Booth Report

STARTING A PHOTO BOOTH BUSINESS

The Trends That Are Threatening Your Business

I’ve been noticing three major trends and got curious about their impact to our industry: Inflation, Labor Shortages, Supply Shortages


1. Inflation


Before venturing out into entrepreneurship, I actually was rapidly moving up the career ladder on Wall Street.

I’ve always been very interested in finance and still spend a lot of time tracking global economics and managing investments.

I’ve been ringing the alarm on inflation to my friends for years now and the outlook still looks very bleak.

Inflation is crippling for everyone except those that own assets.

Essentially, it means the dollar (or whatever your currency is), is devaluing because there is much more of it being pumped into the system. This translates into higher costs… for everything.

I’m sure you’ve noticed. Your money just doesn’t go as far as it used to. Meanwhile, real estate values are sky rocketing. The stock market and crypto is booming. Heck, even Pokemon cards and JPEGs of rocks are selling for six figures+. Those who own assets are getting richer and richer. Those who don’t are getting squeezed. The gap between the haves and the have nots is increasing.

Of course this has major ramifications to you and your family’s personal finances. If you’re interested in learning more about that angle, here’s a popular podcast I put out explaining why “Why Cash Is Trash… And What To Do About It“.

But here we will focus on its impact to your photo booth business.

2. Labor Shortages


Laurent did a great job explaining! Personally, I’d go even further and say that inflation is actually much higher than the CPI numbers he is quoting. Without getting too technical, if you actually analyze how the government calculates CPI, they don’t capture most of the real inflation felt by consumers.


Put simply, if you look at how much stocks, real estate, crypto have increased… or even chicken at the grocery store or lumber at Home Depot or gas at the gas station… they’ve all increased by MUCH more than 7-10%.

Businesses usually feel these impacts first, as their cost of goods increase. Eventually (and inevitably), they pass these costs onto consumers.

In recent earning reports, major corporations like Proctor & Gamble and Nestle have all announced that they will have to continue raising prices due to inflationary pressures.

Laurent was spot on about needing to raise your prices just to keep up with inflation. $1,000 today is not the same as $1,000 3 years ago.

If you have not raised prices, you are in fact earning less.

Imagine this for a moment… you have a team, of let’s say 10 people. By the end of the year 5 or 6 may be gone.

One out of every two employees is looking for a new job in the coming 12 months. Now, will they all do the actual move? Probably not. But will more than ever before? I think so.

Employees across the country are in major migration. Check out these statistics:

  • In April, more than 4 million employees quit their jobs, another 4 million did in June.
  • 56% of Gen Z workers said they were unhappy with the work-life balance at their job.
  • More than 9 million open positions exist.
  • 66% of Gen Z & 73% of millennials say they will switch jobs to get more control.
  • More than 60% of both groups want to find new jobs for a chance to work remotely.
  • Search for remote jobs is up 460%


There are signs (literally) of how bad this is all over the country. Unfortunately, it seems to be worst for the service industry:

Desperate companies are resorting to paying people just to interview. Wild!

Some are unable to even stay open due to staff shortages.

And these aren’t your mom and pop operations. These are major corporations. If they’re having a hard time… that really doesn’t bode well for everyone else.

But what about specific examples in our industry? Check out the below post in the Photo Booth Network:

Browse through the comments and you’ll see… its a common issue. People are just not showing up to work.

It’s become a challenge just to find people to interview. Ryan and Laelia Lee from Fun Frame Photo were kind enough to share their experiences in the video clip below:

What does this all mean for you?

1. If you have employees, be prepared to have to fight to keep them. You’ll most likely have to compensate people more.

2. If you work with third parties (venues, vendors, event planners, etc), be prepared to deal with turnover. This is the part most people aren’t thinking about.

Not only can it be a logistical nuisance but if you have major sources of repeat business, and your point of contact is an employee (like an employee of a venue), the odds are that person is looking to leverage this labor market to get a better job. Which means you may be at risk at losing your “in” to that venue.

You should be proactive about protecting partnerships and relationships in the event that your main contact leaves for another job.

3. If you need to hire people… it’s going to be really tough. You’ll most likely have to compensate people more. But there also seems to be a trend where people want more control and flexibility. I’d lean into this as a major benefit that we can offer.

In the past, it used to be a negative that we could only offer gigs on the weekends. Now it may be a major positive. Emphasize it and use it to your advantage.

One other tip I’d give is to network and work with competitors in your area. If you are under staffed and having a hard time hiring, you can subcontract work out to other local booth companies.

It’s a win win. This is what I have personally been doing in the NY area. It’s worked so well for me that I’m not even bothering trying to hire people right now.

3. Supply Shortages


You’ve probably heard that media for the DNP DS620A printer is a little harder to come by.

The other major trend impacting companies all around the world are the supply chain disruptions. Some of this is actually due to not having enough truck drivers and/or workers at ports (which relates to the Labor Shortages we just discussed).

The backlog of cargo ships at Southern California ports reached an all time high. Economists expect shipping problems to linger well into 2022

Backlogs and elevated shipping costs are likely to persist at least through the middle of next year because no immediate solution for the underlying supply-demand imbalance at US ports is available,” Goldman economist Ronnie Walker said in a note to clients.

Nobody knows how to fix this. Shipping a container through major U.S. ports now takes triple the time it normally does. Ultimately, consumers will pay more and have access to less.

Do you buy any equipment or materials from overseas?

Does the place you buy things from source them from overseas? Chances are the answer is yes.

If you haven’t dealt with delays or price increases, you likely will. You should carefully manage your inventory ahead of the busy upcoming holiday season.

You Must Raise Your Prices

These three trends have made one thing abundantly clear to me:

You must raise your prices in order to survive.

This isn’t the typical advice from 2019 encouraging you to raise your rates in order to make more money.

I’m saying that if you don’t raise your rates… your business is in grave danger.

Inflation alone is increasing prices across the board and reducing the purchasing power of your revenue.

But once you layer in the labor shortages and supply shocks increasing the cost of labor and materials… raising your prices is no longer a luxury. It is an absolute necessity.

The positive here is that there has never been an environment in which it was easier to get away with raising your rates. Consumers have become conditioned to it and almost expect it.

The feedback I am getting from boothers around the world is how surprised they are with how little push back they have been getting from raising rates.

Our industry has historically suffered from a race to the bottom mentality.

Now is the time for us to race to the top.

Here’s some free content that may help you in your quest to raise prices:

Super Boothers Podcast Episodes:


On the bright side… Axios predicts that 2022 will see the most weddings since 1984.

 

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      Imagine this for a moment… you have a team, of let’s say 10 people. By the end of the year 5 or 6 may be gone.

      One out of every two employees is looking for a new job in the coming 12 months. Now, will they all do the actual move? Probably not. But will more than ever before? I think so.

      Employees across the country are in major migration. Check out these statistics:

      • In April, more than 4 million employees quit their jobs, another 4 million did in June.
      • 56% of Gen Z workers said they were unhappy with the work-life balance at their job.
      • More than 9 million open positions exist.
      • 66% of Gen Z & 73% of millennials say they will switch jobs to get more control.
      • More than 60% of both groups want to find new jobs for a chance to work remotely.
      • Search for remote jobs is up 460%


      There are signs (literally) of how bad this is all over the country. Unfortunately, it seems to be worst for the service industry: