I'm Val! Coach for creatives
like you who are ready to be healthier, happier and more empowered women who love the business you run, the people you serve and the life you live!
013: Profit First for Photographers with Joy Michelle
One of the most common issues that photographers have in their finances is the lack of consistent income. In today’s episode, Joy Michell, photographer turned business coach and founder of Photoboss joins us to share how Profit First shifted the way she does business. Listen in as she highlights how implementing Profit First allowed her to become the CEO of her business, while also giving purpose to the work she was doing.
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Joy felt called to be a business owner to provide for her family, but she dreaded logging into her bank account. She was avoiding her finances and paying herself from her business bank account until someone she admired recommended the Profit First book to her.
The profit first method changed her life, and now she recommends it to her clients to read as well. The profit first method made Joy finally feel like she wasn’t only a visionary creative, but that she was the CEO of her business.
Joy’s favorite thing about the profit first method is having her money organized and assigned different purposes. However, the process has a learning curve and it took time for Joy to get used to it. In the beginning, she didn’t see the purpose of having a separate account for business profits, but now that she’s used to it, she loves having it. She is typically able to use that money on something for her family, which is a rewarding feeling.
Joy’s husband was immediately on board with the profit first method, and he read the book and helped Joy set up all the accounts. However, some of her clients have experienced pushback from their spouses.
However, seeing the consistent money that they are able to pay themselves helps spouses understand the method. Profit first can help make your work more tangible to your family.
Another benefit of the profit first method that Joy has experienced is that it’s helped her separate herself from her business. The fact that there is one account allocated for her pay creates a healthy boundary and helps her avoid becoming enmeshed in her business.
Having that healthy boundary between her and her business allows Joy to look at her accounts and ask objective questions, such as:
The profit first method makes it much easier for Joy to make decisions for her business, especially when it comes to what to invest in for the business. Instead of making decisions based on how she feels, she can make them based on the numbers.
When Joy first started using the profit first method, her operations percentage was higher than it should’ve been (around 60%), and her profits percentages was too low (around 1%). Her owner’s pay percentage was also smaller than it needed to be, which opened her eyes to the scaleability of her business.
For the first year or two, Joy made small tweaks to her percentages until it got to where it is today. These are her current percentages:
She still has a goal of getting her operations percentage down and her self pay percentage up.
Start paying yourself every two weeks. You’ve got to master cash flow if you want your business to be around for a long time.
Youtube: https://www.youtube.com/channel/UC-Ou6jRKxcjMrVMxWxLO_fQ
Photo Boss Courses: https://joymichelle.co/photoboss
Review the Transcript:
Val: Hi friends. I am so excited for you to meet one of my favorite business friends, Joy. We have just so many little things in common. We met on Instagram. It’s just one of those classic fun online business friend stories. Joy, can you tell us who you are, what you do and how you were first introduced to Profit First?
Joy: Okay. Yes. First of all, Val, thank you so much for having me here. It’s such an honor to be back on your show. Okay. So I’m Joy Michelle. I am a photographer turned business coach and founder of Photo Boss. So I primarily help teach photographers to start, grow, and scale their businesses. All things business.
I love it. Okay. So how, how did Profit First begin? This is a good question. I cannot fully remember exactly who introduced me to Prophet First, but I think I was familiar with, the author. I was familiar with Mike Michalowicz and the concepts of some of his other books. And I, eventually enough people had mentioned Prophet First that I felt like, okay, I think I should give this a read because.
I was somebody who I, like, with equal parts, I wanted the business to work and I was like, this is it. I’m called to be a business owner. I need this to pay my family. But I also didn’t like logging into my bank account. So there was like total financial avoidance happening. But I was making money and it would just lead to like weird conversations with my husband of like, Hey, can we transfer this money?
Can we, can we have some of this money? And I was like, I don’t know. So that like, that was kind of like where we were at. And it was just like, Very confusing financially. And I didn’t want to feel that way anymore. And I, people that I admired had said like, Hey, you have to read this. It’s really going to help give you a structure as much as I am a free floating creative.
I was like, I think we might need some structure when it comes to the numbers. So that’s, that’s how it started. I, I started listening to it initially. And then I was like, this is. It’s not something you listen to, like you kind of have to like see the charts and it’s a really entertaining read actually, like it’s a surprisingly entertaining read.
And so when I recommend it to my clients, I’m like, don’t be scared, dive in. It literally has changed my life and my coaching clients lives, like truly, truly, like I will still have people message me and be like, I know what I can pay myself and I feel like a totally different person. Now, as I’m running a photography studio or doing whatever it is that they’re doing.
So, I was listening that I got the physical copy. Then I was like, handed it to my husband. And I was like, can we do this? Because I like, I think this is a great idea, but I’m, I’m just, this isn’t like my forte. But he is all about that kind of stuff. And so. Thankfully, he was like, yeah, let’s, let’s do this.
Let’s run with this. I can account this way. This, this makes sense to me. This is like sort of what we’re doing, but sort of not. And I was like, perfect, let’s do it and try to do it the way he says. And of course, at first, like the, you know, when you’re transitioning in, it’s not an automatic, like percentages are going to mirror what he does.
But that’s, that’s really like my introduction to it. And I want to say that was like four or five years ago, at least it was When I was living in Maryland, I’m trying to remember how it began. But I feel like that was really my introduction to like financial predictability in my business. And there’s just a lot of confidence and clarity that came along with that.
And I felt finally, like I was like, I’m not just a visionary. I’m not just a creative, I’m a CEO of my business. So yeah, I hope that answers your question.
Val: Oh, yeah. No, and that’s, it’s actually very, that’s very similar to my story of where I had my husband also help me. Put it into place and yeah, it’s one of those things that it is really fun and empowering when you first read it and you’re like, okay, I think I’m understanding. I don’t know if I know exactly how to put this into practice, but I think I know I want to do it.
And that’s the point that I think we have to get to because then you start to get into the weeds and you pull somebody in who can help you, whether it’s a coach or even just reading like blog posts or watching YouTube videos. listening to podcasts like this, you know, it’s. It’s just not something that I think creatives, especially in photographers, especially should assume that they will just know exactly what to do.
And I really say that because I don’t want anyone listening to think, man, I must be dumb because I read the book and I’m really confused. If you can just, you know, generally buy into the concept, that’s the starting point, right? Was that. Was there like any hesitation with starting it? Was there any skepticism?
Like, I know that that’s a common, a common part of people’s story.
Joy: I was hearing about the different accounts, the different ways that your money’s coming in and then you’re giving it like a place to go and you’re signing it. A purpose in your business. I really liked that concept because at the time I feel like my money, I had like a checking and a savings. And so I felt like whenever money came into the checking, I, we put some in the savings for taxes.
I feel like that was like, okay, we did the thing that like all the scared creatives do, but other than that, I didn’t have clarity of like, okay, but then the chunk of money sitting in the checking, what is for what? And so I loved the idea of having. Things itemized out so I could see like, what’s the money for me?
What’s the money for the business? What’s profit. I thought that was all like really cool, but the actual like executing of it, like, okay, how am I going to get these accounts to all be displayed the way I want them to? And then the profit one, I was like, I don’t know if I’m going to do that. That seems unnecessary.
We’ll, we’ll get to that. You know, like, I think I started with like a 1 percent profit account or something because, you know, they were like, you have to do the profit account, you know, believe in the system. But at the same time, my husband is like super, Enneagram one, he followed it, he was like, it says five, we’re going to do five.
So I kind of think that I knew by bringing him in that we would do it. Right. And give it a good try. I was like, let’s just see what it’s like, because it’s all the same money. It’s just, you’re just seeing it differently. So to me, it didn’t feel like too scary, but I definitely was skeptical of like, what will it actually look like in the day to day, week to week of my business?
When money comes in, how, how will that look? And so that I think there was a little bit of a learning curve there of when you assign things like where, where’s the money going and how exactly are we going to do that? I do think though that like, technically you’re supposed to have an outside bank account.
For something. And I don’t do that. I just have it all on one dashboard screen. Like I can literally see everything through one login, which has really worked well for me. But I think other than that, like we generally follow the principles of the business. And now my profit is at 5 percent where it should be.
And I love the profit distributions. Oh my gosh, like, best thing ever, and I think it’s a really cool concept to separate out your profit distribution as the owner of the company, and your pay as a, an employee, and letting those be two different things, and so I, yeah, it’s been really fun to be like, okay, We’re going to get a profit distribution.
What do I want to do with that? And it, I mean, I don’t think I’ve ever bought something for the business. It’s always something like that I want for the family and it’s, it’s really a rewarding thing. And I love that.
Val: yes. I feel like it’s so powerful and just like you were saying, a lot of people initially are like, do I really need to do that? Is it really make that much of a difference? But it’s a psychological thing. It totally, when you can buy something that you wouldn’t necessarily have bought without your profit.
It just makes you feel so much more grateful, I think, for your business and be like, wow, I am actually like, I’m doing this. I’m successful.
Joy: Yeah. And your family sees it too, which I think is like, it’s such a big part of running a business, a creative business, especially. And I think, most of my clients are women. Most of my clients are photographers and they often say like, My spouse doesn’t fully get this and they’re not fully on board sometimes.
And like, that is a very normal, common, uh, like problem that arises. And I think that that just. paying yourself more consistently, any amount, paying yourself more consistently, and then doing the profit distributions. It’s also for your family to see that like when you’re gone, when you’re on meetings, when you’re doing admin, when you’re shooting, when you’re editing, that they literally are looking around like, Well, we’re like sitting on the couch you bought with profit pay or like it’s just it becomes real for the people in your life Just as real as it becomes for you So yeah, that was like huge for me to like and personally I was like I want to buy like air purifiers and you know All the like fun crunchy bougie things that like I don’t want hat to have to come out of like our families Budget, like our personal budget.
And that feels just like really, really good to be like, no, I’m buying these. Like, I’m excited. It doesn’t affect the personal budget. so my husband’s happy and I’m happy.
Val: Yes. Yes. No, I think that’s a really good point. And maybe that’s an encouragement too, for anyone who feels like. Their husband or anyone in their family isn’t going to be on board. If you can even just start, like he says in the book, start with the 1 percent profit. It might feel really small, but even like even 50, like for you to say to someone, Hey, profit paid for this.
Meal, or for this coffee, like I’m treating everyone in our family to coffee and profit paid for that. Like little things like that. I think that slowly helps people to become more curious and open to the idea of five bank accounts.
Joy: It does sound kind of excessive, but it’s so funny because on the other side of it, having done this for a few years now, it’s not, it, it makes so much sense. And like business. Is a little bit, it can be complicated. There’s a lot of working parts happening. And I think profit first has also helped me to separate the business from me, seeing that like owner’s pay is just like one allocated amount.
It’s not like all this money comes in and it’s all mine. And it’s kind of confusing. It’s very much like my part is just a line of it. And I’ve actually liked that separation because. As like an achiever personality type, I think that we can like enmesh ourselves in a lot of the things that we do to a fault.
And then it becomes really hard to be objective. It becomes really hard to just see, like, this is just information. It’s just, it’s not good. It’s not bad. Is like, and really that was a helpful shift for me from going from not wanting to check my accounts. And then when I did check, not really understanding what am I looking at?
What is mine? What do we do? To now feeling like, okay, we can, we can look at the accounts and we can know more than just we’re in the black. We can know how, how long can we go without making money? Or, can we afford a new coach? Can we afford to outsource editing? Can we, it’s like, So much more clear.
And so I, I really encourage photographers, especially to, to start to like separate out their money because There are going to be these costs that come up and things that you want to invest in and then it becomes so much easier to to be able to make that decision because I will have my coaching clients all the time be like can I I have money like in my bank account.
Should I go to this workshop? Should I hire this person? I want to, you know, get it like an SEO specialist or whatever it may be. And they’re all like really great ideas, but it’s hard to know. It’s, it’s not going to be a feeling. It’s going to be fact. It’s going to be fact whether or not. And so that’s where I think it’s really helpful as creatives to separate that out.
Because We, instead of making decisions based on how we feel, there also needs to be a conversation about the numbers and the data. And like, I know that’s almost like a four letter word, like the numbers, a budget, but, uh, it’s truly, it’s like, it’s actually freedom giving when you lean into that, because you’re so much more confident in the decisions you do make.
It doesn’t feel like guessing.
Val: right? Yeah, totally. I feel like that’s probably one of the biggest benefits of profit first is to have clarity of what you can and can’t do. The emphasis is on can though. I think a lot of people assume that the emphasis is on can’t and what I can’t spend. But like you said, having having those.
Categories, having the guardrails around your spending is what allows you to spend on the things you really want to, because when we spend based on feeling and emotion, we usually spend on the wrong things or at the wrong time. And. And it just forces you to get really strategic and intentional with your spending, which I would say, that’s what really pushes you in the right direction in your business toward the right kind of growth.
And that intentionality is really kind of that underlying benefit of profit first, that seeps into other parts of your business. I hear this all the time that someone’s like, yeah, after I started doing profit first, then I started getting really. You know, curious about what I was offering and if I should even be offering certain things.
And it just, the data gave them the clarity to make the right decisions on what they offer, how much they charge for it, all of those things.
Joy: Yeah. It’s a snowball effect in, in the best way.
Val: Yes, it is. So tell me, what were your percentages when you first started, and how has that changed over time for you?
Joy: Okay. So I don’t remember a hundred percent like how, how it looked at the beginning, but I want to say my operations were much higher than they should have been. Like when I first started, I want to say they were at like 60 percent or something like that. And I
Val: Mm hmm.
Joy: we did profit was like 1%, like very little.
And owner’s pay was much smaller than it needed to be. It was like in order for the business to continue what we were doing, We were like, okay, well, we can’t put the allocation of self pay where we want it to be and that alone just like seeing almost that like what we were doing was not scalable or that I wasn’t going to be able to see the money that I wanted to see, which was like the whole catalyst for the whole purpose of doing this was I want to see more of this money.
I want to see it. Like in our personal accounts, that really informed things. So for a, for a year or two, I want to say we had temporary amounts and then we were changing them like really, really small amounts, like tweaking them, like, okay, I think we can put a little bit more in profit, or I think we can put a little bit more in.
Val: hmm.
Joy: I want to say, so I have notes here cause I don’t, the funny thing is once you start doing it, it becomes automatic. So this isn’t even something I think about on a daily basis. This isn’t something like we’ve even discussed recently. But essentially you have your five accounts and so all of the money comes into your income account.
And then as it stands right now, operations is 40 self pay is 40 profit is, Five and tax is 15, I believe, last I checked.
Val: And that’s great.
Joy: I mean, I’m happy with that, but at the same time I do, I’m still working towards getting operations down and owners pay up. I think that’s always the goal. And when you, I think that was a little bit, daunting to me.
Like, see, I think the goal should be 50 isn’t, isn’t it?
Val: Yes. 50 is the goal for up to 250, 000 gross, and then it goes down a little bit above that, but
Joy: So I think that’s amazing. And, and when I heard that, I was like, well. No, like if I make a thousand dollars as a photographer, I don’t actually see 500 of it. I think we think we do. We think we do. That’s the thing. And you’re like, of course, you know, we put a little aside for a lens or for taxes, and then you think you see it, but there can be a disappointing feeling at the end of the year when you have made a good amount of gross income, but you have very little to show for it.
And that can be just super, disheartening.
Val: Mm hmm.
Joy: frustrating and all those expenses that felt like the right move at the time start to feel less like the right move. And you say, I don’t know, I would end years feeling like, well, I’m a little annoyed at like how much I spent on coffee and lenses and workshops and, you know, things like that.
So I think that just being a little bit more aware of it in The month to month helped me, but it wasn’t at the end of the year in retrospect, cause that feels like way too late to be making financial decisions.
Val: Mm hmm. Yeah. And I think it’s helpful to, just for people to hear that you started at 60, you worked your way to, you said 40. Yeah. And that 20%, I mean, that like is an awesome change and, but even to hear like, you know, That you’re very successful and you’re still working on getting closer to the 30 percent recommendation or, you know, whatever that number is for you, but just getting more in owner’s pay less than OpEx, like it takes time.
And I think that is hopefully encouraging for people that you can. You can just start with 1 percent profit. You can start with just figuring out what are your current percentages, because whether or not you’re thinking in percentages, you can figure out what you’re currently spending and where it’s going.
And then you just start, start taking baby steps. And, and that’s the beauty of this process because it’s percentages, it’s easy to tweak.
Joy: Mm hmm.
Val: little changes over time. And it, it really does make such an impact. So tell me. Really quick, just some of, like, as a photographer, as someone who is deep in the weeds with photographers on a regular basis, what would you say are maybe like the top 3 misconceptions that photographers often have about money?
And how Prophet First really helps with that.
Joy: I think that like, one of the biggest things that comes to my mind right away is like, more on a money mindset standpoint. And this is with creatives in general too, but I think that sometimes we think that because we’re really naturally talented at something, or because we enjoy it, that we can’t also make great money from it, or that it’s somehow wrong.
Like, that’s your gift to the world, so it should be
Val: Mm.
Joy: And that is false, and super exhausting, and I think eventually with that mindset you come to a point where you’re so exhausted and broke that you don’t even have the option to share that gift, that talent, that passion with the world in a way that would be Mutually beneficial in an exchange of money and where you would feel rewarded, your family would feel compensated and the world can see what it is that you create.
So that is a, that’s a big one. And I think even for some people who don’t think that’s happening, there’s such a cap of what they think they can charge, what they even feel is like moral or right to charge. And like, we just need to separate out right and wrong from Profit and what is truly sustainable for your family as a photographer.
So that’s one thing that I think comes up really common. Like all the time I’m, I’m walking my clients through some of that and some of like, what’s going on behind the scenes and what does this mean? And like letting them kind of work through that. The other thing that’s a really common money issue with photographers is thinking that like the first couple of years of setting up that business.
They. They had certain expenses and that they won’t have those expenses anymore. And what I’ve learned is that the business is not going to get any more affordable to run in my experience. Like, even if you have the gear that you need, there’s going to be cleaning. There’s going to be maintenance. There’s still insurance.
You still have software. Second shooter fees. Then you start wanting to get into higher level education as you should, and continue to pour back into your business in terms of like outsourcing. So while you may not need to buy another mirrorless camera body, the last year’s statement of like how much you spent on your business could still be pretty accurate for this year.
And so I think sometimes we. Are overly optimistic about what we’re going to do and how it’s going to look so different from the year before when really? That is very Indicative of your spending habits. And, you know, it’s like, it’s interesting how closely, no matter how long I was in business, eight years into business, there were still going to be gear costs, education costs, you know, gift costs, marketing
Val: Mm
Joy: Advertising, there’s just so much. And it, I just, I just noticed that, you know, even though I wasn’t setting up the business anymore, scaling the business took just as much, if not more money. And so that was, that’s something that’s really important to keep in mind is not holding onto this idea that like, I’m just going to spend this this year and then we’ll be set.
You have to start living and spending in a way that is actually sustainable and that you could keep up with instead of saying. There’s a lot of temporary, one off, shot in the dark. I’m gonna invest in this and then. You know, like, you wanna make sure that like, what you’re doing is truly sustainable. Um, yeah, have you found that to be the case?
Val: Yeah. Totally. And I think that a big part of that too is even just planning ahead. A lot of people make those spending decisions throughout the year as they go, but I’m a really big proponent of like set an investment budget. So that, you know, I can spend this much, whether it’s on equipment or education or outsourcing, like that’s why I like the term investment budget, but you also can have specific budget line items for each of those things.
If you are consistently bringing in the income to cover that. And so I think it’s. Often one of the easiest places to start in this whole process is just to list out what are your recurring expenses and how much have you spent in those categories that maybe it’s not the exact same expense every year, but you’re still spending money on education or on outsourcing, whatever it is.
So that’s really where, so my overhead expense breakdown is the spreadsheet where I just try to get people to like, get it all in one place. And have that kind of come to Jesus realism moment of this is how much I’m actually spending. So,
Joy: those yearly subscriptions are the sneaky ones because I don’t see them every month. And then I remember, oh yeah, show it. Oh yeah, Tailwind. Like, because it’s a better deal to pay once a year, but it can be a little bit misleading. So that’s, that’s awesome. I love that.
Val: So if you were to just give one piece of advice to a, an, A new photographer, let’s do two pieces, one to a new photographer and one to somebody who’s been in it for a couple of years, kind of surrounding money. What, what would you want to say to them?
Joy: I would tell both of them the same thing. I would tell them you need to start paying yourself something every two weeks. There’s nothing more eyeopening. Then that, like, that is going to take you down a rabbit hole. Like, and if you don’t know how much you could afford to pay yourself every two weeks, that’s your next piece of homework.
This is a powerful thing for any creative at any level. But you can start doing that even as a beginner and it’s just, it’s going to be one of the best things that you do for yourself is to not wait to pay yourself. I mean, I know that’s like the premise of the whole book that, you know, businesses fail not because.
There’s not enough demand in the market or because it’s too saturated, but because of cashflow issues. So if you’re listening to this and you’re like, no, I’m going to be somebody who’s still around, my business is going to still be around. I’m going to beat the statistics of making money as a creative.
Then you’ve got a master cashflow. Full stop.
Val: Yep. 100%. Amazing. And for anyone who feels like I have no idea how much I can pay myself, how to figure that out. I have a freebie that I will link and that can at least get you started on that process. So Joy has so much to offer and you guys need to follow her at minimum. We will link all of the things in the show notes, but Joy, can you tell us quick, just kind of like what your offerings are, how do people work with you and how can they just glean from your wisdom?
Joy: Yes. Well, this has been so fun. Thank you. Okay. So a couple of ways that you can learn from me for free are my podcast, the Call to both podcast and my YouTube channel. I have hundreds of videos on my YouTube channel for photographers and photo bosses trying to build and grow, a sustainable business as a photographer.
Lots of marketing. Pricing, posing, all the things. And on the, what are my offers? So I have, one on one coaching for photographers and creatives. That is a three month program where you can, we can even hop on like a 20 minute call and see if it’s a good fit. And then I have my photo boss programs.
So I have the toolkit, which is a grab and go what you need, when you need complete, like arsenal of information for brand new photographers. And people who are really. Transitioning into making photography a career, quite literally everything I wish I had when I started my business. And then I also have my flagship program, the photo boss method.
So that’s a video course program, and a self study. And then I have some pitching templates for creatives called pitch power. All about helping you be clear and concise about getting visibility in your business, because that’s huge. It’s like, we all need to get in front of people and be able to collaborate.
And I’m like a big proponent of like brand deals and sponsorships and all sorts of things that creatives can be doing to diversify their revenue. And so that is available through Pitch Power.
Val: Awesome. Guys, for real, at minimum, you have to listen to her podcast. She just like spouts wisdom all day long. So
Joy: Thank you.
Val: follow her, listen to her. Thank you, Joy, so much for sharing your story with us and just giving us some really great, great things to think about and things to implement. You’re awesome.
Joy: Thank you.
I'm Val! Coach for creatives
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