Get Serious!

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Very informative. Thanks for posting. I just do it for the love of seeing something captured through my eyes and if other like it too, then so be it.
 
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Borrow? Isn’t starting a business in hock is a dangerous concept, especially given the slim chances your business will survive? Yes, because if your business doesn’t work out, you’ll be saddled with a business loan in addition to any other non-business liabilities you might have, such as a mortgage, loan for the gas-guzzling SUV, furniture purchased for no money down, credit card debt, and so on.

There has been a great deal of good advice in this thread. However, there is one more topic that needs not be overlooked. It is beyond important to build a big wall between "business" and "family." The above quote discusses being "saddled with a business loan" while still having to pay bills "such as a mortgage." The problem is that, to many first time business owners, those loans are one in the same.

Though I have never had photogrqaphy as a profession, I have counseled many would be business owners. They all are positive that their new business, or the small business that they are buying, cannot miss. When you explain the failure rate of businesses, they just know that will not be their fate. To finance their cannot miss business, they plan on going to their easiest source of capital - the second mortgage. I would try to explain to them that, when their business fails, and it probably will, they will not only lose the business, but they will lose their home as well. The home where your spouse and children live is "family". Things in your life that are "family" should always be completely insulated from things in your life that are "business." If you cannot finance a business venture, without putting at risk the roof under which your children sleep, then you cannot afford to go into that business.

Of course, the majority of my clients, who knew, without a doubt, that they had a cannot miss business venture, would ignore my advice. A large portion of those clients, after the cannot miss business was not doing as well as they had expected, would be sitting in my office, asking what could be done to save their home. At that point, they did not care about losing the business; but, were desperately in fear of losing the roof over the beds where their children slept.

Before going into any business, it is imperative that one learns the difference between "business" and "family", and, how to never let one meet the other.
 
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...If you cannot finance a business venture, without putting at risk the roof under which your children sleep, then you cannot afford to go into that business... At that point, they did not care about losing the business; but, were desperately in fear of losing the roof over the beds where their children slept... Before going into any business, it is imperative that one learns the difference between "business" and "family", and, how to never let one meet the other.

Cliff :


Exceptionally sound advice ! Folks often think that starting a business is a trivial easy matter, and when things founder, they're shocked at how quickly they lose all of their personal security and that of their family.

When I set up my business, aside from minimising overheads (and most definitely not working from home - a sure way to have an unhappy home life, IMO), I built a very solid financial firewall between home and business.

People getting started often miss these essential points :


  • Set up separate business bank accounts - do not mix personal and business accounts;
  • Apply for and get a city and/or state business license;
  • Apply for and get a federal tax ID separately from your SSN;
  • Check if your state requires sales tax on your work, if so, apply and get that license;
  • Find out about the laws in your state on insurance and get more than the minimum; and, last, but not least,
  • Find out if you can get group health insurance through your business (and you need pretty much everything listed overhead for this).


I won't even get into a serious discussion of developing a prudent and thoughtful business plan, as that could occupy an entire page of this thread by itself. Suffice to (very) simply say, develop a business plan, then adjust it periodically.




John P.
 
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Cliff :


Exceptionally sound advice ! Folks often think that starting a business is a trivial easy matter, and when things founder, they're shocked at how quickly they lose all of their personal security and that of their family.

When I set up my business, aside from minimising overheads (and most definitely not working from home - a sure way to have an unhappy home life, IMO), I built a very solid financial firewall between home and business.

People getting started often miss these essential points :


  • Set up separate business bank accounts - do not mix personal and business accounts;
  • Apply for and get a city and/or state business license;
  • Apply for and get a federal tax ID separately from your SSN;
  • Check if your state requires sales tax on your work, if so, apply and get that license;
  • Find out about the laws in your state on insurance and get more than the minimum; and, last, but not least,
  • Find out if you can get group health insurance through your business (and you need pretty much everything listed overhead for this).


I won't even get into a serious discussion of developing a prudent and thoughtful business plan, as that could occupy an entire page of this thread by itself. Suffice to (very) simply say, develop a business plan, then adjust it periodically.

John P.

Thanks John...great great advice...wow thanks John.
 
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  • Set up separate business bank accounts - do not mix personal and business accounts;
  • Apply for and get a city and/or state business license;
  • Apply for and get a federal tax ID separately from your SSN;
  • Check if your state requires sales tax on your work, if so, apply and get that license;
  • Find out about the laws in your state on insurance and get more than the minimum; and, last, but not least,
  • Find out if you can get group health insurance through your business (and you need pretty much everything listed overhead for this).

John, your post is timely and appreciated.

I've recently stumbled into doing some commercial work for a locally-headquartered international company (a friend who's company does printing work for them referred them to me). I'm finding that very few people I know who have done photography for money even start to consider the items you bring up, probably because they are only doing cash transactions with individuals as opposed to reportable transactions with corporations.

I've been researching every item on your list above for the last few weeks, and I'm surprised that more people don't seem to see the complexities of this that I've been finding. Makes me think that most people I've talked to aren't really going through all the required steps to do this correctly, and are in actuality taking a huge risk that they might not be aware of. The business end of this business is much more involved than many people seem to think.
 
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Not to rain on anyone's parade and I do not know the writer of the original essay. But it sounds more like a disgruntled business man writing than anything else. How do I know, been there myself more than once.

Business is business, photography, woodworking, yacht-brokerage, interior design, bicycles, import/export, construction, project management. The basic business rules apply across the board and the competition is equally as nasty and stiff in all of fields of business, I know, I have done all of the above at some time in my life. In 25 years, I have never been an employee except to my own business. Everything the original writer has written could be applied to any of these professions when you are having a bad day, or simply tired of playing the game.

As for the cost of setting up as a professional photographer, it is one of the lowest outlays that I know of. $10,000 spent judiciously in most any country of the world will provide most of the tools you need as professional photographer. Of course, your actual equipment and costs will vary depending on your speciality. That is not a lot of money to start a business.

A carpenter will easily spend half again as much, opening a small bicycle shop will set you back 5 times that amount, even a decent wood shop will cost around $20,000 to outfit.

No matter your choice of business, if you are only competing on price, you last only as long as your set-up capital. The first serious hiccup will push you over the edge into oblivion.

There has never been a time when it was cheaper to set-up as a professional photographer. Digital has made most of us forget the bad of the 'Good Old Days'. Taking the example of the industrial forensic photography mentioned in a previous post, instead of spending a few grand on a PC, monitor and printer for the client to view the photos, you would have to set-up a portable darkroom and hire several assistants to process and print for you. That makes a digital set-up look cheap by comparison.

Just my 2¢,
 
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I'm not a pro photographer, but I do know about business from the perspective of being an investor in public companies (I do all of my own research) and from having spent my entire sales career working for small companies.

1) The person wrote that "most businesses don't turn a profit until after 5 years." I'd like to see the empirical data about that. However, if I give that statement the benefit of the doubt, it's misleading because it's out of context.

First, a one-person photography business operating out of the home is not typical of "most businesses." Most businesses rapidly expand in their first five years. Expansion requires expenditures (investments in the future) that initially generate losses. However, to compete successfully they have to expand. As their revenues rapidly grow their expenses also grow. A one-person photography business doesn't have huge expansion costs. My educated guess is that a one-person photography business that can't make money in the first year is more of a hobby that generates revenue, not a legitimate business.

Second, a business can be losing money while generating a very healthy income for its owner. That can't last forever, but it can and does happen regularly.

2) As start-up businesses go, the really great news is that if you can start a photography business on $10,000, it's one of the absolutely cheapest businesses to start. The really bad news is that that is so little money that so many people can do that, especially retirees from other careers, that the industry has way too much competition. That affects the amount of money you can charge. That leads to my next point ...

3) The one-person photography business is typical of a cottage-industry business. Cottage industries are typically made up of people who first and foremost go into business because they enjoy their art or craft. The various competitors generally have very little or no business expertise. (Sound familiar?) The tendency in cottage industries is that the competitors feel forced to compete only on price because they don't know the how-to of marketing, sales, and all of the other every-day business strategies used by most companies that would otherwise enable them to compete on anything other than price, such as by providing better service and quality. That leads now to my last point (feeling lucky that it's my last? :wink:) ...

4) If you're the kind of go-getter who realizes what it takes or is willing to learn what it takes to be a successful entrepreneur completely aside from your photography skills, go for it. That's because in virtually every industry, the competitor who is properly capitalized (a fancy term for having enough money to survive downturns in profitability and cash flow), who separates himself or herself from the competition by offering something a little different other than price, and knows how to get the word out to prospective customers, truly that person will do very well. You can be that person just as much as the next guy.
 
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In a nutshell you have to be an expert in 2 fields. 1) The field of your chosed "profession" 2) An expert in business. #2 may be a little harsh but I've known a lot of people that are really good at what they do; mechanics, photographers etc but dont have a clue on how to run/operate a business and survive let alone succeed. I find the a lot of times people confuse expence for investment and vice versa. Like the poster that said the went out and bought a top end computer and then a printer. He realised the investment. IF he didnt make it pay off (which he knew it would) It is then an expence. And we all need as few expences as possible. The catch is to know the difference between the 2.
 
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Fascinating 'editorial'.

I'm very seriously trying to pursue some semblance of business, especially in sports, which has to be the hardest field to break into.

Heck, I'd love for this to be able to sustain itself.
 
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I had to take a break from writing my previous post to cook dinner, the sort of dinner that I promised Seneca if she ever comes to my part of the planet. :biggrin:

A major flaw in the initial post that Seneca provided us is that investors in a typical start-up business put up the money that buys the initial fixed assets such as office space, desks, equipment and the like. I'm confident that most one-person photography businesses already own much of the required equipment (camera, lenses, computers and software) as a hobbyist before venturing into the business. So, the statement that $10,000 is required to start a photography business is very misleading in my opinion.

As explained in one of my points from my previous post, that's good and that's bad. It's good because you can turn your hobby into a business without risking or spending much additional money. That's bad because so many of your fellow hobbyists will do exactly that, continuing to put pressure on industry pricing.

There are a lot of acid tests that you should take to determine if you are likely to be a successful entrepreneur. I'll offer two:

1) Are you willing to lose absolutely every penny that you invest into your start-up business in the event that it fails? (If your answer is that it's an irrelevant question because you know it won't fail, you flunked the first acid test.)

2) Would you be willing to accept a sales position with an employer that pays you only on the basis of commissions with absolutely no draw or salary? (If the answer is "no," you flunked the second acid test. When operating your own photography business, you only get paid when you sell your services and collect the money from customers.)

To end on a positive note, if you can determine an underserved niche in the photography market (photographing Big Ben and other tourist sites in the most incredible light imaginable is exactly the opposite of an underserved niche) and have the business acumen to exploit it to your financial advantage, you've got a much better chance of being successful.
 
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Taking the example of the industrial forensic photography mentioned in a previous post, instead of spending a few grand on a PC, monitor and printer for the client to view the photos, you would have to set-up a portable darkroom and hire several assistants to process and print for you. That makes a digital set-up look cheap by comparison.

Lynn :


The dollar costs of setting up aren't per se the issue here in my considered opinion. Twenty years back, I didn't have those options, and I couldn't do the same job that I do today. The comparison's a little like noting that I couldn't model an explosion in the field with a laptop back in the 'eighties. The capabilities just didn't exist in that era. I sent out twenty rolls of film a case, had to wait to see how they worked, and hope that I hadn't had any kind of failure with evidence I couldn't recover.

For some odd reason, I prefer the current technology... :wink:

Having a lower threshold for investment is, in a certain sense, a bad thing for some people considering photography as a business, as the entry costs are such that some folks might jump into the field before they are truly prepared for running a business. Higher entry costs tend to make some people more contemplative of the risks of the business, and I think that may be a positive "stop-go" moment in the decision making process.

As others are noting, the important issue is understanding that being a full-time professional photographer is a business, and thus requires sound business discipline.



John P.
 
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... but I've known a lot of people that are really good at what they do; mechanics, photographers etc but dont have a clue on how to run/operate a business and survive let alone succeed. I find the a lot of times people confuse expence for investment and vice versa. Like the poster that said the went out and bought a top end computer and then a printer. He realised the investment. IF he didnt make it pay off (which he knew it would) It is then an expence. And we all need as few expences as possible. The catch is to know the difference between the 2.

PP :


Heh. Well, when I came back into the room with an amazing widescreen display to attach to the computer, everyone's eyes lit up. Once two of the more senior people in the company who were present called dibs on the display for the end of the case, I knew that I'd made the right decision ! :rolleyes:

And in any event, this wasn't a sunk cost (a fancy B-School term for a completely non-recoverable expense), because I could have sold the gear used for less than the cost of renting the gear for the period of the investigation. Or I could have upgraded the gear in my office (remember that "...when the financial condition of one's company allows for it" comment, eh?), or I could have just looked at the overall revenue from that project, which was significant, and accepted a lower net profitability, but a very large positive cashflow deriving from the project when I might not have been so busy. Cashflow is the lifeblood of a small business, where a company can be highly "profitable" but sink on negative cashflow.

A lot of alternatives for how to address these things, and fortunately, I've been lucky enough to see some of the issues when I worked for or around other companies, sometimes with rather stark and unpleasant results. Knowing the alternatives in a business means a business person can make more informed decisions, even if the decisions are not the nicest ones. Informed decisions are, generally, better decisions.

And you're 100% correct - knowing the difference between investments and plain expenses is the key to the gap between profit...

... and loss.


John P.
 
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I had to take a break from writing my previous post to cook dinner, the sort of dinner that I promised Seneca if she ever comes to my part of the planet. :biggrin:


Dang Mike, I just realize I was in your neighborhood a couple of weeks ago!
Fairfax, VA and D.C. Nothing I love more than having people cook for me. :biggrin: Sorry, love your post too.
 
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There is soo much good info from all sides in this thread. The underlying tone to it all is that you have to spend money to make money.
Yeah I want to be able to do photography and have it be my only income, but realistically for now, I would be happy to have it pay for itself when it comes to buying more lens (yes, lens lust must be satisfied!!!), take the seminars & classes to improve my skill & software/hardware upgrades (expenses or are they "investments"???). But with digital age and everyone trying to break through it's hard to find the niche that you can capitalize on, but we all keep trying to find ways to set ourselves apart from everyone else, &/or we come back to the Cafe & get humbled by our "inadequacies" compared to the skills of those around us.
 
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To end on a positive note, if you can determine an underserved niche in the photography market (photographing Big Ben and other tourist sites in the most incredible light imaginable is exactly the opposite of an underserved niche) and have the business acumen to exploit it to your financial advantage, you've got a much better chance of being successful

Mike,

I agree 100%

Every self-made man that I can think of:

1. Was told he couldn't do it, or it was stupid.
2. Was passionate enough to stick to it long enough to succeed.
3. Did it with just a little different twist...an angle.

I started out with nothing and have most of it left!

Still laughing. Man, that is good stuff!
 
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John and Mike,

I think we are saying the same thing. There are universal principles of business that apply no matter your choice of industry, profession, or trade. Talent does not equal business success, although I am the first to say that not everything can be measured in dollars and cents. During my tenure as a business owner and employer, I had many very talented people work for me, some with far more talent than I will ever hope to have. But they worked for me because they understood that their talent did not guarantee them business success and I was happy to pay them for their talent. Win-win for both of us.

The definition of a professional photographer, professional designer, professional plumber, etc and etc, is that the ascribed professional generates his or her living income from that profession. I have vast experience in the building and construction industry and even after being out of the industry for 5 years, I get called in to troubleshoot and oversee very complex situations occasionally. I get paid very, very handsomely for this. But I do not earn my living from the building industry, so while I generate income from the industry, since my living income comes from the bicycle industry at the moment, I would not consider myself a professional in the building industry. I know many professional photographers, they support their families, buy new cars, houses, and send their children to college by taking pictures. Some are even hobby photographers in their spare time, but these are professional and are successful business people as well. They earn their living behind a camera.

Referring to cottage industry, many professional photographers that I know work from a home office, thus they avoid many typical business overheads and would fall under the label of cottage industry. Same goes for many other creative professions, woodworkers, weavers, designers, potters, artists and etc. So back to the $10,000 investment to set-up as a professional photographer, I was basing this figure on a cottage industry set-up, if you are going to include setting up a studio and gallery, then your cost will go up ten-fold, but so will any of the typical cottage industries if you move them outside of home-office setting. I was attempting to compare apples to apples.

Considering the cost of digital photography compared to film photography. If you took all your raw files to a third party and had them post-process them and print them for you, you could avoid all the computer and software costs. I know you are thinking I am a lunatic to even propose such a thing, but that is essentially what we did with film. In doing so, we avoided the overhead of a darkroom and staff. We contracted a third party to do our post-processing. With advent of digital, suddenly the whole darkroom fit into a small box and the photographer himself could sit down and post-process a whole shoot in a few hours and have ultimate control over every step of the process, but to do so we have to invest in a few thousand dollars worth of computer gear and software. Does any one remember the cost to set-up and operate a darkroom that could process, proof and print a few hundred photos a day? It has never been cheaper to set-up as professional photographer than today.

My dad was commercial photographer when I was a kid. The amount of work and effort that would go into a simple product shoot would astound most photographers today. Entire batch lots of film had to be reserved, tested and calibrated with the darkroom to ensure accurate color rendition. Then you shot the products on the preferred batch of film, with your assistants processing and proofing like mad-men to ensure that lighting and etc. were spot because no one wanted the client coming back complaining that the red dress in the ad was not the color of the red dress on the table. After each shoot, you went through the whole process again for the next shoot because you had to calibrate for a new batch of film stock. It is just too easy today.

I love photography and have for years. Been in the art for over 25 years, and I intend to start making a greater proportion of my income from photography over the next few years. But I am under no illusion that talent and creativity will ensure my success. And one thing you can bet the farm on, I will not be competing on price. In fact, good chance I will be one of most expense photographers in Sydney. In the meantime, I am having heaps of fun.

And that is why most of us are here, we love taking pictures. And if there is one thing I have learned in my short life, if you take the thing that you love the most and make it your profession, more times than not, you will end up hating it. So consider that very carefully, before you even think about a business plan. Do you want your photography to become work, because it will. When bills are rolling in, you have to produce those images whether you feel like it or not, and that takes the joy out of it very quickly.

I have not taken the time to proof-read this post for spelling and grammar.

Thanks,
 
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There is soo much good info from all sides in this thread...

But with digital age and everyone trying to break through it's hard to find the niche that you can capitalize on, but we all keep trying to find ways to set ourselves apart from everyone else, &/or we come back to the Cafe & get humbled by our "inadequacies" compared to the skills of those around us.

Kim :


I don't think that it's quite as bad as finding "inadequacies", in all honesty. People have different skill sets, and where one person excels in a given area, they are not perhaps as good in others.

A friend asked me to get some headshots today to use with a new job. I'm not a portrait photographer - I can muddle through, but I know that I'm not in Woody's (CzechMan1) class of people shooting. Fair enough - I'm not so sure he'd like doing forensic photography on a gruesome fatality (and good for him to shoot the lovely living, I say !). I still went out and did my very best to photographically capture the beauty of my friend in a way that she will enjoy, even if I'm not Hurrell, Vondracek, or Newton.

Knowing that one can do better isn't inadequacy, it's a goal for a photographer to aspire to in their art. Reading comments by some of the greatest photographers, each has expressed a desire to be able to shoot like some other photographer on occasion. What sets the great photographers apart isn't just technical skill or having a popular idea, but that they bring distinctiveness to their art in a way that captures viewer's eyes.

But distinctiveness is something that each of us can cultivate and build upon. Will be sufficient for each of us to become great full-time professionals ? Possibly not, but that journey is a fair part of the reward for each of us in photography, a journey that many people never even begin the first step along. Goodness knows, the percentage of people who succeed is higher in those who've striven to excel than those who just pop off photos randomly.

And that's my hope on every single day that I take photographs, that I can try to excel, even if for just one photo that day, and move closer to my own success, a journey that I hope will never end.




John P.
 
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So, the statement that $10,000 is required to start a photography business is very misleading in my opinion.

How can you say that after you just added up your dslr entry costs? If you add a backup camera, lighting gear, and a couple of pro zoom event lens to your kit, you'll have come dangerously close to the 10K mark, my friend... but I won't tell Joellen if you don't tell Nancy. :wink:
 
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And that is why most of us are here, we love taking pictures. And if there is one thing I have learned in my short life, if you take the thing that you love the most and make it your profession, more times than not, you will end up hating it. So consider that very carefully, before you even think about a business plan. Do you want your photography to become work, because it will. When bills are rolling in, you have to produce those images whether you feel like it or not, and that takes the joy out of it very quickly.

Lynn :


Some excellent points on the "cottage industry" side of photography. I suppose that I'm considering being a fulltime professional as making a fairly comfortable living at photography, without the need for supplemental income from a "day job", which then pulls my comments around a more traditional business model. And even then, the points that I raised earlier in the thread about business licenses, sales taxes (VAT for the rest of the world), and so forth apply whether one is in a dedicated office space or working from their spare bedroom at home.

As for the issues of making a hobby into a business, those, too, are fine points that you've posted. I'm in the odd position that I was working with the camera in my job when I was little more than a snapshot hobbyist, and learned the craft through my work, only later to have some hobby shooting arise.

And my hobby shooting is wholly removed from my work shooting. I don't try to sell my wildlife and landscape photos - I actually give them away for the most part - and my work related photos never see the internet or publications because of the confidential/proprietary nature of the facilities where I work. There's very much a firewall between these areas. Even then, I do sometimes find myself blocked on the hobby side as I related in a thread a couple of weeks back called ...through a lens, darkly .

Interesting thread that we've collectively spun here on business and photography, eh ? I wonder where it will go next...



John P.
 
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