THIS IS A GUEST POST COURTESY OF ALLIE CLINE OF ALLIE CLINE PHOTOGRAPHY
You’re ready to grow your hobby into a business, but there is so much information out there that it is confusing, overwhelming, and you just don’t know where to begin. You can stop pulling out your hair; we have been there too! If you follow these basic steps, you’ll be on your way to a successful business.
Some things to keep in mind, this is not a one size fits all how-to guide. You may already have some of these items checked off your list or you may be out of order, and that is completely okay as one step is not necessarily a prerequisite for the next. A final disclaimer before you
jump in, the moment you exchange any amount of money for your services or products, even if you are coming up negative, the federal government considers you to be in business, so you will want to utilize some of the information in this article to make sure your photography side
hustle or full-time gig is legitimate.
You’re talented and you’re going to rock the industry, but first, coffee! No really, you will want to start here first.
1. The Business Plan
Every legitimate business needs a solid foundation for how it will function. Without taking stock in what you currently have, knowing who you are as an artist, and knowing what you want to get out of your business, you will have no direction. As a result, you will fail, but we want to help you prevent that from happening. If you set the expectation of your business
with a solid plan, your business will have the foundation to flourish.
So, what if you’ve never written a business plan before? You do not have to have an MBA or hire a consultant to draft one for you. They will ask you the same questions you will address in writing your own. So, what should you include?
The first section defines your business. Here you will want to include your mission and vision statements, a summary of your company, the business structure (we’ll examine this a little later), your location, and the services you offer or what it is you do (think niche). Simple enough right?
The next section defines your strengths, weakness, threats, and opportunities for your business. This is important because it shows how you will stick out from your competition in ways that make your competition better than you. It helps you realize what threats
there are to your business (external or internal) and areas you have for growth or markets not yet covered.
Next, you will analyze your market by researching the demographics in your area and who is available for the type of photography you will do. You will define your ideal customer and how you plan to acquire customers through marketing. You may want to do online marketing, mailing, trade shows, word of mouth, or even go door to door! However you decide you want to market, and whatever combination, you will want to have a solid plan before jumping right in.
The following section, probably the most important one, is the financial section. Here you will break down your costs of doing business (CODB) and the cost of goods and services (COGS). This is mentioned often in social media forums and for every individual, this will be different. So, what does it mean? Your CODB will be how much your operating costs are. For these, you will want to consider everything. Maybe you aren’t in a studio yet, but you drive to your sessions, you use your cell phone for communicating with clients, you pay for website and gallery services, you run ads, and you buy props, backdrops, clothing, and so much more.
You will want to include all of these. Sit down and calculate how much money you spend for every session you do. If you have a studio, your costs will likely be a lot more and you will want to take into account even the cleaning supplies you buy for your studio in your CODB.
Your COGS will be the products you would like to sell. There’s no exact science to how much you should charge, many will say four times what it costs you, but that number is empty if it does not cover your CODB. You can be less, and you can be more, but if an item costs you 10% of what you are selling it for over 25% you are going to be more profitable. My
recommendation is to aim for that 10-15% mark. Be sure to include yourself a paycheck for the cost of your service, many people only consider the goods they sell while completely forgetting about their services. You can go in-depth with costs when determining start-up
costs, projected profits, and losses projected cash flows, taxes and more which is why it is a good idea to hire a CPA or other professional to look over your numbers once you have calculated them.
Once you have your costs calculated and sorted out, you will want to focus on your profitability. Determine how much you need to charge for your session and products based on those COGS and CODB. You will then need to calculate how much you would like to make a year and how many clients you need to meet that goal. If your goal is $100k a year and you wish to make $1,000 in profit per client, then you would need to take on 100 clients per year. That is a little more than 8 clients per month. Is that feasible for you, does that sound like too many or too few clients for the pace you like to work? This is something only you can decide, but you need to make a decision, so you have monthly goals to meet.
That is the basis of the business plan. Of course, you can church it up with a nice cover page and a one-page summary of the paper if you are attempting to obtain funding or support for your business, but it isn’t necessary. Although it seems like a lot of information, your business plan is the meat and potatoes of the success you aim to have. Once you draft
and review it, have a friend look it over and see if they can understand it. If they do, it means you have a solid plan, if they are confused by anything, you may need to spend some more time explaining. After the business plan is complete, it’s time to move on to the next step in starting a business.
2. Business Name and Formation
To start a business, you will need a name and will need to make it legal. Here is where things can get complicated, but they do not have to be. It will always be my recommendation to look things up in your state/province/prefecture/country and then consult with an attorney. Of course, many people skip the attorney due to fees, but if you are unsure about what you are filing, it may save you money, in the long run, to consult an attorney from the beginning.
Let’s start with your business name. If you have one, that is fantastic! If you don’t, you have some things to consider. Your business name is your brand; it is how you will appear to clients. Think about your business name and what it says about your company, is it faddish and won’t be able to sustain, does it allow for growth if you plan to take on employees,
does it mean something to you? There are many options when considering your name, and rebranding can be difficult later on, so you want to ensure you have chosen a name that will have some longevity. Do you have your name yet? Great! Let’s move on to the second part of naming your business.
What? Yes, there’s a second part to coming up with a business name. It is fantastic that you have finally chosen a name but now you will need to search if your name is already registered. There are a few places you will need to do this. The first is online, spend some time Googling the name and searching social media to see if the name is already taken. Just
because it is taken online does not mean they have legally registered the name, but you would not want to compete for a dot com or Facebook page with someone already using the name because it might confuse clients.
Once you have found the name is not present online, it is time to check out your local clerk’s office. Some have registered fictitious and assumed business names for browsing online, while others you have to pay a fee and they send you the list based on your query. Most counties will not allow people to register the same business name as another person,
and if you did try to submit it and the name was already taken, you would lose that filing fee and have to refile with another fee and name.
After your county is assessed it’s time to check out the federal trademark search. The search is available for free online. You can ensure that no one is registered using your business name if they are, you will want to choose a new name so that you may register it.
Now that you have your business name picked out, it’s time to determine the type of business you are and register it with the state and IRS. You will need to register for an EIN for your business with the IRS. Are you a sole-proprietor, are you a single or multi member LLC, are you an S-Corp, or do you want to be fully incorporated? The most common formations for photographers are sole-proprietors and LLCs. Some will have S-Corps and rarely, if at all, will you see a photography company that is a C-corporation. Each of these formations has different filing requirements by your state, so it is important to contact your county clerk’s office or an attorney for the appropriate forms to file.
Take into account these fees as part of your startup costs. The cost of an LLC is very high especially when compared to a sole proprietorship, but the level of protection it gives you is worth all the fees. After you have your name registered, your business is set up and filed, it’s time to look at the next step.
3. Taxes, insurance, bank accounts, legal documents
Here is where hiring professionals will serve you well. Unless you are confident or certified in any of these matters, I recommend that you have a CPA and an attorney on your team that you can call for questions or help you file things. As earlier mentioned, you will need to file for an EIN with the IRS. This is the number, similar to your social security number, that you will use to file taxes and open a bank account. Most banks will require you to have a DBA (Doing Business As) or Fictitious business name (what you filed with the county clerk’s office) and an EIN to open an account for your business. With this information, you will be able to keep your business funds separate from your personal ones, and you may be able to open a line of credit for your business.
Filing taxes are an area of business that many new small business owners get hung up on, but it doesn’t have to be that scary. You essentially will have two types of taxes you will have to pay – self-employment tax and sales tax. Income tax you will want to pay quarterly estimated taxes. This is always a challenge for your first time because you have never made
money before, you aren’t sure how much you will make each quarter. This is where that business plan comes in. You know what your goal is, what you think you can achieve. Use that number on your forms, and if you paid over or under you can always adjust it in the next quarter. You just want to make sure by the end of the year, you are not underpaying because you will get slammed with penalties. As long as you are covering 100% of what you paid the past year or 90% of your total tax due this current year you should not receive penalties. To pay estimated quarterly taxes, take the amount you paid last year, divide it by four, and round up to the nearest whole dollar. This is the estimated amount you will have to pay quarterly, and if you overpay, you will receive a nice tax return. Much more of this
information is available through the IRS.gov website. Don’t forget to also pay state quarterly sales tax. You will want to confirm with your state and local governments to ensure you are paying the right types and amounts. Self-employment tax will be filed as a Schedule C on your 1040 annual income taxes. It seems like a lot at first, but once you get the hang of it, it
becomes easier to manage.
Insurance is the next C-Y-A on your list. If you haven’t considered insurance for your business, you are making a big mistake. If you have a studio, you likely already have to carry some type of property insurance, but there are other types of insurance all photographers will want to carry which include liability and gear and property coverage. You want to make
sure you call around and get quotes the same as you would with car insurance. You do not want to be in a position that will put your business at any sort of liability without coverage.
Legal documents are another important need before operating your business. You need contracts for the shoots you are doing, model call agreements, payment agreements, product receipts, and many other types of legal forms that will serve your business functions. If you decide to get these somewhere for free (and even paid) online, be sure to
have a small business attorney in your area check them out and make sure they will be upheld in your area. You will need to determine which is the best method for your business. Once you have taken care of all your taxes, legal documents, set up bank accounts and insurance, it is time to move on to the next step – the fun stuff.
4. Build your website, portfolio, and collection
This is going to come in waves and at different time frames for everyone as they grow and expand, but you will want to make sure you have the minimum to go forward. The first task is building a fantastic portfolio. Are you a niche photographer or a general photographer? Do you have a style of editing and shooting that presents fluidity for what your audience will see? If not, it is time to get shooting before you launch your business. It is okay to grow and change your style as you learn, and we are always learning and trying new things, but you want to consider how that will appear to your clients.
Once you have that portfolio, get that website and social media up and running. It is relatively cheap to maintain a dot com or dot net website every year and there are many website builders’ sites out there that make it quite simple for you to establish your site.
Many even have SEO to help you appear higher in the searches for your area. With social media, you will want to maintain an active presence because a majority of people utilize social media today. This will help with marketing as well. Make sure your website and social media all are linked together and users know that they are accessing the same person by
using your logo and name in what you share.
You will also want to build your collection of gear, props, clothing, and samples – whatever it is that helps you in your business. Many will tell you they built their business on an entry-level DSLR and a 50mm 1.8. That is a great way to start, but it is not a very smart business decision. What happens if there is an incident during the shoot and the camera malfunctions, are you going to make your client return for another shoot? They spent a lot on hair and makeup or it’s a special occasion; you cannot possibly reshoot another time.
You need to have a backup camera, and you need backup lenses. You don’t need top of the line and the latest and greatest to be successful, but you do need to be able to handle situations thrown your way. Think of what you will need at a minimum to operate professionally, and once you have all of that complete, you are ready to roll into your final step.
This step is an ongoing process that will not end throughout your business. You will always market your business, but the ways in which you do it may change. Either way, this is the key to a successful business. Get out that business plan from step 1 and put your marketing section to use! Your website and social media are one form of marketing. There’s marketing through mail, email, business cards and brochures, trade shows, chamber of commerce events, and anywhere. The best marketing will always come from word of mouth but that takes time to build by doing many sessions and leaving your clients with an experience they will remember.
There is no right way to market, but there are many wrong ways, which result in loss of time and money with no real leads. This is why your business plan from the first step is so important because you want to make sure that you are marketing to the right type of client for your business. Marketing in itself is a very time extensive task, it may be
conducive to your business to outsource or to study successful marketing to help your business grow. Work is all around, you just need to make sure it fits your business needs.
I hope that after reading this you have a stronger sense of what you need to grow into a business. It is not an overnight task, but it is not difficult. Many before you have done it, and successfully at that. You are no different, Rockstar! I can’t wait to see how your business flourishes.
Allie Cline holds an MBA from the University of Maryland and a
BA in Education and English from Arizona State University. She is
an international photographer located in Japan and owner of
Allie Cline Photography.
This article was featured in Summerana Magazine | March 2020 issue