Being a business owner has both its perks and struggles. I don't think I have felt "relieved" in all my 6 years of owning my business. I never gotten that sense of true freedom. Quite frankly, there are times a week where I wish I was just doing a 9-5 gig and I could leave my work at work instead of taking it home with me.
One of the biggest problems we face, in both in life and business, is debt. Debt is such a bad thing and can really turn you into a totally different person.
I tried my best to stay out of debt for my business. I always wanted to have cash on hand to pay for new gear, client albums, prints, etc... However, the nature of our business (especially in Buffalo) is pretty unreliable. Our long winters and crummy weather makes the wedding season short and jam packed! If I was in California then at least weddings could take place all year round... This means that I have a lot less time to cram in a yearly salary. Debt was something that could have easily crept up on me to cover the slow down times and whatnot. If you are a better photographer than you are a business owner then I totally see how the camera manufacturers and photography magazines can really drive up your "wish list" of gear! Do you need an $8,000 camera??? No, do you want one, YES! If you suck it up and keep your money from burning a hole in your pocket then you will be better off than most up-and-coming professional photographers in your area. The sooner you realize that you are not one of the handful of celebrity professional photographers the better you will be! These few lucky individuals get cameras, lenses and software handed to them to try and use. It's great to shoot for the stars and try to become them one day but face the facts... There are a million other photographers better than you and I who have a bigger following than we can ever imagine so just worry about feeding you and your family first... Nikon and Canon will find you if you are worth something to them. If you are photographing the best you possibly can and are always pushing yourself to the limits then your business will succeed. If you are lucky then someone will notice. Don't get your hopes up.
You also need to get paid if you want to make your business work. My first year or two was a real learning experience because I made just enough to cover my clients albums and products and had enough cash left over to upgrade some camera equipment (thank you photo magazines!). Good thing I had a 9-5 job to fall back on because that would have been pretty really to have made a living on only a couple thousand dollars profit.
Professionals say that it takes anywhere from 3-5 years for your business to start making money... That shouldn't mean that it should take you 3 to 5 years to make money either! You need to get paid! All that these professionals (business professionals and CPAs) are saying is that businesses incur start-up costs and debt which can take roughly 3 to 5 years to pay off in order for your company to be profitable. This has nothing to do with you because you need to make money today... NOT in 3-5 years.
So be sure to price your photography so that you can make money after all your time and effort. I recommend dividing your earnings into three sections. Make 1/3 of the fee cover all expenditures for your client such as wedding albums, prints, canvases, marketing materials, etc... Make the next 1/3 cover any camera equipment, computer equipment that you may need, want or have to upgrade. The last 1/3 will be your profits that go directly to yourself. I do recommend investing some money in learning and education. Do your research and attend a photography seminar or two. Make it beneficial and attend one where you can build your portfolio so find workshops that allow you to shoot. Plus you will probably pick up a lot of helpful pointers that can help you and your business succeed.
If you charge $1,000 for your photography then first smack yourself and then chop up the money you made... Put $333 to cover client products, $333 to cover new camera gear and then pocket the remaining $334. If the client is a shoot-and-burn client then you will obviously have a lot less tangible items to have to purchase (a DVD and CD case) so all that money in the client products can be divided up however you want.
The biggest problem that new business owners don't understand is that you technically need to make double what you "actually" want to make. If you would like health insurance, retirement plan, etc... then you, as a business, need to front that. If it's your goal to make $50,0000 a year as a photographer then you will NEED to make $100,000 a year to cover your insurance, 401k and more.
It's fairly easy to gross $50,000 as a photographer but good luck trying to gross $100,000 at it!!! If you can do this then you are doing something REALLY right! Well done!
This article isn't meant for me to be a Debbie Downer on you. It is a realistic post about what it takes to be a profitable business owner. Don't fall into traps, keep your money in your hands and keep satisfying your clients above and beyond the call of duty and you will be good to go.
Thanks for stopping by,
Michael
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