Starting a Photography Business 101 - Step 2 - Handle the Paperwork
What I'm going to suggest is not difficult or very time consuming-but necessary. If I had a master's degree in business admin probably the first thing I'd tell you is to create a business plan. Is it necessary right now? I don't think so. Should you decide at some point to rent studio space or get an equipment loan, it'll be required; first things first.
The second biggest challenge for artists is establishing belief in our abilities and placing value on what we do. This step will take you a long way in that direction, so don't gloss over it-it's vital to your success.
Name That Tune.
Give your portrait business a name. This alone will boost your confidence. Change the message on your home and cell phone answering machines; "Hello you've reached Pete Peterson and Peterson's Portraiture. Sorry I can't take your call right now..."
And when your friends call and give you crap about the message-ignore them. Dream-stealers are everywhere. Our friends think we're great as long as we remain at their level of income, achievement, knowledge-or below. But try and get ahead and they'll ask why you're wasting your time with that baloney. "What, all of a sudden you think you're a photographer?" Damn straight you are.
When you introduce yourself you can confidently say, "My name is Pete Peterson and I own Peterson's Portraiture. I specialize in high school senior portraits." How much better than saying, "Hi I'm Pete, I can take some pictures for you, give you a good deal too."
What's in a name?
It would be my experience that the vast majority of portrait business owners choose a name that uses their own surname; i.e. Pete Peterson's Portraits or d. holmes meir studios. If you really think about it - using your own name as or in the name of your business is exactly what you shouldn't do.
If we are truly entrepreneurs interested in building a business that will generate profit - then our long range goal "should be" to build that business to a level where it can operate without us - and then sell it - hopefully at a handsome profit. That thought in mind if someone else is to eventually buy us out, take over and run the show - then Pete Peterson's Portraits is probably not a good choice. Something like Shutter Bug's or Perfect Portraits might be more saleable.
However, chances are good that many, if not most of us, don't consider ourselves hard-core entrepreneurs. We're starting a portrait business because we love taking beautiful pictures. We can't see far enough down the road to ever consider selling our studio. Additionally, portraits are a highly personal item and we will likely have a great deal of one on one contact with our clients. Using our name in the name of our studio lends a more personal touch that our clients will recognize.
Consider also that from this day forward - if you use your own name for your studio name - the two will become synonymous. If Pete Peterson gets a DWI it can reflect badly on Pete Peterson's Portraits.
Register Your Business Name.
The IRS will find you so don't try and hide. http://www.business.gov/register/business-name/dba.html is a link where you can learn more about the process. (Or just Google "business name registration") This again, is another inexpensive boost for your confidence. You're legally a business now. Don't worry about all the sole proprietorship or LLC or S corp. stuff right now. When you get to that point you'll want to hire an accountant to help you with those decisions.
Get a Federal Tax ID number.
After you register your name you'll need to get a tax ID number. Some states allow you to use your social security number so be sure and check the regulations where you live.
Get a State Sales Tax number.
You'll also need a sales tax number-if your state taxes photography. I can answer that question for Minnesota-Yes. You're on your own for the other 49 states;-) In Minnesota once your sales reach a certain level you're required to report and pay your sales tax monthly; under that level and you can pay it quarterly. Again, check the rules in your individual state. Here's an article you might find helpful: http://www.ehow.com/how_2002415_get-sales-taxnumber.html
Get a good accountant.
I am here to tell you that the "paper work reduction act" is BS! (I so badly wanted to spell that out - in bold with underlining and italics) It is absolutely ridiculous the number of forms you're required to consider when starting and running a business. Hence, the primary reason to retain the services of a good accountant.
I've known my accountant for many, many years and we're quasi-related. Not to mention we've hunted and fished together. The point is, find someone you trust and, in my opinion, someone conservative. No doubt there are CPA's out there who walk a fine line - someone who can save you hundreds of dollars on income and other taxes by stretching the limit on deductions, etc...
Saving a hundred or three here and there is great. The problem is when it comes to paying a fine for underpaid taxes or missed deadlines it comes out of your pocket not the accountants. Personally I'd rather be safe than sorry.
Much of the above may seem intimidating but it shouldn't be. It will take some thought and a few phone calls but once it's done it's done and you won't have to think about it again. Take care of it now before your business starts to blossom. Nothing will take the bloom off a rose quicker than a letter from the IRS.