The Business of Photography: Basics
As a photographer, your principle responsibility is to make (not take) great images. In theory, the better photographer you are, the more bookings you have, the more your business grows.
Unlike most entrepreneurial endeavors, professional photographers often find themselves working backwards. In most cases, an entrepreneur invents a product or establishes a service that is in demand, such as a more efficient technology, or a coffee shop in a neighborhood that doesn’t have one. Then, an entrepreneur would calculate the total cost of production, manufacturing, marketing, promotion, return investment, etc. to judge and weigh their business decisions and business operations. The reason why many photographers find themselves at a disadvantage in relation to other entrepreneurs is because many photographers first practiced photography as a hobby before entering the professional market. So why is this problematic?
Well, if you’re a photographer you’ve probably been approached by a client asking you take portraits or family photos. But how do you calculate how much to charge? Most photographers – myself included – never established a business plan. This is absolutely necessary. If you want to be a successful photographer, you need to have a business plan. Simply put, a business plan is like a road map. Without it, how can you get to your destination if you don’t know where you’re going? Without a business plan, your photography business is destined to fail.
As a practicing photographer, you need to be competent of the industry standards and benchmarks. Ask yourself, ‘What are the top performers doing?’. Do you even know who the top performers are? In what area of photography will you be competing? Understanding the answers to these questions and the industry benchmarks will help guide photographers in their business model as they compare themselves against the industry and to past performance.
Next, consider establishing a business identity. As a photographer, it’s very important that you separate your personal ID from your business ID, and you can do this in more ways than one. For example, consider creating a professional email separate from your personal email. Keeping your inboxes separated and clutter free will definitely help your business in the long run. Also consider establishing a sperate bank account for your business expenses. Separating your finances will be easier for you to examine how much money is coming in and going out of your business account, and ultimately your financial organization will benefit you, especially when it comes time to do taxes.
On the topic of taxes and your photography business, consider working with a tax or managerial accountant. Both perform different tasks, so be sure to research the difference between the two. Also keep in mind that you as a photographer should consider outstanding liabilities when establishing your separate bank account(s). Under the umbrella of outstanding liabilities, you should consider such items as state sales tax. This tax varies from state to state (8.25% in TX), and it’s something that you need to be charging on any products or services you sell. In most cases, sales tax will apply to portrait, wedding, and other noncommercial photography.
During your search for an accountant, you should also be searching to higher a lawyer. As a photographer you want to protect yourself and your business. While most people avoid lawyers unless pursuing or summoned to litigation, attorneys generally provide other services that can undoubtedly benefit photographers and their businesses. As a tip, ask other industry professionals who they use for legal questions and concerns. As a general practice, garnishing references from industry professionals who can vouch for legal representation on issues they’ve been involved with will typically always yield better results than a phone book or Google. It helps to know that the lawyer you’re working with has a specific understanding of your industry and that his intent is to help protect you. In most cases, the lawyer will work closely with your accountant to help establish the best business practices for you to keep your business successful and to keep you out of court. More specifically however, a lawyer can help review the terms and language of the legal contracts and model releases that your clients are signing. For example, do your contracts include a cancelation policy? Is the client’s deposit refundable? Etc., etc. There are many, many things to consider in legal contracts, and a lawyer can help your navigate the appropriate route to making binding legal documents. Next, speak with your attorney about the laws of copyright. Under most circumstances, photographers should never, ever release or sell the copyright to their photos. If you sell the copyright of the image, the photograph is no longer yours. Instead, photographers should – whenever possible – opt to sell or license the use of their images.
Regarding insurance, all business photographers eventually need to consider applicable policies. Most popular among business photographers are liability and disability insurance. Liability insurance serves to protect photographers against such things as errors and omissions, including lawsuits due to negligence, lost media, etc. Disability insurance will serve to benefit the photographer if they ever become sick or ill. There are many different types of policies available for professional photographers, and they need to be examined closely.
In addition to being a good photographer, you also need to be a good manager of your business. As a manager, you’re responsible for several key elements that will keep your business running smoothly. Among these responsibilities include content production and delivery, sales, calendar management, finances, marketing (tracking and response), clients that book, workflow, files, and numerous other considerations. In your role as manager you should always have goals that you set, but among them should include – at minimum – a consistent and repeatable process. The consistent and repeatable output of high quality work and good management practices will reflect on your business and client experience. Conversely, bad managerial practices will also reflect, so always keep the image of yourself and your business at the forefront of your mind when managing your company.
Ideally you’ve hired a lawyer and managerial accountant, set yourself up as a legal establishment (e.g. an ‘LLC’), established a business identity, developed a business plan, and researched local, state, and federal zoning laws and requirements for running your business whether its out of your home or in a commercial space.