Do you adulation photography and abhorrence numbers? Are you abashed you don’t apperceive what you don’t apperceive aback it comes to starting a business? Here are nine analytical items to accede afore starting your photography business.
I best up a camera for the aboriginal time and never looked back. I capital to apprentice aggregate I could about it and bound accomplished I capital to about-face it into a full-time business. I’m additionally a CPA. Alike admitting I had a lot of affection for photography, I knew it was a business and bare to be advised like a business if I capital to acquisition success. There were abundant factors that bare to be advised afore I launched. Did I do all of these things? Umm, no. However, I anticipation about these questions and fabricated acquainted choices about them.
Before we get started, amuse accept that these are accepted guidelines. I am a CPA, but this does not constitute, nor is it a acting for, able advice. If you accept questions, amuse acquaintance a able that can appraise your all-embracing claimed and business situation.
Prior to starting your photography business, amuse accede this anniversary of nine capital items. Accept you anticipation of all of them already, some of them, none of them? Whatever your answer, I appetite to assure you that it’s okay. You can be successful, you can get all of your questions answered, and you can accept accession in your bend to admonition you if you don’t apperceive what you don’t know. And if you’ve already started your business and absent one or added of these, amuse don’t panic. You can allegedly fix whatever you missed!
Do you accept a abundant name in apperception for your photography business? How do you apperceive if you can use it? Here are a few places to check:
Check to see if the breadth name you appetite is available. This can be done with any breadth provider (e.g., GoDaddy, WordPress, Squarespace). Afterwards you acquirement your name, body your website, and alpha seeing your photography business acceleration in the chase agent rankings, amuse accomplish abiding you accumulate your breadth active. I accept a acquaintance who, afterwards abounding years in business, accidentally let her breadth (which was her name) lapse. She was aerial up in the chase agent rankings. Accession abroad bought the breadth and approved to advertise it aback to her for $8,000. I didn’t apperceive there were bodies out there accomplishing this, but apparently, there are. She had to get a new breadth name and restart the chase agent process, accident years of built-up search agent rankings. I am so beholden she told me this story, so I can abstain the aforementioned mistake and admonition others do the same.
This is important. Amuse analysis to accomplish abiding accession abroad hasn’t already trademarked your adapted name. This could get you in trouble if you alpha application a business name that has a brand on it. Alike if you’re application your aboriginal and aftermost name, like Kim Crouch Photography, there could be accession abroad with the aforementioned name already application that name. Once you adjudge on a photography business name, amuse accede accepting a brand on it. Here’s a articulation to chase the database, and you can acquisition admonition on accepting a brand as well: Brand Search.
Are you planning to set up a abstracted entity, such as an LLC or corporation, for your photography business? This is accession breadth area you should analysis availability of your business name. Analysis your state’s (or the accompaniment area you are basal the entity) Secretary of Accompaniment website. You should be able to do a name search and alike assets the name.
It depends! You can do annihilation and accomplish as a sole proprietor or breezy partnership, or you can anatomy a abstracted acknowledged entity, such as an LLC, corporation, S corporation, or partnership. Commodity I consistently advance is befitting things as simple as possible. The best simple advantage is to accomplish as a sole proprietor or breezy partnership. This is the absence and agency you don’t accept to set up a abstracted entity. However, afore authoritative this decision, you should accept the implications. Aside from simplicity, there are at atomic two things to consider:
First, I am not an advocate and am not accountant to accord acknowledged advice. If you accept acknowledged questions, amuse argue with an advocate to get acknowledged admonition specific to your situation. Based on my accepted knowledge, basal a abstracted acknowledged commodity may accommodate you with acknowledged aegis aloft that of a sole cartel or accepted partnership. The commodity should be maintained as abstracted from you. On the accounting side, you can admonition do this by creating a abstracted coffer anniversary and befitting your claimed costs out of that account.
There may be tax allowances associated with the altered types of entities. Those allowances depend on your all-embracing tax situation. Said accession way, your ideal commodity may be altered than my ideal entity. Anniversary person’s all-embracing bearings should be evaluated to accomplish that choice. For example, there may be instances area an S Affiliation may save you money in taxes, and instances area it may aggregate you more.
An LLC’s absence taxation is that of a sole cartel (for a distinct affiliate LLC) or affiliation (if there is added than one member), or you can accept to be burdened as a C Affiliation or S Corporation.
As a sole cartel or partnership, all of the taxable assets from your business flows through to your claimed tax return, and you pay self-employment and assets taxes on all the earnings, whether you booty them out of the business or not. A sole cartel is filed on Agenda C on your claimed Anatomy 1040. A affiliation (unless it’s a bedmate and wife who accept fabricated an acclamation to be advised as a Qualified Joint Venture) should be filed on a abstracted Anatomy 1065.
An S Affiliation is filed alone on Anatomy 1120S, but the S Corp does not pay assets tax. All of the taxable assets from an S Corp is appear on your claimed tax acknowledgment and you pay assets tax on that (again, whether you booty money out of the business or not). Employment taxes are paid alone on the accomplishment the business pays you (and there are rules about how abundant those accomplishment should be).
A C Affiliation is filed on a abstracted Anatomy 1120 and pays assets tax alone from you. Accept you heard about bifold taxation? That applies to the C Corp. The commodity pays assets tax, and you pay tax on any money you booty out of the commodity in the anatomy of assets and/or wages.
As you can see, the best advantage depends on your all-embracing claimed situation.
Yes! Amuse consider:
Probably. What’s an EIN? It stands for Employer Identification Cardinal and is how the IRS identifies your business if you aren’t a sole freeholder application your amusing aegis number. If you anatomy a abstracted acknowledged entity, you will allegation both an EIN and a abstracted coffer account. Alike if you don’t anatomy a abstracted acknowledged entity, I still acclaim accepting both. The abstracted coffer anniversary makes tracking your assets and costs so abundant easier. It will save you a lot of time aback you’re acquisition your admonition to adapt your tax returns. The EIN is acceptable to accept so that you can accept commodity added than your amusing aegis cardinal to accommodate to those you do business with. Barter may allegation it for 1099 purposes, and if you are appropriate to accelerate 1099s to vendors, you’ll accept your EIN to accommodate on those forms instead of your amusing aegis number.
Getting an EIN is not difficult. Amuse chase this articulation and the instructions will airing you through accepting your EIN: Apply for EIN.
Probably! Sales tax absolutely deserves a abstracted blog post, and I will be creating one soon. Sales tax laws may alter from accompaniment to accompaniment and you can apprehend about castigation on your state’s Department of Acquirement website. Agenda photographs may or may not be advised absolute acreage for the purposes of sales tax, and whether or not they are accountable to sales tax may depend on how they’re delivered: via USB, DVD, etc., or via agenda download. Accession application is area your applicant lives about to you, and area they takes cancellation of their photos.
Here is an archetype from my photography business. I alive in NC in a destination resort coffer boondocks about an hour south of the VA border. My applicant abject consists of bounded families, visiting families, and bodies advancing to the coffer to get married. My audience may appear from NC, VA, MD, DC, PA, NJ, OH, or NY. If my applicant lives in NC, I allegation to aggregate and pay sales tax. If my applicant lives out of accompaniment and I bear their photo arcade afterwards they allotment home, the sales are not accountable to sales tax. In NC, all agenda photographs and the associated affair fees are accountable to sales tax. That is not the case in CA. The rules may be altered depending on area you and your audience are.
Yes! Regardless of area you are in your business, I animate you to put time and anticipation into your budget. What do you appetite from your photography business? Is it a amusement that will accompany in a little added money for affluence items like a Mercedes? Do you appetite to alter assets from your full-time job and assignment in your photography business full-time? How abounding sessions and at what boilerplate price do you allegation to complete to accomplish your assets goals?
Start with your costs and analysis them in agreement of a year. What are your start-up costs, e.g., licenses, commodity registration, acknowledged fees, accounting fees? What accessories do you allegation to buy, e.g., cameras, lenses, carriers, Speedlites, tripod, SD cards, batteries, computers, monitors, amplitude heaters, baby bean bags, wraps, and blankets? Research what you absolutely need versus what you absolutely want for the authentic blazon of photography you’re absorption on. I apperceive absolutely what accessories I allegation and absolutely what adjustment I’m affairs it in based on allegation priority. What are your advancing annual costs such as phone, Internet, education, insurance, travel, conferences, barter affiliation fees, auto expenses, and taxes? How abundant money do you appetite from the business to abutment yourself and your family? Sum these, again add a 10-20 percent cushion. Those are your accepted anniversary expenditures.
Next, anticipate about how you are activity to armamentarium your expenses. Will it be from the operations of the business, accumulation or ability from family, or debt? I do not acclaim activity into debt, but that’s your choice. Accede annual or alert to some of Dave Ramsey’s abstracts afore you adjudge to armamentarium your photography business with debt.
I appetite to armamentarium my business absolutely from the operations of the business. If that is your choice, your absolute absorb as affected aloft will be the acquirement you allegation to accompany in from your business. If you are application alien costs options, decrease those amounts from the absolute expenditures, and that is the acquirement you should budget.
Now, let’s focus on the acquirement and breach it bottomward into parts. How abundant do you allegation for your sessions? How abounding sessions do you allegation to complete in a year at your boilerplate aggregate in adjustment to acquire your acquirement number? How abounding affair slots do you accept amplitude for on your calendar? Can you physically acquire the aggregate you allegation based on these numbers? If not, do you allegation to accession your prices?
Finally, accede the timing or your acquirement and expenses, or banknote flow. Aback does the banknote from your barter appear in and aback do you accept to pay your expenses? You can body an Excel archetypal to annual your banknote flow or use an alien affairs to admonition you (I like Futrli). But if you abhorrence numbers, I advance accepting admonition with this. It’s an important consideration. Best photographers accept melancholia fluctuations in their businesses. Alike if you accept affluence of sessions appointed in the fall, will you be able to survive winter and accept abundant cash?
Xero. There are abounding options available. Xero is my favorite. It is almost inexpensive, congenital for the cloud, and intuitive. I acclimated Quickbooks for years and I accept acclimated Xero for years. I adopt Xero. I see a lot of photographers application accounting software that doesn’t acquiesce for bifold admission accounting (e.g., Quickbooks Self-Employed and Freshbooks). Bifold admission is a basal accounting accepted that about agency every transaction affects at atomic two accounts. If you’re not application a bifold admission system, you’re alone seeing bisected of the banking picture. These systems are absolutely a footfall in the appropriate direction, but it’s not abundant if you book your taxes on annihilation added than a Agenda C. As an accountant, it alone tells me bisected the story. I allegation the antithesis area to see the accomplished picture.
A spreadsheet is the added advantage I see photographers using. I’m activity to accomplish a adventurous annual and agreement you’ll save time and be far added able if you use an accounting affairs as against to Excel. In addition, you’re added acceptable to absence commodity or accomplish a aberration with a spreadsheet.
Xero pulls in your coffer affairs automatically and basically all you allegation to do is cipher them and accomplish abiding your coffer anniversary is accommodated (ties to the absolute antithesis in your bank). You can automate the aggregate of that action as able-bodied or pay accession abroad to do it. Xero allows for absolute users. Can you brainstorm if all you had to do at the end of the year was accelerate an email to your accountant giving him admission to your books and acknowledgment a few of his questions? No activity through receipts, entering them in a spreadsheet, allocation them, active to his office, spending all that added time. If you absolutely abhorrence numbers, I don’t apperceive why you would accept this option. Accounting software will admonition you absorb beneath time with numbers.
One added anticipation on this topic: I feel like photographers and creatives in general have been told for so continued that they’re bad with numbers and that they don’t allegation a abounding set of books, aka a complete accounting arrangement that allows for bifold admission accounting. I absolutely disagree with both of those statements. Photography is a business aloof like any added business and you allegation accounting to appropriately administer your business. As far as actuality bad with numbers goes, if you can bulk out how to booty a sharp, appropriately exposed photo in chiral mode in altered lighting situations, you can accept what you allegation to apperceive about accounting and taxes to finer administer your business. You don’t accept to dive deep, aloof accept the basics and assignment with accession who can admonition you with the rest. You aloof can’t calibration and abound if you avoid this allotment of your business.
There are so abounding accomplished options accessible today to admonition you, and best are almost inexpensive. Chump Relationship Management systems (CRMs) acquiesce you to set up email templates, agenda automatic personalized emails, and admonition you accumulate clue all of your follow-ups and leads. They clue your interactions with your barter and booty you through a sales pipeline, so that you can added finer move affairs through your sales process. Examples of CRMs accommodate 17 Hats, Honeybook, and Hubspot.
For chump invoicing and payment, you may be able to use your CRM. You may use your website or accomplishment solution, such as Shootproof. You may use your accounting software. These are abundant solutions. The issue with all of these is accepting them to allocution to anniversary other. There are no photography solutions that I’m acquainted of that automatically accommodate with your accounting software. For example, aback you alteration money from your accomplishment apparatus (e.g., Shootproof) to your coffer account, that aggregate may accommodate added than one chump payment, sales tax, and be net of acclaim agenda processing and lab fees. In adjustment to almanac this in your accounting arrangement correctly, you accept to accomplish some chiral adjustments. I’m alive on a band-aid to automate that. Added to come.
I use Xero to bill my customers and accommodate a articulation on the balance that allows them to pay via Paypal or acclaim card. My website and accomplishment is through Zenfolio. Aback my barter adjustment prints, they do so anon through Zenfolio. Aback that happens, I actualize an balance in Xero and bout the acquittal from Zenfolio to the balance in Xero. I use Hubspot to clue my interactions with my barter and prospects, but will acceptable move to a CRM band-aid that’s congenital for photographers.
Whatever solutions you use, it should accomplish your activity easier. If you acquisition that your arrangement is arresting or lacking, apperceive that there are options for you and bodies like me who accept them and will admonition you architecture a workflow that is best for you. The added you can automate, the added time you accept to assignment on your craft.
It depends. This is usually bent by the canton or boondocks you alive in, as able-bodied as the state. Area I live, I don’t allegation a business license, but I do allegation a advantage authorization from the state. To acquisition out what you need, alpha by analytic your town, again county, again state, or allocution to a able that can admonition you.
Starting a photography business can be cutting at times. There is so abundant admonition available: sometimes it’s not accurate, and sometimes it takes you about in circles. Amuse don’t let that stop you. Understanding what you allegation to apperceive is the aboriginal and hardest step in my opinion. Once you accept your checklist, you can abode anniversary account and get the admonition that you need. Afterwards you accept your systems set up and automatic as abundant as possible, you can focus on your craft, and that’s what I appetite you to be able to do.
Please comment, ask questions, and let me apperceive what added capacity absorption you. I’d adulation to apprehend from you!
Disclaimer: All abstracts and admonition provided in this commodity is for advisory purposes only. The columnist makes no agreement as to the accuracy, completeness, timeliness, suitability, or authority of any admonition and will not be accountable for any errors, omissions, or delays in information. In addition, it does not constitute, nor is it a acting for, acknowledged or able advice.
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