Sharpen your focus and aim high - starting a business

Nation's Business, August, 1988 by Nancy A. Peters

Sharpen Your Focus And Aim High

Too much caution can be a fatal mistake in business. My husband and I learned this the hard way when we opened a photo-processing lab to print high-quality photos for people whose needs weren't met by the one-hour minilabs.

Our goal was small. We hoped our specialized lab, named Norman Peters, after my husband, would supplement my husband's pension and my salary from part-time work as director of a play school. We would work out of our home in Hendersonville, N.C., so overhead would be low and the profit margin high. My husband, a former photography teacher, would do the lab work, and I would handle the books. All we had to do was find the customers--probably photographers who needed custom work and did not have their own labs.

Several seminars at the small-business center of the local technical college reinforced what we had thought: You can't get customers without advertising. So, our first step was to place ads in a national photographers' magazine. Every day we checked the mailbox, and every day we were disappointed. No one responded.

Perhaps something was wrong with our ad. We had written it hurriedly to meet the magazine's deadline. We tried again, and had another disappointing month.

Heeding the warning that regular advertising was the only way to stay in business, we took money from our dwindling savings account for a series of ads in the local weekly shoppers' guide. Finally, during the third week, the phone began to ring.

But the customers who called didn't give us the business we had expected. With each customer we spent an hour or so explaining our processing lab and giving hints on processing and taking pictures. We often had repeat business, but the customers asked repeatedly for the same thing--one print at a time for $8.95.

We were busier, but we weren't making money. In fact, we were losing plenty--more than $500 a month.

After several months in business we were forced to admit that it was less expensive not to be in business than to be in it this way. At the same time, we were reluctant to lose our investment in supplies, darkroom and work areas.

Then, after four months as entrepreneurs, we had the kind of luck that every small, struggling business needs. In January, we had a call from the owner of a small firm that sells novelty items.

She had seen our ad for custom work and wanted help. Her husband had been doing the promotional photography that she placed in catalogs, and the prints were out of focus. Could we help?

Well, we could, but not by printing her husband's photos. Norman told her that those pictures wouldn't give her the look she wanted. He offered to do the photography himself.

Norman's first job taking pictures for our company showed our client's daughter wearing various custom-designed sweatshirts. The customer was extremely pleased and placed a large order for prints to send to magazines for their new-product columns.

After struggling as film processors, we finally had enough volume to show a monthly profit--about $25--all from this one customer's repeat business. We then realized that we had gone into the wrong end of the photography business.

Later, when we photographed numerous bridal items for this same client, my husband saw another business opportunity for us. We became printers' representatives. Using our contacts in the photography business, we arranged high-quality printing of our client's catalog sheets at a fraction of the cost she had been paying. In that one day as a photography firm and printers' representative, we earned more than we had ever made in several weeks taking numerous small orders for photo processing.

It took us several months of frustration to discover the kind of business and market that worked best for us. We had assumed the competition for professional photography would be greater than for film processing. We thought we would do better going after a high-turnaround, small market instead of after large accounts. But we learned--the hard way--the more lucrative part of the photography business is taking pictures, not processing them. Add to that the commissions on print orders for brochures, catalog sheets and postcards, and we have a lot more income than from the expensive darkroom.

We also discovered that satisfied customers were our best form of advertising. True, the ads we had placed got us our first local customers, and we are still advertising, but with a difference. We now target our ads toward larger accounts. A few references from ads lead to much more business by word of mouth as long as we provide quality work at reasonable prices.

Our business could have gone under if we had been unwilling to see where the market was: in photography for large accounts. Our instincts were for quality work, and those were not wrong. What was wrong was our fear that we could not handle commercial accounts because we thought they were too big for us. But we can do quality work on a larger scale, and only that larger scale has enabled us to turn what is now a respectable monthly profit.