Acme Photography: A Business Loan Proposal

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Cover Letter / Statement of Purpose

What follows in this report and walkthrough is an ordered and detailed business plan for the upcoming Acme Photography business venture. The amount of money to be borrowed, if approved by the lending institution, is $50,000. This will serve as Acme Photography’s initial startup investment costs as well as a cushion to keep the company solvent as it ramps up and becomes profitable. The term of the loan is drawn up as being ten years and the collateral for the loan will be the borrower’s home. Retirement accounts, the property bought for the firm and other assets can be used if the bank needs more assurances. As noted above, not all of the money will be spent upfront so it is not as if all of the money will be immediately exhausted.

The sections that follow will flesh out and enumerate the cohesive and exhaustive plan that is in place to make Acme as successful as it can be and should be given the amount of planning, expertise, and strategy that is being employed. Those sections, in order, shall be this section followed by a description of the business, a market analysis, a summary of competition, marketing strategy, the management plan, specific uses for the funds, and the financial data frameworks and applications that will be used to track everything. The financial data section will also include pro forma/projected statements of cash flow, an income statement and a balance sheet over the first year upon receipt of the loan as approve by A&B Lenders.

Description of Business

The photography business to be launched is a small family-based one and will be owned and operated the drafter of this report and the lone brother of the author of this report. Both the author and the brother have grown up learning and loving photography of all shapes, sizes and types and the siblings will be using the money to realize their dream and own a small business doing what they love. The business will rent and operate a small storefront business that specializes in portraits and packages along the same line as retail giant portrait studios but with a touch and quality that is often missing from the larger companies that have family portraits as part of their larger repertoire.

The storefront will have a customer service area where purchases and orders are rung up and finalized and in the back, there will be a photography studio where pictures are posed, arranged and taken. The storefront will be coupled and paired with an online website where people can check to see the wares that are offered, what the general prices ranges are, the types of backing and/or framing that can be used to add flair to prints that are order, the sizes that are available and examples of work done for prior clients. A customer portal will also be implemented so that customers can check on the status of their orders without actually having to call the office during business hours to find out the current status of their coming prints.

Basic orders will typically be done on-site but they do of course take time. More customized and detailed projects may require involvement of outside vendors and/or products that must be shipped to the studio to be used because there is not enough room to keep that much material in stock and/or the materials to be used are not used often enough to warrant an ongoing inventory. Obviously, the turnaround processing times and use of outside vendors will become less and less necessary as the business expands and has more room to cater to special orders and keep the proper items in storage. However, all great businesses and concepts have to start somewhere and the proprietors of the proposed Acme Photography business are well aware that it cannot (and should not) try to get too demanding and aggressive in such a nascent stage of the business.

The facility will be located in a small but prominent retail space on Main Street in Anywhere, CT. The studio is only about 700 square feet but it is more than big enough to have a studio area, a computer work area in the back and a front-facing customer service kiosk that allows for the service of customers as well as a place to show off samples and options for prospective buyers who want to silent browse rather than be verbally marketed to when they enter the store. The overall timetable for the implementation and starting of the business is really rather short. From the inception of the loan to the opening of the business is to take no more than 30 days and much of the work will be done in half the time, thus allowing perfections and final touches to be done before the store officially opens. This will allow advertising to be done early and thus announce the opening of the story and grand opening specials. Business should be brewing and ready to go on day one of the business.

Market Analysis

As noted elsewhere in this report, the photography market and the art of capturing memories are fading in many aspects. The first aspect that is clearly causing a fade in the photography market is the fading out of the film development portion whereby film is bought, used in a camera, and then developed at a store. Film is going the way of the dinosaur and a lot of the prints developed nowadays are done online and/or through file formats like JPG and so forth. Actual studios that develop film on-site are going away not unlike video rental stores like Blockbuster, which just shut its doors for good. There is the occasional Wolf Camera and companies like Kodak and Polaroid are hanging on (and that’s probably a stretch when referring to Polaroid), but only because they have diversified their portfolios or because they are winning by default much like Best Buy in the electronics superstore market after Circuit City faded into liquidation.

However, the niche that has and still is occupied by home-based and store-based photography studios is far from going away given that most people do not have the photo-shooting equipment and photo- and video-perfecting software skills like that for Adobe Photoshop, Adobe Illustrator and so forth. People that want quality prom pictures, senior portraits, and family photos are not going to do it on their own and will instead enlist the services of a professional. While the Wal-Mart’s and Sears photography studio locations dominate the playing field in terms of name recognition and service offerings, the regional players in each city are still going to be what people rely on when they want good pictures. Indeed, the overall photography market is still around $10 billion as of 2013 and while it is falling, it is falling very slowly going down only 2 percent from 2008 to 2013. The overall employment of photography studios and offerings is a scant 213,000 and that is based on a total business count of 153,595. As such, it is clear that most photo studios are one or two-person operations with larger operations being largely unnecessary or unsupportable by business demand and market saturation. It is probably more of the former than the latter. A photo studio does not require more than one or two people so long as the proper equipment, professionals, and software are in full force and use. Rather than trying to buck that trend or be an outlier in this regard, Acme Photography will fall into the industry standard and will place itself as an upper-crust photography studio in terms of value, quality, and service.

As will be broken out in the competition section, the main competitors are other “mom and pop” shops, retail giants like Wal-Mart that have a photo division and online stores that offer print production for a low cost. However, the only companies that directly offer what Acme will offer retail stores that have a portrait studio in their stores (e.g. Sears) and other mom and pop shops in the area that also have their own studios either in a retail space or a home. In other words, the direct competition will be local and will mostly (but not entirely) be locally operated while the indirect competition will be all over the place and will take on many forms. Pricing of services will be slightly more than average for retail outlets but very competitive with local outfits. The retail outlets do not offer the service and quality of truly skill photographers that are not clearly trying to operate based on quantity and not quality but Acme will clearly be superior in cost and outcome to the direct competition. Acme will allow customers to “opt-in” to product service offering emails rather than doing it for everyone that has an email on file and Acme will remain competitive by offering referral bonuses and coupons for prior customers who later come back for more services and photos. Acme will remain competitive by giving people the prints and warmness of a family-oriented feel rather than a corporate-ridden one while at the same time embracing the technologies and methodologies of the future. It is a blend of new and old and traditional versus cutting edge.


The general competition for the portrait industry is broken up into three major parts, those being the home-based operations, the small business storefront operations and the divisions of larger retailers that offer portrait options such as Wal-Mart and Sears. The local competition, as well as the online portfolio that Acme will be working against, is no different. The first of those three are people that do photography on the side or all of the time and have a home-based studio for prints such as senior portraits, family photos, baby photos and so forth. It is also quite common for other professional photographers and videographers to have home-based operations as an office for such professionals is usually not all that necessary. However, a studio of some sort is necessary for portrait providers like Acme, which makes either a home study or a storefront-based studio necessary.

The second iteration of photography studios as noted in the list above is the storefront option. This is the option that Acme takes on and this version is done instead of a home-based option for a number of reasons. First, many professionals like to keep a clear separation between home and business matters just out of personal preference. Second, it is a lot easier to demarcate business and personal operations for tax and other legal purposes when a person’s home and a person’s studio are entirely separate operations. Third, having a separate studio gives an air of professionalism and legitimacy that is simply not possible when a studio is a room in one’s house. Fourth, even if a studio storefront is in place, much of the work done on evenings and weekends can easily be done at home so the flexibility to operate in both places still exists. Fifth, it is a lot easier to be visible and available to customers when there is an actual store to go to. Sixth, doing advertising at one’s home is typically a non-starter unless the home is bought and used entirely for business purposes. This is not a completely unviable option as many businesses do exactly that in that they buy a home and use it for mostly, if not entirely, business purposes. This is something done quite a bit by real estate agents, lawyers, certified public accountants and so forth. However, this will not be done by Acme as the commercial foot traffic and car traffic will be much more suited to Acme and its reaching of customers if the business is in a commercial area rather than a residential one.

The third competition strain mentioned at the beginning of this section is that of the big box retail sector, stores like Wal-Mart, Sears, and so forth. A plus for Acme Photography and their outlook is that the luster and favor extended towards shopping malls and the associated “anchor” stores like Sears and Dillard’s and such are fading. However, those stores are often in strip malls or are free-standing so this dimension is only fleeting in its benefit. This is especially true of stores like Wal-Mart that are often free-standing most if not all of the time in certain markets. However, many of the traditional big-box photography stores are either going digital or they are dying as the advent of personal cell phones and other camera technology is allowing a lot of people to be their own photographer and developer. Home photo printers and on-demand photo development orders from places like Wal-Mart and online photography studios have made it extremely easy for people to get the prints they want, when they want them and in the form/medium desired.

However, even with the social and technological concerns being what they are, A&B Lenders should not be concerned that Acme will be filling a niche that is not desired as there is most certainly a demand for what Acme is offering and it will be offered at competitive prices and with great quality. Even with technology being what it is, parents are not doing their child’s senior portraits or anything else requiring a skilled photographer on their own. If senior pictures, new baby pictures or something else requiring precision and skill is required, a well-versed photographer and/or videographer is still what is preferred and demanded by a quality-conscious consumer. The big-box retailers cannot offer that and the home-based picture-shooters often do not have the standing, reputation or image to soothe the concerns of people that want great pictures taken with full customizability and on-site handling/taking of pictures if need be, something the big box retailers do not offer and something that most amateur or even professional photographers do not offer. The expertise and motivations of Acme and how the business will be positioned will take full advantage of all of these market conditions and consumer preferences. Acme will stand as a professional firm that offers great pictures for great prices while offering the customizability and preferences that big-box retailers will never offer.

The “big box” retailers with photo offerings have a superior price point while offering lower quality in a lot of ways, with service being the best example of this. The local “mom and pop” shops are hit and miss on quality as many of the players are true amateurs but the truly gifted owner/operators are artisans of their craft and that is certainly where the Acme partners will figure into the equation. Samples are provided for A&B Lender’s review. These samples typify a “usual” and “average” outcome for portraits and it is not an example of Acme doing its best only for this loan that is being applied for.

Marketing Strategy

As far as how the Acme Photography studio will be marketed, this will be done through three major techniques. First, the common mainstay of marketing through yellow page ads, both online and in print, will be engaged in but only a modest ad will be purchased in the print books. The reason for only a modest ad is that yellow pages, more and more, are being replaced and usurped by online directory sources. As such, dumping a lot of money into a dying advertising medium is less than wise. However, it shall not be abandoned, at least not yet, as many people that are traditional in nature and/or just simply eschew online media and advertising still do cling to the yellow pages as their source for finding a business to invest in. Being able to advertise with larger retailers is not going to happen for a variety of reasons but related but different “mom and pop” shops will advertise for little to nothing so long as Acme returns the favor in their own shop via leaflets and small posters.

The second main technique will be advertising through sites across the internet that offer advertising services or even a forum for people to offer their opinion about the service. Advertising on sites like the local newspaper’s online portal, Google and so forth is fairly cost-effective and beat out annoying email options that come off as “spam” as soon as they hit someone’s box. In addition, social networking and review sites like Yelp, Yahoo and such can be monitored and sour reviews can be responded to in good faith in case someone unfairly tries to slime Acme Studios. A prompt and polite reaction to a slanderous review is the best way to allay the concerns of other viewers and perhaps convince them the review is spiteful and unfair. However, if there is a remote amount of legitimacy to complaints offered, Acme will react by making that customer whole and fixing any applicable deficiencies so that future customers do not hold the same view.

The third and final technique that will be used to advertise for Acme is the fairly cheap yet cost-effective use of LED/digital billboards. These billboards locally run anywhere from $10 to $30 a day. The gist is that Acme’s ad would show once every 30 seconds or show. The ad is sharp and prominent but is not as expensive as a static billboard that would only show Acme. If a given billboard is near a stoplight, there is no need to use a fixed billboard as Acme’s offerings would show at least once per light cycle a lot of the time. In short, the trifecta of print, online and on the streets is the way Acme will get its name out.

Management Plan

The management plan of the Acme Photography studio will obviously not be all that complicated given that only two people will be involved and both are owners, those being the author of this proposal and the sibling. The spouses of the siblings will obviously have a financial interest in the ongoing operations and outcomes of the Acme studio but only the siblings will be involved in daily operations and/or will be making business decisions. The studio will be run as a “50/50” partnership between the two siblings and no decision regarding major issues such as location, business direction/management, product offerings, advertising decisions and so forth will be made unless both partners are in agreement about the decision. Only the two siblings are slated to be partners at any point in the foreseeable future and that will only ever change if business needs or opportunities justify it as having more than two partners would be potentially messy or even complicating. It is viewed as much more advantageous by the siblings to keep things simple and limited to the two of us and that is in line with the industry at the local, state and national levels in all respects.

The need to hire, train, retain and manage any other employees is simply not necessary. Any concern about not having someone on staff that can help during business hours is mitigated by the fact that both siblings running the business are trained in any and all needed aspects so either sibling can do photography shoots, talk to the customer, do the needed retouching of photos, or go on-site to customer sites or venues if/when that becomes necessary. There is a strong chance that an employee or two will need to be hired at some point if the Acme business expands in a way that is envisioned and projected. However, this will be done only if and when necessary as hiring and training employees is a dimension that should not be entered lightly. However, all managerial control and function will remain with the siblings at all times and with no exception. Except for the unlikely future need of another partner, all future people involved in the firm will be employees and all final decisions will remain with the sibling ownership. The siblings have agreed that if either sibling divests from the business, the ownership stake will be offered first to the other sibling and to no one else including spouses and other immediate family. The two siblings have each been working and/or just playing with photography all of their lives and have honed their craft as adults under their tutelage of their father who has been a professional photographer with his own studio for years. The organizational chart for Acme will be so simple that drawing it up is really not necessary, as it would have the two siblings on the same level and with the same power, as both are owner/operators. There will be no other employees for at least the near future and only when business levels demand and allow for it. The siblings are starting the business as a partnership in large part because payment of salaries is not necessary. Profits will simply be split down the middle until the business is viable enough for a salary to be paid and this will likely be when the business is converted to a Subchapter S corporation. S-Corps are required to pay a salary to all employees including owners and this is simply not needed at this time and Acme does not want or need unneeded IRS and tax attention.

Specific Use of Funds

The sibling partners on this project will infuse their own startup cash of $20,000 as well as roughly $20,000 more in computers, cameras, props, fixtures, and other equipment, as noted in the startup discussion and summary. The only new expenditures that really need to be added are retail space, finishing touches for the same and advertising. The rest of the pieces including personnel and equipment are already present and not much else is needed. As noted before, much of the start-up loan will be used as a cushion to fund losses that will certainly occur in the first few months as the Acme business goes from a fledgling retail studio to a profitable business. Much of the equipment, software, and materials to be used are either ad-hoc and will be funded by each individual sale or are already owned by one of the siblings already. The siblings will be investing a large amount of personal property and resources into the business including computers, software, picture backdrops, photo props, fixtures, desks, computer peripherals (e.g. scanners, etc.), cameras, camera lenses, photo paper stock, photo printers and so forth.

Indeed, the major initial outlays will only pertain to the rental of the retail space, the decoration, and arrangement of the retail space, rent for the retail space and a few odds and ends to fill in what will be needed for the retail store. Once those initial outlays are done, which should be a couple of thousand dollars tops, the studio will then execute its advertising goals and thus get people in the front door. As long as the advertising is effective, ongoing business should pay for the location outlays fairly quickly and perhaps a lot of the loan garnered from A&B can be paid back quite immediately. However, Acme will not do this until the business is secure and self-sufficient and the siblings know full well that this could take some time given that word of mouth and customer relationships take some time to build even with the pre-established customer base that the siblings already have.

Once the business is up and running and self-sufficient, a money-based independently of what is owed back to A&B Lending will be established and once that money is secure and in place, A&B will be paid back early. Acme does not plan on using any debt sources above and beyond this initial outlay and aims to pay for everything in cash once the business is self-sufficient. Once the business is self-sufficient and A&B is paid back, the plan is to have no debt whatsoever until/unless vast expansions or changes are made such as a new location, updated camera/computer equipment and other similar major investments that call for a loan rather than sinking all cash flow into the new venture and thus exposing Acme to financial shock much more easily and quickly if/when things happen to go wrong.

Financial Data & Applications

Before covering what will be used from a financial data, service and application solution, it should be mentioned what will not be used and/or is not necessary. A comprehensive payroll and human resources outsourcer or internal solution like ADP, Paychex or anything else of the sort is not needed and probably will not be even if/when one or more employee is hired for the firm. If anything, the existing CPA of the sibling partners would be used to do the tax filings, including unemployment payroll tax filings, for the siblings and any applicable employees. The siblings might very well form an S-Corporation to handle liability and ownership concerns, but that is not deemed to be necessary at this time but will probably be addressed internally with the siblings within the next year or so. Any changes would be for tax handling and legal concern reasons and not because of sibling ownership squabbles. To put a fine point on what the above is leading to, a QuickBooks-driven tracking system is really all that is needed and payroll/tax options can be added to that software if/when it becomes necessary. Any gaps along the way will be covered by the CPA who is given full disclosure of the business’s status.

(Source of Funds Statement, Cash Flow, Income, and Balance Sheet Figuresomitted for preview. Available via download)

Works Cited

Abrams, Rhonda M. Successful Business Plan: Secrets & Strategies. 5th ed. Palo Alto, Calif.: The Planning Shop, 2010.

IBIS. "Photography in the US: Market Research Report." Photography in the US Market Research. N.p., n.d. 1 Dec. 2013,

QuickBooks. "Easy Accounting Software." Accounting Software for Small Business. N.p., 1 Dec. 2013. 1 Dec. 2013, <

(Appendices A and B omitted for preview. Available via download)