The 3 Month Plan to Start a Photography Business
Disclaimer: This is my personal opinion and experience, and is not to be taken for legal advice.
In case you haven't heard, we talked about the responsibilities of starting a creative business. But now let's unpack that list and start working on it.
I would highly recommend along with being prepared to own those responsibilities, you've found your niche, and have a powerful portfolio.
1. Determine if You Can Afford to Start Your Business
These two articles about the minimum costs of running a photography business, and how to determine if it will be profitable are a great start to look at your numbers. You want to make sure that you can at least break even with your business at the end of the first year.
And by afford I don't mean put your expenses on a credit card that you don't pay off until you have your profits at the end of the year. If you need to use your personal money to get started, and then pay yourself back, that's great. But with a business that really doesn't have a whole lot of start up costs if you're careful, please, please don't go into even a tiny bit of debt over it.
2. Determine Your Pricing Structure
After you've figured out how much you need to make, figure out how much you need to be charging. I personally tend to start on the lower side, as you can always raise your prices, and having to lower prices looks bad for your business. However, make sure you aren't underpricing yourself either. You've got to be able to afford what you do. Take into consideration your experience, and the quality of product you will be delivering to your client.
3. Determine Your Business Structure
Determine your business structure. Starting out the easiest route is sole proprietorship. And a sole proprietorship is automatically formed in the eyes of the government when you start doing business. In the long run, you'll probably want to "upgrade" your business formation, but this isn't a bad way to start, especially when you are picking and choosing who you work with and avoiding potentially crazy customers.
4. Go Out and Get Your DBA and Business License
DBA stands for "Doing Business As" You need one for your business name in order to legally conduct business under that name. Registration is pretty easy though, go out and google wherever your local County Clerk's office is, and what the hours are, and show up. All you have to do is tell them you want to register for a DBA and they will walk you through the paperwork (usually only a page or so), you'll pay for it (Usually no more than $30-$40 bucks) and you'll be sent a copy of the official paperwork in the mail.
Some states require an additional business license (although if you don't actually have an official business location like a studio, this is less likely) but your Country Clerk should be able to tell you exactly what you'll need and where to file it, if it isn't right there.
I dreaded taking this step when starting my business and then laughed afterwards when I realized how easy it was.
5. Put Contracts Into Place
Once you've got your business DBA registered, it is time to get your contracts in order (since the DBA name is what will go on the contract).
Contracts help protect you and your business from crazy lawsuits. This is ESPECIALLY important if you're going to be starting out as a sole proprietor (which most of us youngtogs do) because essentially you and your business will be one and the same and if you do have a crazy lawsuit people may not only go after your business assets, but your personal assets as well. Ouch.
You can lone ranger it if you want to, but I would highly suggest at least buying a contract template from thelawtog.com The mini bundles aren't cheap, but they are A LOT more affordable than a lawyer. And on a side note, ideally someday, you'll get a lawyer. But I know you're probably not there yet.
If you aren't sold on getting your contracts together, read this article about the 7 Reasons why you need a contract and deposit.
6. Register For a Sales Tax Permit
Once you have your DBA, you are ready to get your Sales Tax Permit. In more and more states photographers have to charge sales tax, even if the client is just paying for digital files and not a tangible product. You'll have to look up your states rules and regs on this, to do so I would google, "Photography Sales Tax [YOUR STATE]". Thankfully there are a lot of articles out on this for each state. If it is determined that you will be required to collect sales tax, then google, "Applying for Sales Tax Permit in [YOUR STATE]" you should be able to easily find a state run website where you can create and account and apply for a free sales tax permit for your business. Usually in two or three weeks you will get the official paperwork in the mail.
Then every quarter you'll log back in the same website, and pay the amount of sales tax you have to collect.
7. Put Together Professional Website
If you don't already have one, you need a professional website to go with your professional business. These days business websites are very much like the storefront of a business. They attract (or repel) buyers/client interest.
8. Create a Record Keeping System
You will need to keep records of:
Receipts from Business Expenses
Sales Tax You've Submitted
Estimated Tax Payments
Personally I have a large excel spreadsheet with a page each for clients and their information, business expenses that count as tax deductions, the income I've received and who paid me what, what part of the income I've spent on business expenses, and what I am paying in taxes to keep track of my profit, and marketing numbers that help me keep track of how I'm doing (I'll write about that soon).
Then I have a file cabinet that holds hard copies of all of my client contracts, business receipts of those expenses listed in my tax deductions (as proof to the IRS in case I ever got audited), and all my tax payer information.
If you can develop a recording keeping system that works for you, it'll help you immensely when things like tax season roll around.
Once you start making money...
Being self employed, you'll potentially need to start making four estimated tax payments to the IRS every year. By definition anyone who expects to owe $1000 in taxes needs to. If you aren't making any other income at all, you'll have to make about $6,000 to $7,000 a year to reach that threshold. But if you have another job you may reach that a lot faster. So start thinking about that sooner rather than later. I've got a tax guide coming soon to help explain that in more depth.