Most of the information I am presenting isn't really aimed at the large studio, but I am sure it could be adapted and expanded. I just don't have any experience to draw from here-I'm not a big studio. I am not really qualified to go in depth on the subject. HOWEVER, I don't want to skip it as an option.
In the area I live in there are a couple of these. One stands out in my mind. To protect the innocent here let's call them Joe Miller Studios. I don't know a Joe Miller, or a Joe Miller studios but I am sure that there's at least one or two out there somewhere-this is not THAT Joe Miller.
Joe Miller Studios started out as Joe Miller "photographer" taking senior portraits. Evidently Joe had a dream somewhere and some business sense because now Joe Miller Studios is not just Joe himself taking photographs, but a few photographers who are photographing seniors. They are contracted with many of the high schools between 3 states to provide their senior portraits and they even do some of the underclassmen photos for a few. If you want your senior portrait in the yearbook for those schools you must have your photograph taken by Joe Miller Studios.
Joe Miller Studios sitting fee is usually cheap or at the right time free. They even come to the school and take yearbook shots for an insanely cheap price like $20 per person. They spend the day doing 15 minute appointments of the seniors and taking 3 to 5 basic headshots. One of which is the yearbook photo. You are under no obligation to purchase a thing from them, you only have to choose your yearbook photograph.
Now, if you did the math you figured out that it's only about $500 or so they are collecting for a day of doing this. So, how does Joe Miller Studios make money? Easy. When the "Mom On A Budget" looks at that $20 sitting fee compared to the other professional photographers around the quick math happens in her head: "$20 or $200? NO BRAINER!" Then when the proofs are ready and she sees her gorgeous daughter or handsome son in those photographs she has to purchase a few things. And of course she has to get a print for Grandma and Grandpa... and the other grandparents... And what senior doesn't demand 100 wallets to exchange with all of their frineds???
Joe Miller Studios print prices are a bit above the national average for an 8x10 from a studio. So, when MOAB orders herself an 8x10 along with the two sets of grand parents and the wallets that the senior MUST have for sharing she spends another $400. $420 for 15 minutes. Take out the studio's overhead and paying the hourly photographer AND photographer's assistant it's still a net of about $100 in Joe's pocket. Not bad for 15 minutes!
The profit margin is based on the volume they do. Of course there are people who take advantage of the free sessions if they HAPPEN to see one of Joe's (not so prominently placed) advertisements. There are also those who pay the $20 session fee and not purchase a thing. But they are photographing as many as 32 kids in one day. The laws of probability are on Joe's side.
Joe Miller Studios also does full out senior sessions at their studio. Again these can range from FREE if you catch one of those advertisements or $20 for 40 minutes of studio time and $35 for 80 minutes of studio time. Joe hires photographers who need little to no knowledge in how to actually set up the shot in camera or the studio lighting for a low hourly rate. The client comes to their location and has much a much more extensive set of photographs taken. The minimum package you can purchase is 2 "units" and it runs $65.
If the parents are sending their child for an actual portrait sitting chances are even more on Joe's side that they are going to purchase more than 2 "units" and probably some announcements, invitations and about 10 units of those blasted wallets that the kids NEED! That just bumped us back up around the $400 mark.
On the average studio's like Joe's have an overhead of about 60 to 70% give or take. We'll say Joe's overhead is more along the 70% range. In their busy season Joe has maybe 2 photographers working in the studio (one being Joe himself), and one out at the high schools doing those full day things. Combined the 3 can photograph about 48 seniors. If each of those pays the $20 sitting fee plus a lowball figure of $300 in prints that's $15,360 a day gross. Take operating costs and overhead out of that and that's a possible NET to Joe of about $4500 PER DAY.
As of today Joe's website says he is contracted with 17 high schools that REQUIRE his studio take the photograph if the senior wants to be included in the yearbook.
There are another 16 schools that he is one of their "approved" photographers for their yearbook.
None of those are tiny schools by any means. Quite a few of those schools will have several hundred kids graduating this year. Joe is booked, overbooked and looking for spare time.
Joe's operating schedule is from 8 am to 4pm Monday, Wednesday, Friday and Saturday. 9 am to 8 pm on Tuesdays and Thursdays from June through August. No sessions at all in September through December and limited appointments from January through May. Joe has lots of time off!
Joe is looking at a possible $1.5 million dollars (give or take) in gross sales over his roughly 100 days of operation. He's paying somewhere around 70% or more out in overhead. The amount that actually goes to Joe out of that possible $1.5 million dollars $400K give or take. THEN Joe has to pay his own taxes and insurance and retirement out of that. Joe's possible net is more like $300K or less. It's still a lot, but if you think about the %? It's kind of painful to hand over more than million take home less than half of what you pay everyone else. That is also his potential- give or take-based on my 'educated' experience.
Think about that on a smaller scale. If you had $100K in sales and turned over $70K of that to someone else while putting only $30K yourself you'd be somewhere close to tears. And poverty level. It works for the large portrait studios because of the volume they can produce in a very short time. Joe has it made by contracting with those schools for uniform yearbook images. He's got those seniors over a barrel. Many to possibly the majority don't know they can or bother to have another set of portraits taken elsewhere. Joe has it made. They're going to purchase a product from those images even if it's the minimum.
Joe has an office staff to handle the accounting, advertising,
reception, bookkeeping, scheduling, phones, etc. He also has a retail
location. Both the staff and the location are expensive costs. He also
owns a lot more equipment, props and necessary furniture, computers, etc
that a studio needs. Those also cost much more than they do for a small
studio. Because of that Joe's overhead is more than it would be for a
small studio with Joe as the only photographer.
Joe's income is based on that high volume output and managing his studio
in a way that minimizes his costs. Notice how he only operates from
June through July at full schedule? This is just an educated guess, but
I'd lay money that he does that with his employees so that his
liability for Unemployment Insurance is minimal as well as his
requirements for benefits for those employees.
This particular studio is a specialized photographer with limited hours, however this scenario can be played out for any type of large volume studio with any hours.
If this is your goal you have to start thinking long term now. You may only start out as Joe Miller, Photographer, but the decisions you make now will make it much easier to become Joe Miller Studios down the road-by way of that darned planning thing.