Your best month isn’t telling you the truth

It’s August and you haven’t had a full Sunday to yourself in weeks. Weddings, communions, family sessions that only work in this light, the car permanently loaded, the suitcase never quite unpacked. You sleep little. You edit at two in the morning. And then, one evening, you open your banking app to check whether a transfer has come in and you find the highest balance of the year.

And you think: this year is going well.

Sorry to be the one to tell you, in August of all months: that money isn’t yours. It belongs to your February self.

And if you work with families, newborns, children or communions, don’t close this yet, because it’s about you too. Your August doesn’t fall in August. Your peak arrives in October and stretches to Christmas, or it turns up in spring with communion season. Right now you’re on the opposite side of the graph: looking at a diary with too many gaps, working out how many weeks are left before the phone starts ringing again. Swap the months and everything that follows works exactly the same.

Because this isn’t about August. It’s about having one month that feeds you all year, and believing what that month tells you.

Your bank balance is a terrible dashboard

There’s a distinction that business schools explain with charts and that life explains with frights. Cash is one thing; profit is another.

Cash is what’s in the account today. Profit is what’s left once you’ve paid absolutely everything that money is already committed to: the tax you haven’t settled yet, the months when you’ll invoice nothing, your real salary (the one many photographers never pay themselves, and then call the difference “profit”).

The problem is that the bank shows you the first figure every time you open your phone, and nobody shows you the second.

Judging your business by your August balance is like judging a country’s climate by the temperature at midday in July. The number is true. The conclusion is false.

We learned it the hard way too

I’ll tell you my own story, because it’s the only one I can tell first-hand.

Quite a few years ago, when Arcadina was still doing custom web projects, six to eight of them came in every month. On that average we lived comfortably. We had no cash problems and no financing problems. None. It had become one of those things you stop checking because they always work.

Until one month two came in. And the month after that, one.

We never worked out why. There was no crisis, we didn’t lose a major client, nothing broke, we hadn’t done anything differently. What had been happening for years simply stopped happening.

Income is variable. Costs are not. Payroll lands exactly the same in the month eight projects come in and in the month one does, and so do the insurance, the rent, the servers.

So what did we do during those months? Nothing remarkable: we drew on the credit line we had available at the bank. That’s what it’s there for, we thought. We didn’t give it a second thought.

That is precisely the part I want you to underline.

The day the mirage ended

In October, the bank decided not to renew the credit line.

And everything landed at once: we had to repay it in full and, after three bad months, there wasn’t enough cash to cover it. The hole had been open for months; the only thing that had happened was that someone else was covering it for us, and we had preferred not to look.

Several meetings with the branch manager followed. Several. And in between, weeks of sleeping badly, of real anxiety, of going to bed not knowing whether tomorrow you would have to close the company down, with everything that means: your project, your money, your name and, above all, the people who trusted you and get paid at the end of the month.

It was resolved. The manager eventually offered us a loan for more than the credit line, which let us clear it and keep some cash in hand until income recovered. And be careful with the easy reading, because I made it myself: banks are very poor friends precisely when you need them most, yes, but the way out came from one specific person sitting on the other side of a desk. Institutions don’t pull you out of holes. People do.

What you learn there isn’t what to do

It’s what not to do. And however small that sounds, it’s what actually shows you the way.

We came out of it with three things clear.

That we couldn’t depend so heavily on new work arriving every single month. We had built a company that started from zero on the first of each month and had thirty days to prove all over again that it existed. We needed at least a significant part of our income to be predictable, whether or not a new project came in.

That the buffer had to be far bigger. The swings aren’t an exceptional misfortune: they’re part of the business. They will happen again. The question isn’t whether, but how many months you can survive when they do.

That we had to forecast sales. Not guess: forecast, by looking at what had happened in previous periods. It sounds like something only big companies do, and it isn’t. It’s simply no longer driving with your eyes on the rear-view mirror of your bank balance.

The same three questions, your version

You don’t need to do anything this week. You have enough on. But before September is out, sit down for half an hour with these three.

What can you sell in your quietest month? You already know which one is yours. And be careful, because it’s easy to answer a different question. “What can I photograph in January” is a photographer’s question. “What can I sell in January” is a business owner’s question: who have you already photographed and never called again, what could you offer them, which part of your work keeps generating income months after the session ended and without you standing there holding a camera.

How many months could you survive today without invoicing a single euro? You need two numbers: what you have, and what your business consumes every month simply to keep existing (rent, subscriptions, insurance, software, loans, the lens you’re paying off in instalments). Most photographers I speak to don’t know the second one by heart, and it’s the most important figure in their company. Divide one by the other. The result usually hurts, and the hurt is the useful part.

How much will you invoice six months from now? Don’t invent it: open up what you invoiced in that same month last year, and the year before. You already know. You’ve just never looked at it all together.

And now, the uncomfortable part

The high balance of your best month has a purpose. It buys time: it pays for the quiet months and, above all, it funds the changes you can’t make when you’re drowning.

What almost always happens instead is that the off-season eats it without anyone having made a single decision. And the following year you open your phone in your good month, you see the highest balance of the year again, and you think again that this year is going well.

If you’re in high season, you’re sleeping badly because you’re editing at two in the morning. Believe me: that’s infinitely better than sleeping badly for the other reason.

You haven’t had a good August. You’ve had an early February. And if your best month is November, your February is called June. What you decide to do with that money over the next few weeks will say far more about your business than any photo from this season.

 

Until next time,

 

Félix Mezcua