BetterPhoto Q&A
Category: New Questions

Photography Question 
Angel Korenek
 

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Hello Everyone!
WOW! This site is awesome. I was able to get answers to a lot of my questions already, however, I still have a few more!
I have a deep passion for photography but I also love my full time career. I am a nurse who works 3 12 hour shifts and off 4 days. I thought I could make extra money doing what I love (photography) I have taken mostly children pictures but I love almost all photography. My question, after reading all the statistic post, what would be a good way to make it worth my while. As I stated before, I am not looking to get rich or leave my career. I want something that is mine! Do I stick to word of mouth or go corporate? And if I stick to word of mouth how much legal trouble can I get into if I get an abundance of clients. Thanks so much.
Angel


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2/28/2007 7:28:41 PM

 
Irene Troy
BetterPhoto Member Since: 5/27/2004
  Hi Angel and welcome to BP! You’re right; this is an awesome place with some really great people who love sharing their knowledge and experience with newbies and anyone with problems. If I understand your question you are thinking of taking your photography hobby and trying to earn some additional income. I am primarily a writer who is just now starting to see images to accompany my writing assignments, so I am no expert on any of this. However, what I do know is that following your passion (whatever that passion may be) is the secret to happiness and success in life – both monetarily and emotionally. When you ask if you should “go corporate” I assume you mean if you should establish a true business with articles of incorporation, etc. Personally, I’d think that you might be better off starting to build a reputation in your community by promoting yourself among your friends and neighbors and then branch out from there by both word of mouth and some promotional materials that include a brochure of your work including pricing, etc.

As to legal issues; you did not mention where you live; however, regardless of location I think the most knowledgeable source for that type info is a local attorney or better yet, (simply because it is usually free) small business administration office. You might also want to consult with an accountant to determine how your supplemental income should be tracked and reported to the IRS (presuming, again, that you live in the USA). I live in Massachusetts and report income from my photography as part of my freelance business income. There are many differing tax laws from state-to-state that set the minimum income that must be reported and that is taxable – check locally. As to other legal issues; you need to be aware of the need for model releases for any images that you plan to market. If you do a search on this forum you will find many posts concerning how model releases work.

Mark Feldstein, who posts here frequently, is one of the most knowledgeable and helpful members of BP and he often posts on issues related to both the “how-to” and legal aspects of photography as a business. Do a search for his name and see what pops up. He is usually quite willing to help people who are trying to figure out how to start and how to deal with setup issues. He certainly knows a great deal more than I do!

Good luck and keep us posted.

Irene


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3/1/2007 6:47:54 AM

 
Michael H. Cothran   Assuming that you are a "1-person" photography business, you cannot incorporate, so forget any notions of corporations. You are what's called a "sole proprietor" business, which in most ways is good. As a sole proprietor, however, you cannot pay yourself a salary from your photo business, as a corporation can do. But all the money you earn is yours to do with as you please anyway.
You must be careful conducting a "store front" business from a residential home. Local governments do not usually interfer as long as your visiting clients and deliveries are far and few between, and your neighbors don't complain. DO NOT hang a shingle on your door!
A county or city business license is usually not necessary when properly conducting business from your residential home. Many photograpers waste money on needless licenses when they aren't necessary.
That said, you SHOULD have a State Sales Tax ID Number. You can get this through your state government - usually the Department of Revenue. You are required to charge sales tax to your customers, and you are required to pay said sales tax back to the Dept of Revenue. The sales tax id number assigned to you also allows you the priviledge of purchasing wholesale - ie, buying materials and supplies for your business tax-free.
Hope this helps a little.
Michael H. Cothran


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3/1/2007 8:40:21 AM

 
Mark Feldstein
BetterPhoto Member Since: 3/17/2005
  Greetings Angel: Irene gave you some great info too, btw, and Michael's is good if you're trying to stay under the government radar. :>0)

BUT the problem in trying to do something under the government radar in terms of permits, licenses, taxes, regulatory compliance, etc., is that at some point, you're likely to get caught. And if that happens, you're equally likely to go down for the full count in terms of fines, penalties and interest all the way back to day 1 and that's regardless of whether one government agency finds you out (cause they'll automatically tell all the others) or whether a neighbor or even a competitor you're lowballing rats you out. Section 61 or the Internal Revenue Code says you're required to declare all income, regardless of its source. Of course, you can deduct reasonable and necessary business expenses, but not if you don't tell them you're starting up a business and if you do, they talk to the State Departments of Revenue, or in Calif. the Franchise Tax Board.

So let me ask you something, if you don't take unnecessary risk in your nursing work in terms of the overall quality of patient care, then why take chances in your business life. Is it worth the risks? Hardly. If you do, let me know which hospital you're at so I won't be admitted and I can notify JCAH. If you have an admission treatment plan based on an accurate H&P and corresponding diagnosis, then a realstic discharge plan and summary, why should your business be any different in terms of proper planning and administration?

Before you get rolling with your new found passion for photography biz you need a logical, flexible business plan that includes proposed fees, equipment costs, budgets for things like advertising, permits, tax impound account and INSURANCE because, as you know I'm sure, one law suit, even just the cost of defensive attorney fees can financially wipe you out. If you're renting your residence, you need to let the landlord know (in writing) that you plan to run a business from there. If you don't and they inadvertently find out, you can be evicted for violating the terms of your rental agreement.

And if you open a store front, chances are as soon as you move in, you'll get a visit from the local building inspector to make sure you're in compliance with city ordinances. If not, they'll red tag you and let the fire inspectors, tax assessors, business license police, ad infinitim know. If you're doing this from a home that's not in a commercial zone, they'll close you down and fine you.
If you get insurance, you may need to show the insurance co. license and operating permits before they'll cover you. They may want to inspect the property before they'll cover you and if it's owned by someone else, indemnify the owner and need their permission to operate there, like in the form of a lease. So, one way or another, if you do this right, the owner gets notified.

You should know too, contrary to what you might believe, this is hardly an easy business to start and maintain. It's a lot of work. Roughly 80% of what I do as a photojournalist is related to running my business and only 20% of my time is spent shooting and that time allocation seems to be pretty common in the profession.

Also, as far as incorporating, etc., as I said, you ought to talk to an accountant at some point but you can, in most states anyway, apply to become a LLC or limited liability corporation as one person (with a friend or two on your board of directors). But if you don't run it as one and incur liability, some clever lawyer will "pierce the corporate veil" and hold you personally liable. But considering incorporating at this point is probably a bit like premature adjudication. Come up with a plan or even two to add that one into the mix and again, discuss it with an accountant who knows LLC rules in your state.

So, to answer your original question here, to make it worthwhile, my answer is first, do it right and don't take shortcuts. Ask questions, talk to an accountant, understand the rules that apply to the business you're going into including copyright usage, contracting, collection practices, and join a local photographers association or two and go to meetings to meet your cronies and help you set up pricing guidelines, among other things. At one point or another, you're going to need their help.

That's my story and I'm sticking to it. Good luck. Be well, and pray for socialized medicine. LOL !!!
Mark


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3/1/2007 10:39:37 AM

 
Denyse Clark
BetterPhoto Member Since: 10/2/2002
  Hi Angel, welcome to BP!
I'm in a similar boat... I work full time as an Office Manager, and will not be leaving any time soon. But I wanted to do something with my photography.

I chose to open a small side business. Yeah, it's some up front work, but it's not too bad. I went to my county clerk and got a DBA for my business name, then an accountant helped me get my sales tax id number. My homeowner's insurance co. hooked me up with some insurance on my equipment, and we're discussing liability insurance now.

Do you have any experience with handling paperwork for a business? I think it's the toughest part for someone not from an office admin background. Just gotta keep track of your sales & expenses, and collect & pay sales tax.

Before I jumped into having the business, I went about a year just doing work for friends.

I advertise just by word of mouth at the moment... last year I had about a dozen clients. It's plenty for me, I want it to stay enjoyable, not add more stress in my life!

And Irene is right, Mark Feldstein is the best, he may find this thread & put his 2 cents in.


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3/1/2007 10:41:24 AM

 
Angel Korenek   Thanks too all of you. All of you have put my mind at ease. I am definitely going to do a lot more research because this is something I want to do! However, I do not want to set myself up for failure. I think it will be wise for me to keep it to word of mouth while I continue to learn the ropes. Who knows a business plan might take a year to develop. A dozen clients to begin with seems plenty to me also! I too want to keep it enjoyable.
So now I guess my question is how to manage the period before a potential business.
Forgive me guys..I am learning!!!
Thank you all again!
MARK~Have you wrote a book yet? Thank you for not charging for your valuable advice.


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3/1/2007 12:48:15 PM

 
Denyse Clark
BetterPhoto Member Since: 10/2/2002
  "So now I guess my question is how to manage the period before a potential business"

What do you mean? How to keep track of the business details of the stuff you do in the meantime? Personally, I didn't keep track of any of it. It simply wasn't a business then, so it was just me helping out some friends & they were appreciative & gave me a modest donation :-)


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3/1/2007 3:47:36 PM

 
Irene Troy
BetterPhoto Member Since: 5/27/2004
  Angel – I am also not sure what you mean by the period before it’s a business. I’ve been writing and selling my writing for years; however it only became my “real job” in the last five years. I only started selling my images with my writing in the last year and now try to market myself as being able to provide the full package to perspective clients. If you are asking how to track your initial expenses – investment in equipment being a potential expense – my accountant recommended keeping all receipts and records of expenditures even before I was actually producing income. I was later able to deduct the initial cost of some equipment. You really need to talk with an accountant or at least someone with experience dealing with freelance and/or assignment professionals. They will be able to explain what is and what is not deductible and how to keep proper records. I was surprised to learn that much of the equipment I purchased prior to actually earning income could still be considered a deductible expense.

If you are asking how to handle the “well, I’m not yet a professional so perhaps I shouldn’t charge as a pro would” syndrome, I can tell you from harsh experience: don’t do this! I’m not big on clichés, but the one about people valuing that which they pay for is, for the most part, true. If you don’t value your own skill and work no one else will. Never take on work, even as a volunteer or low-paid “doing a favor for a friend” if you do not believe you have the skills necessary to produce a quality project. It’s better to turn down what looks like an opportunity than to take on a job and do it poorly. If you are serious about going pro – even as a part time thing – you need to always act like the pro you hope to become.

I hope that some of this helps

Irene


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3/1/2007 6:30:00 PM

 
Mike Rubin
BetterPhoto Member Since: 10/15/2004
  Just to expand on Marks comments about an LLC, ALL of the following help to demonstrate that you are running a legit business rather than a hobby.
Insurance, Business Checking account, Being properly funded,Federal EIN number, A business plan,An operating agreement (Even if you are the only "member"of the LLC listed with your state).
Hey Mark, did I forget anything?


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3/1/2007 7:01:05 PM

 
Mark Feldstein
BetterPhoto Member Since: 3/17/2005
  Let's see...Yep, definitely insurance, liability and property. A biz checking account absolutely yes ! You don't want to commingle personal funds with your business funds so as to make it so confusing an auditor couldn't figure out which was which. That holds true especially if someone incorporates or forms a partnership. Also, a tax impound account is useful to stash away tax payments before they come due.

Federal ID? Well, most DBA's I think use their own social security number, but it doesn't hurt to get a EIN especially if you start working with assistants and doing 1099's (rather than witholding) on them at the end of the year. But that's a whole separate issue.

I think you nailed it Mike. ;>)
Mark


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3/2/2007 9:58:40 AM

 
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