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5 Important Things You Must-Have Before Starting A Photography Business

By Hanssie on April 5th 2016

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.

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.

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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.

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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.

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4. Insurance

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.

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5. Contracts

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.

[REWIND: COPYRIGHT INFRINGEMENT PROBLEM PLAGUES OUR COMMUNITY | ADVICE ON HOW TO DEAL]

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.

About

Hanssie is a Southern California-based writer and sometimes portrait and wedding photographer. In her free time, she homeschools, works out, rescues dogs and works in marketing for SLR Lounge. She also blogs about her adventures and about fitness when she’s not sick of writing so much. Check out her work and her blog at www.hanssie.com and www.fittedmagazine.com. Follow her on Instagram. Email her at:
[email protected]

25 Comments

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  1. Gareth Wignall

    90% Business, 9% Self Doubt and 1% Photography… or something like that :-)

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  2. Geert Peeters

    Great advice!

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  3. Lee Hawkins

    Great essential advice that exposes you to the paperwork it takes to actually run a business! I went without insurance for a couple of years and then got a client that required it…I have definitely slept better and taken a couple of risks with my camera that I might have thought twice about since (like shooting on a small boat).

    I will say it is *critical* to investigate the business laws of each and every state and that you really need to get an attorney who is licensed to practice in yours. Ohio laws are quite a bit different from California—you don’t need a license, and local laws aren’t that restrictive. If you sell tangible goods (which do not for now include digital files delivered electronically) then you need a vendors license from the state, and getting one is very easy and very cheap (and lasts for several years) at the Ohio Business Gateway. You register for a trade name/DBA/LLC and you can set up a corporation pretty easily there too if you want one (which you’ll need for a bank account in your business name). Reporting sales tax is simple, but the laws are convoluted as to what is taxed, every county has its own rate, and the specific laws regarding photography haven’t been updated since 1976!!! And if you ever thought federal or state income taxes were hard, then you’ve never dealt with local school district and especially city income taxes that you may have to pay not only in the place where you live, but also in the place(s) where you work…some give you credit for other places you’ve paid, some don’t, and they expect you to make estimated payments on the 1-2% that you may or may not owe. The sales tax and local income taxes alone are reason enough to scream for an accountant, and many don’t understand creative businesses and intellectual property and so it can take a while to find someone who is a good fit for you.

    Also, there are little nuances of law…for example, in many states you can take a claim up to $5000 to small claims court, but in Ohio it’s only up to $3000. There are other caveats…and you and your lawyer both need to understand copyright, privacy, publicity, and intellectual property laws to make a solid contract that is actually enforceable in your state and possibly even federal court (for copyright infringement), so finding a lawyer is not always easy either.

    But these are the realities of business—all 50 states are like little countries and you have to operate in your state and any other states you work in under their laws or you may end up paying fines and penalties, or you could have a lawsuit go very badly for you because your contract wasn’t as robust as you thought. And if you don’t have all your legal ducks in a row, you will look less legit to clients, and you can be out of business and owe more than you’ve ever made.

    Thanks for helping more people understand that!!!

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    • Hanssie

      You’re right! The rules and regulations for starting a small business vary so often that it is wise to consult an attorney for your specific needs. Thanks for providing input on Ohio rules – I love California, but man, I sure pay – in every way – to live here :)

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    • Lee Hawkins

      Ohio may be a lot lower in certain costs, but TRUST ME, you do NOT want to mess with RITA (Regional Income Tax Agency) in Ohio…she is WAY WAY meaner than Uncle Sam LOL!

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    • Andy & Amii Kauth

      Doing your research is key.

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    • Lee Hawkins

      Or finding and hiring the right professionals (ask for referrals!!! pay for them if you have to! I did!). It saves you so much time and stress when you pay good people to take care of some things for you. I used to pay next to nothing to prepare and e-file my own taxes…now I pay $400 or more a year for a CPA to advise me on my bookkeeping and to prepare my taxes and it’s so much easier than trying to figure this junk out for myself. Especially when you throw local income taxes into the mix, which some states are blessed not to have!

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  4. Rafael Steffen

    Great article. Thanks for sharing all the small but important details on becoming a Pro.

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  5. Jeff Tittsworth

    “You have to have a business license to operate a photography business, no matter what state/city you live in” This is just completely false information.

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    • Hanssie

      Hey Jeff,

      You’re right! Sometimes I see things too much through the eyes of California laws (even after research). It has been amended within the article. Thanks for keeping me honest :)

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  6. Harry Lim

    In Florida, if you do not deliver a physical product you do not need to collect sales tax. So no tax permit would be required.

    You also do not need a business license as a sole proprietor with your name as the business name. In other words, as you pointed out, if you don’t need to register a fictitious name or a DBA and you are a sole proprietor, then you don’t need to register with the State Division of Corporations.

    As for income tax, you should estimate your quarterly taxes and submit them electronically to the Electronic Federal Tax Payment System at eftps.org. You have to register and set up a pin. If you make about the same every year, you can make 4 equal payments (April 15, June 15, Sept. 15 and Jan. 15) and at tax time figure out if you over or underpaid. Don’t forget to calculate the 15.3% self employment tax if you are self employed. A little work 4 times a year will save you a lot of tears and trouble at tax time.

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    • Hanssie

      Yes, I’ve been trying to do quarterly taxes for 4 years now…and somehow never get around to it. I seriously need to make it a priority.

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    • Harry Lim

      Sorry, that should be eftps.gov

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  7. Matthew Kirschner

    You forgot a camera!

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    • David Blanchard

      That’s probably because cameras are easy while bureaucracy is hard.

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    • Hanssie

      What he said^^^

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    • Matthew Kirschner

      I was more than happy to pay Legal Zoom to help me set it all up. It was just way too much to handle by yourself, as summed up pretty well in the article. Thanks for sharing your insight!

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    • Lee Hawkins

      I actually put together my own contracts and used the lawfirm in my state that is provided by my LegalShield membership to review everything. I paid absolutely nothing beyond my small monthly membership fee and actually talked to a great lawyer who is familiar with IP law and the photography industry. I’m not familiar with Legal Zoom’s offerings, but I’ve gotten a ton of mileage out of LegalShield over the last decade or so and wish I’d have known about them ages ago!

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  8. Max Karmazin

    Thanks. Useful information with a not that very common point of view.

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    • Hanssie

      It’s not the most sexy of topics but the logistics need to be in place…plus I just met with my accountant and I needed to share with everyone another year of IRS pain ;)

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  9. Justin Haugen

    I don’t see coffee on here

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    • Hanssie

      LOL. I skipped the coffee and went straight for the whiskey. Works faster; more fun.

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    • John Shen

      This sounds like a great idea. I have a bottle in my drawer. :)

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  10. Andy & Amii Kauth

    Totally agree on all these. We used to do our own taxes, but once we incorporated (S Corp), we had to find an accountant we liked and trusted. We also used a lawyer to help us set up our incorporation because we had no idea what we were doing (he actually cost about the same as Legal Zoom + he looked over our contract for no fee). Great write up!

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    • Hanssie

      I made the mistake of trying to do it on my own in the beginning and it took quite a while for the professionals to clean up my messes esp. in the accounting dept. Oh the joys of a small biz owner :)

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