the way the business man will determine what his selling price must be to make a given profit on his sales.

To make a profit of 50% on the selling price you must add 100% to the cost.

For 40 % profit add 66 2/3% to cost " 33 1/3% " " 50 % " " " 25 % " " 33 1/3% " " " 20 % " " 25 % " "

We found our net cost was $7.50 for a dozen portraits and we want to make 33 1/3% profit:

$ 7.50 =

net cost

3.75 =

50% of cost

$11.25 =

sale price

Reverse the problem and you prove the rule, for 33 1/3% of $11.25 is $3.75.

There is a rule for doing this same problem which works equally well. Your selling price is 100% and you wish to make a profit of 40%, so your cost must be 60%.

Divide the cost, $7.50 by .60, the percentage of cost, and the result is $12.50, the selling price.

Once you have established selling prices that yield you a satisfactory profit, based on the previous year's business, you have only to increase your business without materially adding to your fixed overhead expenses to increase your profits. Increasing your business during dull months is the most likely way of adding to your profits, for you are keeping your help busy.

Just here is where the value of good advertising is seen. Advertise to get new business - keep an accurate account of your expenses - keep up your collections and avoid loss from bad accounts, and never sell your work without making a fair profit, and you should have the best business in 1919 of any year in the history of your career.

System is worth studying carefully for it is as important as the quality of the work you make. Ask your dealer for the booklet "System for the Photographic Studio."

Eastman Commercial Ortho Film Negative, Artura Print By Chas. A. Townsend Belfast, Maine.

Eastman Commercial Ortho Film Negative, Artura Print By Chas. A. Townsend Belfast, Maine.