Photography Business Startup on a Budget
We've already talked about the responsibilities of starting a creative business--Now let's break down the costs and figure out if you can swing it. And if so, how to swing it on a budget, and different budget options to consider.
We'll look at different expenses and then calculate taxes in, so hang with me.
Basic Expenses *(Yearly Recurring Expenses)
Business License/DBA: $50 (This could be less, but this is a good estimated. It all varies state to state) *Marketing Materials (Business Cards): $20 *Website Expenses (URL): $20
*Tax Filing Expenses (With TurboTax Business Option): $80 Basic Contracts (Portrait Photography Contract Template from thelawtog.com): $178 (price may be subject to change!)
Additional Costs: Editing Software: If you don't already have a professional editing program, this is something you'll definitely need to buy as well. You can buy an Adobe Lightroom subscription for $10 a month.
*Equipment Investment: If you don't have a whole lot of equipment, you'll probably need to start investing in more. On a small budget, I would say at the beginning plan on spending around at least $300 a year towards new equipment.
Total Basic Expenses: $348 Basic Expenses Plus Equipment Investment: $648 Basic Expenses Plus Lightroom: $487 Basic Expenses Plus Equipment Investment and Lightroom: $797
Recurring Yearly Expenses: $420
If you have this money ready in your pocket to spend, great. But if you want to have a successful business, you really want to make sure that it's paying for itself. So now we're going to calculate how much you have to make in order to pay for these expenses. With that, here comes the fun part... Taxes. When you make money, you have to pay the government a percentage of that and we're about to calculate that in.
People will give you different percentages, but I really like to play it on the safe side, so I put away 25% of what I make on every single job to pay for taxes. I usually get a nice tax return at the end of the year, but having wiggle room and getting money back from the IRS is a whole lot better than finding out at the end of the year that you owe the IRS.
For every $100 you make, you'll want to put away $25 of that to pay taxes. So for every $100 you make, you get $75. With is 3/4 With that in mind, let's do some calculations just to figure out how much we have to make just to cover the expense of starting a photography business. Each number I'll be dividing by 3, and then multiplying the result of that by 4. That will give me the amount I would need to make before taxes in order to cover my expenses and pay taxes.
So Total Basic Expenses would look like this: 348/3 = 116... 116x4= 464 So I would need to make $464 dollars pay 25% taxes, and then have $348 left to pay my expenses. Here's the rest of the numbers plus tax:
Basic Expenses Plus Equipment Investment: $864 Basic Expenses Plus Lightroom: $649 Basic Expenses Plus Equipment Investment and Lightroom: $1,062 Recurring Yearly Expenses: $560 So that's actually kind of cool when you look at it. At the very most, you only need to make $1000 in your first year to start up your photography business and break even. And then only $560 to keep it going. Not bad. And with a little more math, let's say you're charging $75 for an hour session (which is pretty cheap), you only need to book 14 photography sessions a year to pay for your $1000 startup. That's just over 1 a month--You can do that. So now you know how much you need to make to cover your basic costs--What about a profit? Head on over here!