Kyle Hepp

December 10, 2009

I am unplugging for one night from the madness. I’m not going to think, much less blog about what’s going on. I’ve left the three stooges boys to their own devices back home while I sit at Panera and work for a little while. Conveniently enough, even the battery on my phone died so I can’t talk to anyone right now either. It’s like the universe wants me to be alone.

So I’m not blogging about what’s actually happening in my life, and I’m not in Chile at the moment so I don’t have any exciting expat stories to tell. However, the business is the undercurrent always flowing in my life. It never goes away, it’s always in the back of my mind. And as I’m still going through some of the questions asked in the survey, I thought I’d tackle one of the big repeat ones, which was mostly people asking about how to start/run a small business in Chile. These tips are based of off running a photography business obviously, but really could be applied to any kind of business.

Two things I did wrong:

1. I tried to market myself specifically to the high end clients. I spend a lot of time in wedding photography business forums and so much of the advice is geared towards telling photographers to market to high end brides. And just in conversations in Chile, I heard over and over that to be successful, “you need to find an in,” referring to cuico (upper class) social circles. It took me a little while to stop buying into that advice. I realized that it’s absolutely not true. Marketing to cuicos isn’t me. I’m not a cuico, I live in Estacion Central for pete’s sake. I’m not going to pretend to be richy rich just to try and find more richy rich clients. It only took me a few weddings to realize, my target market isn’t the cuico demographic, my target market is the people who genuinely care about having good wedding photography. They aren’t spending a lot of money on hiring us just because they have money to spend. They are spending money on us because photography is of high value to them. Once I learned that, I was able to market in a way that’s much truer to myself and my business and in turn, in a way that’s much more effective.

LESSON LEARNED: Market to your target market, not what people tell you your target market should be.

2. I tried to do things the Chilean way. When I met with clients, or responded to emails and phone calls I would try to keep things very business-like, even though that goes against my entire nature of being. But I knew that was how Chileans do it and I figured, when in Rome… And I would get these ideas in my head for really cool shots, but I wouldn’t even suggest them to clients because I figured that they would probably prefer the more traditional style since that’s the way Chilean photographers do things. Little by little though, as I gained confidence in myself as a business woman and photographer, I began to do things one hundred percent my way because I realized, DUH. These people hired me because they want what I do, not what other Chilean photographers do.

LESSON LEARNED: Do things your way. If your way is good, people will like it, even if it’s not the typical Chilean way.

Two things I did right:

1. I thought about my business as a long term investment from the get-go. This year so far, we’ve earned about $20,000. Not bad, you might think, for a business in it’s first year in Chile. However, we’ve spent about 17,000 on equipment, software, website stuff and marketing materials. I definitely could have continued on with my old website/blog and shooting on the same camera and lenses we started out with. They more than served their purpose, and it would be more than nice to have an extra 17k in the bank, especially considering that you could live off of that for a year in Chile. But, I knew that if we wanted to be in this for the long haul that investing in getting top notch everything would only help. So I worked a full time job + photography in order to be able to afford what I needed to get a good start. Because really, how far can any business get with a DIY website/DIY logo/DIY anything. You have to take yourself seriously if you want other people to do the same.

LESSON LEARNED: Don’t get full time until you’ve set yourself up for success.

2. I made a budget. I have a huge spreadsheet keeping track of everything that we’ve earned/spent/will earn/will spend on photography related costs and on life in general. Because of this massive budget that I have, when we came to a crossroads that was really a natural jumping off to go full time — I had just quit most of my blogging jobs after getting hit by a car and Seba’s company offered him a large severance package or the option to continue working for a reduced salary — we knew that with the money we currently had and the weddings that were already booked, we could afford to continue living a lifestyle we’re happy with off of photography as our only income. I don’t stress over big purchases or even last minute expenses. All I do is plug them into my spreadsheet and say, “Can we afford this right now, yes or no?” Before we decided that we wanted to buy an apartment, I just ran the numbers to see what we can afford and came up with an absolute maximum. Anything above that would have us broke by May. When you look at decisions in such a cut and dry way, it’s not hard to make the right financial choice.

LESSON LEARNED: For people who don’t have a set up income, budgeting your income and expenses is absolutely key.

*ETA: As requested, here’s what our budget spreadsheet looks like. I keep one copy on a regular Excel and periodically upload it to Google Docs for backup. Because I would DIE if my budget ever got lost!

I have one column for expenses in dollars, which come out of our U.S. account and one column for expenses in pesos, which comes out of, you guess it, our Chilean account. I made this spreadsheet waaaaay back when we were still saving up for our trip. I have one sheet for estimated expenses, which I just have shown as a lump sum rather than tracking things like food and gas all separately. I have been paying enough attention to how much we spend for long enough that I can correctly estimate a month’s living as a lump sum without problem. Each trip we take is also a separate expense/lump sum, rather than putting it down as plane ticket, car rental, spending money, etc. Then at the very bottom are total fixed costs, Marcelo’s tuition, our insurance, which we pay privately since we’re self-employed, and my student loans. When we buy an apartment our monthly rent+gastos comunes+electricity+internet will be another lump sum added to that column. At the bottom of the sheet is the total amount calculated into both dollars and Chilean pesos, which changes depending on the conversion rate that I plug in.

The next sheet is our estimated earnings, showing all weddings booked and the remaining balance on each. I don’t put down income from sessions in our estimated earnings as sessions are too prone to canceling and never re-scheduling so I’d rather not count on that money until we actually have it. Again, I have a column for dollars and pesos and then the bottom calculates the total in both dollars and pesos.

The next sheet just shows our current bank totals for both bank accounts in Chile and in the U.S. and then calculates the total in pesos and dollars again.

The last sheet shows how much money we will have left over come May. As of right now, our budget goes only goes through then. I am not really speculating out further than that because I figure we probably won’t  have started booking weddings for the next wedding season (November ’10- April ’11) until around then aside from the few early birds. So the last sheet is simply our current bank account totals, plus our total earnings from now until May, minus all estimated expenses. The expense sheet shows totals from now until May rather than monthly, as that’s too complicated for me. So for example, if we pay 100,000 pesos monthly for our insurance, my expense sheet shows that total as 600,000, since my budget is calculated out for the next 6 months.

Thanks for asking, Kathleen, I LOVE THIS STUFF! Ha! I’m such a nerd.