Inflation is a critical economic factor that affects businesses in several ways. Essentially, it means the dollar (or whatever your currency is) is devaluing because much more is being pumped into the system. This translates into higher costs… for everything.
Of course, this has major ramifications for you and your family’s finances. If you’re interested in learning more about that angle, here’s a popular podcast explaining “Why Cash Is Trash… And What To Do About It.”
But here, we will focus on inflation’s impact on the photo booth business industry, which relies heavily on equipment, supplies, and labor to operate fully.
The Cost of Capturing Memories is Getting Pricier
As the general price level increases, the cost of photo booth essentials also increases. This means that photo booth business owners may need to spend more money on paper, ink, and other consumables. Expenses like gas for logistics go up as well.
These changes will have to reflect on your rate because profitability and sustainability is at risk.
Inflation = Labor Challenges
As the cost of living increases due to inflation, the wages of photo booth attendants may also need to increase to keep up. This leads to a higher payroll for your photo booth business.
It can also be challenging to retain trained photo booth attendants because they may look for other jobs that offer higher pay. Replacing them would require effort and additional training costs.
Ryan and Laelia Lee from Fun Frame Photo were kind enough to share their experiences in the video clip below:
Another scenario is inflation causing photo booth businesses to reduce workforce which may result in decreased productivity and revenue.
Booking clients amidst inflation
Changes in client behavior can occur due to inflation. As the cost of living increases, consumers may prioritize their spending differently, opting for cheaper options or resorting to none at all. This means that photo booth businesses may experience a decrease in demand for their service.
How can photo booth businesses survive inflation?
$1,000 today is not the same as $1,000 3 years ago.
You must raise your prices to survive.
This isn’t the typical advice from 2019 encouraging you to raise your rates to make more money. 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. Clients have become conditioned to it and almost expect it.
In contrast to the point earlier where clients may shy away from renting a photo booth, the feedback from others around the world is that they are surprised with how little pushback they have been getting from raising rates.
The photo booth industry has historically suffered from a race-to-the-bottom mentality. Now is the time for us to race to the top.
Here are some free content that may help you in your quest to raise prices:
Super Boothers Podcast Episodes:
- EP 202 – Increasing Pricing
- EP 402 – Updating Your Pricing
- EP 405 – Pricing Negotiations
- EP 412 – Pricing Survey Results!
In conclusion, inflation can have a significant impact on photo booth businesses, affecting their equipment and supply costs, labor costs, pricing, and consumer behavior. To mitigate the impact of inflation, photo booth businesses must adjust their rates accordingly. By doing so, photo booth businesses can remain competitive and still earn while providing high-quality services to their clients.
