You may be at a crossroads. Perhaps you’ve watched Photography 101 and Lighting 101 and 201 and have spent countless hours photographing your children and whoever you could get to pose for you. You are now wondering if you want to step foot in the small business arena and start that photography business everyone is telling you to start. DON’T DO IT! (Just kidding – sort of). Having people pay you to do something you love is an amazing thing, but the life of a small business owner can be a challenging and brutal place (especially on April 15th every year). That said, before I scare you off, owning your own photography business also has many rewards.
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Once you’ve made the decision to start a photography business, there are a few important things you need to have in place to legitimize it. Tempting as it may be, you can’t just create a logo in Photoshop Elements, print up some business cards from Vista Print and create a Wix website (though many do). If you want to be a legal and legitimate business, here are five things you need to do before you book that first client.
Before I begin, let me remind you that 1. I am not a lawyer and 2. every state and country has different laws and regulations. Do your research to ensure that you are within all the legal parameters of where you live.
1. BUSINESS STRUCTURE
When you set up your photography business, one thing you need to determine is your form of business. What you choose will have legal and tax implications, so be sure to do your research. Will you be classifying your business as a:
- Sole Proprietorship?
- A Partnership?
- A Corporation?
- An LLC (Limited Liability Corporation)?
- An S Corporation?
The most basic, and the one most people choose, is the sole proprietor. This is when you and you alone own the business and are responsible for all the liabilities and assets. Depending on your type of business, find the one that works best for you. The U.S. Small Business Association is a good starting point and gives information on each structure to help you decide.
2. Business License
Many states require licenses or permits to operate a business – check with your local city and county clerk to inquire about your specific state/city. In California and specifically the city I live in, require a business license which costs about $120 a year, even though it was much cheaper when I lived in a smaller city.
If I operated out of a studio or physical building I’d need various permits for zoning, fire safety, etc; If I’m running my business under a name not my own (example: Awesome-Sauce Photography), I’ll need to get a Fictitious Business Name (FBN) or Doing Business As (DBA) statement; If you have employees, there will be more permits, and you get the idea.
You can apply for all these permits at your local city hall. Each city/state may have different requirements, so be sure to do your due-diligence so you don’t miss anything.
3. Tax Permit/ Board of Equalization
Once a year, I have a good cry-fest with my accountant. Well, I’m the one crying when she tells me my tax bill and then bills me for her time. (On a side note, being a small business owner can be brutal come tax day, so it would be wise to hire an accountant to help you sort your taxes). Gone are the days when you can input a W-9 into Turbo Tax in three minutes and enjoy a refund.
Anyhow, when you offer products like albums or prints, you’re probably charging sales tax, so talk to your accountant about your pricing structures and what can and cannot be taxed on. It can get very confusing and varies by state, but in any case, you’ll need a tax permit from the State Board of Equalization. You can usually apply for this at your local city hall as well.
As with everything, there are a few different types of insurances to choose from and purchase. There’s insurance for your equipment; liability insurance, and if applicable, property insurance; disability insurance. and more. You may be tempted to skimp or skip this part, but don’t. You never know when your gear may take a dive into the ocean or stolen from your car. Many wedding venues require a minimum amount of insurance for you to shoot on their property, too.
There are a few different insurance options. I personally use Hill & Usher, who has a special package created for the needs of photographers and media professionals. Other popular choices are TCP & Co, PPA’s Photo Care, and HISCOX. Many of these companies are brokers and will write your policy through companies such as Hartford (Hill & Usher). I pay around $50-60 a month for my policy.
When getting insurance be sure you are clear on what is covered and what is not covered. Some policies won’t cover you internationally or other specific situations that we as photographers may face.
It’s a lawsuit-happy world these days, and you need to cover your ass(ets) as best you can. One way is through a solid contract, agreed upon and signed by both parties. Having a contract between you and whomever you photograph sets expectations and protects you and your subject. Ideally, you’ll want this document to stand up in court, and therefore, I recommend getting a lawyer or someone who is up-to-date on legal jargon to draw up your contracts.
Our own Michelle reviewed the Portrait Contract Bundle from The LawTog a while back and said they were great and easy to use. The LawTog is Rachel Brenke, who is a photographer with a law degree. She has many resources for all types of photographers, including contracts business planning tools, tax advice, and forms – everything you need to get your legal paperwork in order for your new photography business. Check her site out here. In honor of tax day, TheLawTog is also offering 15% off with the code tax15 – ends April 11th.
Making the decision to start a photography business is exciting and will take a lot of work. Be sure you get all your paperwork in order so that you start on the right foot.