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BarnofTerror Noblesville
05-08-2012, 08:40 PM
Long story short I have been running and financing a haunted house called Barn Of Terror in Noblesville for the past 4 years now. We hit up to 2000 visitors last year. I now have a few buddies that want to put a little money into helping finance the haunted house but I dont know a good way to then split the money 3 ways when we are done. last year I put $2000 into it and made $4500 out of it. But this year we are running more prime nights so i am estimating we can get almost double the visitors. I dont know how much the other two want to put in, but how would i end up splitting the profit? any suggestions would help THANKS

~BOT

Allen H
05-08-2012, 09:36 PM
My advice is to not split it. Do you need a partner? can you afford to finance the haunt yourself?
Perhaps their is another aspect they can invest in like concessions or parking? If you need help get it- if you do not then do not.
If you do split it then agree on an amount each will put in and divide the profit up by the same percentage. you put in another $2000- then they each put in $2000 then you would each get 33.333% of the profit.

BrotherMysterio
05-08-2012, 11:59 PM
last year I put $2000 into it and made $4500 out of it. this year we are running more prime nights so i am estimating we can get almost double the visitors.

First question (and this is important) . . .

After having spent $2000, did you gross $6500 and net $4500, or did you gross $4500 and net $2500? That distinction would be very helpful in answering your question.

Suffice to say for now, however, no matter how you look at it the numbers don't add up. :(

Assume the best case scenario, that you grossed $6500 last season, making $4500 net, after having recouped the $2000 you spent. And let's assume you are still potentially doubling that money next season, netting $9000, by bringing on these 2 partners.

Well, if bringing on 2 partners helps you double your money next season, then instead of $4500 "split one way", so to speak, you'll instead have $9000 split three ways, giving you $3000 each.

So, you managed to double your attendance while at the same time cutting your profits by a third, going from a cool $4500 down to the more tepid $3000.

If we go with the other scenario, with you (and/or your potential partners) investing $2000 and only grossing $4500, leaving a $2500 net, then you would instead have all three partners investing some $6000 total, grossing $9000, netting $3000, which would mean only $1000 for each partner.

Now, would your new partners be silent partners; or are they going to be working on the haunt as well - a veritable band of brothers - swinging a hammer in the trenches along side you? If the latter, then unless they are total nuts-out haunt enthusiasts, they are probably going to be wondering why they spent all those countless hours working on this awesome haunt, only to get paid something like minimum wage after you divide their $1000 between the countless hours they spent.

Another factor to consider is this: Are you starting the ledger at zero, with each of you contributing an even $2000, or whathaveyou, and then splitting the net three ways, or are you factoring in all your personal past work, and the actual value of the haunt, as an example of your prior investment? Iow, if the Haunt represents, say, $2000 worth of invested value, you are investing an additional $2000 of value in cash, for a sum total of $4000 of invested value, and then your two partners invest their combined $4000, then technically, aren't you equal with them, and deserve not a third but a half of the net?

After all, it was you and not them who built it into what it is now. Doesn't that count for something?

*****

Now, interestingly enough, I get the sense from your question that perhaps bringing on the two partners might not actually be key to doubling attendance for next season, but that the two factors are indeed incidental, so you might stand to make and keep the $9000 for yourself by making the improvements yourself. If so, what was the main reason for bringing them on? Was it financial, as your question somewhat suggested, or was it just because you wanted to work with your friends, which admittedly is an enticing reason in many cases.

Before you ever go into business with your friends, these are usually good questions to have answered, at least for the sake of clarified expectations and for the sake of not damaging important relationships.

In that regard, Allen is right. If they want to get in on the act, they might do well to provide some sort of auxiliary value that works for everyone's benefit and improves everyone's bottom line, such as concessions or parking.

This would also allow you to see what kind of workers they actually are, and how entrepreneurial they are, which can help inform your decision on a more equitable partnership arrangement next year.

C.

Frightener
05-09-2012, 07:09 AM
I'd like to put in my few cents worth. First off, I've been paying close attention to Brothermysterio and he's actually helped me out quite a bit. He makes a lot of sense. My thing is this, I have 2 partners. One being my wife, the other being my brother. My brother and I have done business before and only ever had one problem, which is a disagreement that will always stand, and it's under the bridge. My brother is helping with labor. He's disabled and really shouldn't be helping me as much as he has been, but he's a big s.o.b. so i think I'll let him do wtf he wants lol. He doesn't want money, at least not now. His best interest is what's good for the haunt.

My wife? Well forget her, she's got dishes to do! I'M PLAYIN! lol, but seriously, we can't consider her a partner. With that said, I have an investor that is interested in helping me as well, but so far, it's all me. We're selling our lan... SOLD our land (closing tomorrow in fact) and also selling our 67 Camaro SS and investing everything into this haunt. If all this does is pay for rent, WE'RE GOLDEN! We have a house onsite, and an apartment in the building. So if rent's paid, and utilities are paid, and we can make most of our props... YTF NOT do this?

Had I had a real partner, buddy or not, that's investing thousands, and going to want a return quickly, I'd have to say no. I did an investment with my airbrushing and expected to get my investor a return inside of a year. I'm having trouble keeping it going due to many reasons and he's understanding of the situation. So now we're shifting gears to the haunt. It's less stressful than me trying to do 300 shirts in 10 hours with CTS and nerve damage in my elbow, not considering the 2 bad discs I have in my back that's JUST NOW getting managable.

If your friends are wanting to invest and build the haunt up BEFORE trying to reap profits, I'd say go for it. If they're wanting to make quick cash, tell them this isn't the scheme for them! It's NOT a scheme! They have to understand this. I just had my 2nd quote for sprinkler systems. After being gauranteed no more than $20k for our system, he came back and said they forgot something and can't keep their word, they did however say that they would do so and so for free, which is worth a few grand, but still... they're new quote? $37,000!!!! And that's NOT even getting the 4 inch pipe to the building, which can cost 10's of thousands.


Just be sure to let your friends know this... "Make no mistake, this is NOT a get rich quick scheme. To do anything, is worth doing right. " if they want to invest their lives into it, great, I'd say work something out, but only you know your investors, we don't. If they sound like they want a quick buck, turn them down.

This is only my opinion. My background story, I felt is worth mentioning to let you know the situation I'm in. It may not help, but here's just another view from the field and sideline.

Good luck to you and keep it up!

BarnofTerror Noblesville
05-09-2012, 10:45 AM
Thank you to all 3 of your responses. I am very pleased to get a quick response and a new perspective on this. I did net $4500. But I see with the numbers you crunched for me (THANK YOU) it would not be wise to bring on 2 extra people but maybe only 1 extra person. The only reason I had this thought was to bring more money to start with to the table aka get newer better stuff! The one that is really interested in helping out has a passion like me for the haunt not to just make money. That might be the person I go with. Once again thank you all!!


~BOT

HauntedPaws
05-09-2012, 10:53 AM
If only one person what do they bring to the table beside money? For that low amount try just getting a bank line of credit then you retain full control and full profits as you grow and the bank only wants the principal back to be happy.

BarnofTerror Noblesville
05-09-2012, 10:57 AM
If only one person what do they bring to the table beside money? For that low amount try just getting a bank line of credit then you retain full control and full profits as you grow and the bank only wants the principal back to be happy.


They are wanting to help with the building/running/clean up. Which since I have done it all myself with a few help from volunteers every now and then, it will be nice to have another solid person dedicated to it. And i would think he will put 110% in esp if he has money ridding on it right?

BrotherMysterio
05-09-2012, 01:13 PM
did net $4500. But I see with the numbers you crunched for me (THANK YOU)

Glad to be of service.


get newer better stuff!

Longer response forthcoming, but before you go down the "newer, bigger, better stuff" road, make absolutely sure that your Haunt doesn't need, first and foremost, The $4 Fix.

Better to risk $4 on a brand new, bigger, better Haunt, than $4000.

C.

Frightener
05-09-2012, 01:41 PM
May I ask, how many nights did you run? What was your door price?

BarnofTerror Noblesville
05-09-2012, 06:33 PM
May I ask, how many nights did you run? What was your door price?

We only ran 26th - 31st. But i had more business on sat than i did on wed thur sun combined. So this year we are running on prime nights FRI SAT Oct12-13, Oct 19-20, Oct 25-27 (25th kids night) then Oct 31 so 8 nights. We did $5 per ticket last year it was a haunted barn plus hayride. Barn lasted about ten mins hayride about fifteen min. BUt we made 6 people wet their pants so it was pretty scary :)

~Ryan

BrotherMysterio
05-09-2012, 07:06 PM
We only ran 26th - 31st. But i had more business on sat than i did on wed thur sun combined. So this year we are running on prime nights FRI SAT Oct12-13, Oct 19-20, Oct 25-27 (25th kids night) then Oct 31 so 8 nights. We did $5 per ticket last year it was a haunted barn plus hayride. Barn lasted about ten mins hayride about fifteen min. But we made 6 people wet their pants so it was pretty scary

~Ryan

Eh, wait, what!?!

:shock::shock::shock::shock:

DUDE!! DON'T SPEND ANOTHER DIME! DON'T TAKE ON ANY PARTNERS! HOLD THE PHONE, JACK!!

Jeeze-frickin'-Louise!! Do you have any freaking clue how grossly undervalued your attraction was!?!

If you netted $4500 after a $2000 recoup, then that means you grossed about $6500. At $5 a ticket, that's like an attendance of 1300 patrons in just six days! 2/3rds of that or more was probably from either Fri & Sat, with some help from Halloween itself.

Iow, you probably had close to 1000 patrons from just the weekend.

Okay, understand, the usual rule of thumb for a haunt in terms of what to charge in ticket prices is about $1 a minute, assuming all other factors are competently executed. The Barn attraction was about 10 min. and the Hayride was 15 min. That's 25 min. of showtime, total. In most markets, you could reasonably charge $25 for that, plus on busy nights do a speed-pass upcharge (plus unlimited admissions) for $5-$8 more dollars if the line runs longer than 30 minutes to an hour.

So, compare that potential $25-$33 to the $5 you actually charged! You were only getting 1/5th to 1/6th in ticket sales for what you guys were really worth.

Also, you were only operating on 6 nights, and not the busiest either. Fri, Sat, Sun, and Mon (being Halloween) pretty much had it. It doesn't hurt to be open on Wed. or Thurs. if the traffic makes it worth it, but, jeez man!, we thought you were talking about a full season. For some pro-haunts, they can be open upwards of 25 nights. Mind you, that kind of schedule is not for everybody, but you were only open for a mere fraction of that. I think the fact that you guys are planning on opening for those additional nights will make a huge difference.

Also, if people are wetting their pants, then there's nothing wrong with your show! At all! And you don't need to buy any bigger, better stuff! And I highly recommend you don't! Don't spend another dime! Just focus on making sure the show is solid on the front end, adjust your ticket prices accordingly, just work on getting the word out, and then see what your results are.

Now, naturally, the last thing you want to do is go from charging $5 one year, to $25 the next. The quality of your show may not be able to support that kind of jump just yet, and even if it did, that would still be a major shock to the audience that you are already cultivating. Instead, you might want to creep the price up gradually, and see what works. Greg and Allen would probably be more confident in giving you more insight in that department. I don't know your market, and I wouldn't feel confident unless I've seen actual pics from your show so I know what you are actually doing with it, but, still, I don't think $7-$8 instead of $5 would be out of the question, and possibly $10 on busier nights, as you approach Halloween.

More to come, but seriously, don't go blowing any more dough on this, or taking on partners, until you get these sorts of things sorted out. This sort of thing falls under the category of The $4 Fix.

C.

Skeered
05-09-2012, 07:24 PM
You started the haunt and presume you have control over the location? If they put in equal dollars and labor doesn't not automatically guarantee them equal profits. You get more just for carrying more risk of having the location. A partner working on a verbal agreement can disappear in a flash if something goes south.

Sometimes a person will argue that if they put in 3k and your putting in 2k then they ought to get 60% of the profits. Tell that person that your charging the haunt rent at 30% of the profits. Then after that you split whats left over at 60/40.

Allen H
05-09-2012, 09:40 PM
Make your own newer better stuff!
http://www.youtube.com/user/StiltbeastStudios?feature=mhee

And please dont borrow from the bank for your haunt.

BarnofTerror Noblesville
05-11-2012, 11:52 AM
Also, if people are wetting their pants, then there's nothing wrong with your show! At all! And you don't need to buy any bigger, better stuff! And I highly recommend you don't! Don't spend another dime! Just focus on making sure the show is solid on the front end, adjust your ticket prices accordingly, just work on getting the word out, and then see what your results are.

The $4 Fix.

C.

There is the wording the little guy in the back of my head was saying but I thought I would out price myself and thought I needed more money to put into it. Thank you for helping me, I think I know what direction to take and I am SO SO glad I found these chat forums. I hope someday I can get on the level of the Pro haunts.

~Ryan

BrotherMysterio
05-11-2012, 02:20 PM
I hope someday I can get on the level of the Pro haunts.

Well, you're halfway there if you are making people wet their pants and are turning a profit doing it.

That being said, I have one question: do you operate as a pro-haunt, selling tickets to your show as if you were a regular attraction; or do you operate as a home-haunt, throwing all this together in your backyard (barnyard?) each year, doing this for fun, and taking $5 "love donations"? Either way is fine, but it would help to know what your particular approach has been thus far.

Also, any pics? (Ah, found them!)

C.

Greg Chrise
05-11-2012, 05:17 PM
Like Allen suggested there are other things that other people can "invest in" or create and run that might actually add to how desireable it is to come out of the house to your event. I would keep those added things seperate from what you have already achieved. For example it sounds like there might be room for an outdoor trail and this could be another $5 of which you need to harvest 20% or 30% of as a landlord or 50% as an active partner in only that aspect of what is added on.

The $5 bothers me. It says you are catering to the poor people who have no money in your mind. Unfortunately people with no money are by definition not customers. At $5 it says you have no real value and it isn't worth seeing. Maybe all kiddy stuff and unfortunitely the real market where people have money, will travel and carry $100 a month cell phones to call others to join them are ages 25 to 35.

There is nothing wrong with a community event or a family event and someone has to do it but routinely coming up with money from such a thing will never happen. This might be entirely successful and desireable to you as a side deal. The trouble comes in even using the word investment. It is more like the additional people coming in are sponsors of the addtional trail or additional concessions. They may break even or even have those things cost them money and be thought of in the community as a real swell guy. Nothing wrong with that. If you want it to turn a buck is a different mentality, a different customer, a different price point.

Greg Chrise
05-11-2012, 05:37 PM
So, trying to put my thing together, the next add on is something that appeals to older age groups, is percieved of as higher quality that those people would enjoy. If there are 2 ready to jump into this, perhaps it is one this next year and another a few years from now. Added only as the customer base changes, grows and actually begins to pay something. In any case neither of the added people are true investors unless they compensate you for all the years, the land payments you have made thus far. Then they are entitled to say an equal split of the proceeds. Say someone comes up with $25,000 and a portion of that goes to high quality videos that will appeal to a wider group, then maybe they are the man. Only then have they perhaps quickly matched what you have done so far to attract so many people.

You are not seeing enough people to actually make a profit from concessions or sale of small things. Just a reality of having to overstock items and taking years to compensate for any cookers purchased. You should still have these things but not consider them "going to make a fortune" add ons, more like customer ammenities. We allow you to drink something and go pee in the provided facilities. Otherwise we just scare the pee out of you.

You must also plan defensively. What if this new guy has two years from now some different responcibilities and can not continue. Who is going to jump in and run all the things he has created, all the add ons need to be attended and are expected from the customers from year to year. So you only advance at a pace that you can handle what is there or know you have someone that can fill in seamlessly. Maybe there is only one additional add on attraction and it ends up taking 40 people to keep it operating for the next 15 years. The customers though never saw a change in quality or enjoyment.

austind
05-11-2012, 08:00 PM
Ok here is the way I do things, I have partners but they are investors only. They put in a certain amount of money and I agree to repay that money over a certain time frame. ( 3 years ). I make payments over the three years, that are very reasonable plus a small percentage of net profits. Some times the investment is not monetary, it is services and products. This way I don't have the monkey of a loan to make payments on and I still retain the control that I need. I had a business with 2 other guys once and it was like a 3 headed monster. Just imagine one person being a risk taker, one conservative, and last is washy washy. It was no fun and when it come to a haunted house, one person needs to be the buck stops here guy and hold the ship on course. I hope that helps you out.

AD

BrotherMysterio
05-11-2012, 08:59 PM
Just imagine one person being a risk taker, one conservative, and last is washy washy. It was no fun and when it come to a haunted house, one person needs to be the buck stops here guy and hold the ship on course.

I've seen situations like that, where, one in particular, the largest investor of this particular haunt actually hated haunts, never been to one, never wanted to go to one, but was in fact a hooker who was trying to get out of hooking, and needed a legit business to try and earn an income from. (Of course, I learned this late in the game.) As the house of cards started to crumble in and and implode on itself, the hooker took it upon herself to disregard the entire creative team and retheme the entire attraction herself - as if she actually had a clue how to do it - along with some sympathetic shmoe she picked up along the way who we never even saw before.

Believe me, after having had a crazy but positive night, finishing it a bit more on top than on the bottom, and leaving only having a small, very doable to-do list for the next morning . . . just imagine coming in the next morning only to be rudely awakened and introduced to this sudden changing of the guard. I walked in and everything was totally f'ed up, and I'm all like "WTF!?!", so I walk into the office to talk to the mananging partner, only to find that she had packed up and left in disgust, and there sat the hooker (non-managing, but greater than 51% investment), with some guy being her mouth-piece, starting to talk about the kiddie haunt (we didn't have one) and all these new ideas we would be trying, and I'm thinking "right . . . and, who the hell are you!?!"

And these changes were to come mere days before Halloween weekend.

That was definitely a teachable moment. I learned a helluvalot in that short 10 minute time frame.

C.

Greg Chrise
05-12-2012, 02:03 PM
I have used my haunted satelites and internet skills to see what your location looks like. It has the potential to draw from Indianapolis with advertising that isn't too much and be hovering at 7500 to 10,000 people no problem. If there is indeed something to come see built over time.

This is similar to ones I have advised and they see 4,000 or 7500 right out of the box. Over time your core actors will get older and with them your customers will be of that mature 25 to 35 age group. It isn't anything that might happen fast with very little money per year invested.

Now how the place is laid out is the key. You will want to begin building actual haunts and phase out the hay ride. It takes about 18 acres to do a great hayride and some trees to keep what is happening over there out of sight. Plus with more customers the expense and wear and tear on equipment doesn't add up.

The way to think about getting bigger is how ever many haunts or trails type events can be fashioned can be others who are thought more like they are vendors with their haunt on your property getting paid directly out of the ticket sales. Some deposit is put up front and matched in funding to do some minimal advertising on radio, fliers and web sites. Somewhere between $3,000 to $10,000 gets spent per year on advertising as it progresses. The ticket price has to start out at around 15 and build up to $20 over the years. Then you have something that over time, everything is pretty much there and paid for and bringing in $200,000 per year.

The proximity of track homes might be a problem and solid wood fences will be needed for sound control. It is a long process to build a haunt, see the customers appreciate it, talk about it and spread the word and build up what is happening there.

The only thing I don't know is if this would impact your normal farm type activities or what happens there the rest of the year. These things can be done for $2,000 per year to start but at some point there will be proceeds that can be reinvested to take things to the next level. At those kind of limited spending amounts it will limit how many are truely fascinated with your accomplishments. Again there is nothing wrong with that and having a good time but it is the difference between enjoying the company of kids having a great time or turning it into a yearly or seasonal salary for many people.

Unfortunately the people that come to a free haunt or a $5 haunt are not the same as the people that come to a $20 haunt. Those customers will not be your future customers or in a very small percentage. At the present time though, you are using an awful lot of resources that if you had to pay for tractors and such would cost $10,000 and you are only making $6500. If you had to rent the barn and property it would be another 3 months at $8,000 a month. To properly be compensated for what is being used the entire project needs to net $25000 after the smoke clears or you are just running things into the ground that will eventually ruin it for you somehow.

An analogy would be, I can buy a $1200 truck and drive it for 3 to 8 years but no one really thinks I'm cool. I am able to tell customers it is a work truck and gets destroyed spraying things and carrying cement products and it would make me crazy to ruin a nice truck, plus, do they want me to put the money into their particular project or make car payments. But still no one really thinks I'm cool. I get every job I want because any competitor running a crew cab duelly deisel is now looked upon as they are paying for that extravegance. And all those customers know how much that costs because that is what they drive. Should some one working for you be charging more money than you make per hour or less.

The under 35 consumer has no idea how much things cost or what it takes to earn those things and therefore just expects they should automatically have that stuff. They will spend any amount of money for entertainment if they think they might also have learned what it takes to have nice stuff. Or have a lot of stuff. It is totally oblivious to figure out it was accumulated over a great period of time at $2,000 or $4,000 per year. Chosen for what would possibly last for years and have an end look. But, what you invest in things financially is sort of what you feel the real market for being compensated for it is. I know exactly what my market pays because I have been in it for 20 years and everything is budgeted accordingly. In the bottom line there is still lots of physical work that can only be done at a certain pace. More people might help but if the market isn't really developed, they are just taking your wages and you have given away the business.

The $2,000 guy might have all the passion in the world but your property and market potential really needs $25,000 guys. At the lower level where only 1300 people show up, adding more is difficult and may not change that only 1300 people show up every year. This is why I'm going with car prices. What do you expect out of your car. Same thing as what do you expect out of your business. The property has some kind of value in all of this. A resource worth so much if it was something you had to lease. So the multiple haunts, concessions, side show vendors all become more like a storage garage business plan. A haunted mini mall where every booth or 3,000 SF event adds dollar value to what the end ticket price is. If it was $20 and there was enough stuff to justify $20 people would be all hyped up to come spend an evening from the big city.

SO there is some other way to think about how the evolution takes place. You continue as you are and perhaps in 15 years you are built up to 8,000 people or you get to that level much sooner. Maybe it takes 8 vendors with $2,000 each to feed the machine. There has to be something to come see and that end picture is what you base who you take on not neccessarily here is the dollar figure. Now what the end vision is, becomes a choice. If at some point the $25000 guys show up everyone that had been there for years and years will pull out on you as they feel like they have been replaced with something they can't match. The overall vibe of the place isn't as exuberant. So what it looks like, either limited and possibly all that happened is the place is all trashed from doing all of this and it was lots of work to have lots of fun versus you built the Coachella event and on a plot of land the same size and layout as yours had 70 bands and 30,000 people paid $300 per ticket Plus $100 per side party to be there for 3 days. And sponsors paid for everything it cost to do the event just to have their banner up here and there. My calculator hurts realizing that Coachella is a 10 million dollar weekend. Plus residuals of all the videos generated from the event.

It doesn't matter if it is Palm Springs or Nobelsville Indiana. It is just a plot of land and how someone promoted what could be done there. Only to get to palm springs you have to drive through the desert of fly in.

Think about how these traveling carnivals bring the stuff and in one weekend see 5,000 to 10,000 or more in any medium sized town and get every one to drop $20 to $50. Then imagine how every add on at your event is a seperate reason to announce to the world what will be at your event. Each vendor is doing their own bit of promoting and you too are promoting even on totally free social networks and somehow it all comes together. It is tough to put a dollar figure and look at it like a hard cold not enough money. There are a lot of guys on here that could take that $2,000 and make it into 500 very extravegant props that only cost $4 each. It is al how it is applied. How long it takes and keeping the money in the end because you have resources that must be maintained or it can't continue or getting bigger will tear things up beyond repair.

But, I'm sorry if all of that is in someone's haunt book I haven't read or seminar I haven't attended.

BarnofTerror Noblesville
05-14-2012, 05:55 AM
Well, you're halfway there if you are making people wet their pants and are turning a profit doing it.

That being said, I have one question: do you operate as a pro-haunt, selling tickets to your show as if you were a regular attraction; or do you operate as a home-haunt, throwing all this together in your backyard (barnyard?) each year, doing this for fun, and taking $5 "love donations"? Either way is fine, but it would help to know what your particular approach has been thus far.

Also, any pics? (Ah, found them!)

C.


The pics I have on my webpage are from our first and second year when we were just a barnyard haunt small hey a few people showed up yay haunt. But this last year we stepped it up to I would say semi-pro haunt. We did movie killers, had many rooms that actually looked like a living room with michael myers coming from the curtians and the ring girl coming out of the TV. Then our hayride was expanded from 5 min ride to 15 min ride last year. We did not get as good of photos from 2011 but this year I have a person doing that and that is all they are doing is video and photos for 2012. We sold and will sell tickets again this year to our haunt. What makes us a little different we always do a theme each year and change it year to year. And you get scared because of something that fits in with that theme, not just a jump out around a corner and scare you kind of place.

~Ryan

BrotherMysterio
05-14-2012, 09:47 AM
We did not get as good of photos from 2011

Did you get any photos at all?

C.