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photography business

by Jen Bilodeau, Clickin Moms Mentor

1 0 STE PS TO H E L P YO U L AUN C H YO UR PHOTO GR A PHY BUS I NES S | JEN BI LO D EAU

Taking better photographs is a mix of your personal growth, artistic vision, and technical skill development. Photography is a journey in lifelong learning. There is always something new to learn — that’s what I love the most about photography!

When I began my photography journey 6 years ago with a Nikon D3100 and a kit zoom, I didn’t know how to take better photographs. All I knew is that I wanted to take better photographs. Like any good list maker, I created a 3-page, double-sided list of all the photography words I didn’t understand so that I could remember what I needed to learn. What I didn’t know was how all of the items fit together to create a photograph, and which steps I needed to take before the next. I was super ready to Google my way through photography.

Luckily, that’s when I came across the Clickin Moms community and found hundreds (now thousands!) of tutorials that pushed me to become the photographer I am today. Not long after, I became a Lifetime Member and I haven’t looked back since! I imagine that some of you are on a similar journey, amazed by all the learning this art has to offer and all the tools and resources at your fingertips.

This guide will help you through some of the ways you can become a better photographer and take better photographs, no matter what your genre.

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Step 1: Building Your Portfolio Clients need to know what to expect when they hire you. So, before you begin building your portfolio, you have to first zero on in on what it is you long to create for your clients. What do you want your clients to feel when they look through your portfolio? How will this translate into the images you will capture for them when they hire you?

You probably already have a good idea of your own style. Even if you’ve never sat down and really thought about your style or your voice, it’s there, spelled out before you in the light, color and composition of your best work. Before you open your business, you need to zero in on that style and truly define it.

Clients will expect consistency in both your processing style and your voice. You need to be able to maintain this consistency under varying elements, potentially difficult children, frustrated parents and uncertain environments. This is where portfolio building comes into play.

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There are many ways to build your portfolio.

Here are just a few: Put out a model call. You can offer to waive the session fee (and maybe also include a few free digital files) for clients in exchange for use of their images on your website. With a model call, the pressure is off when you are shooting because the client has not committed a financial investment. They only buy if they are happy. And you know that with anything good you shoot, you will be able to use it in your promotional materials.

Host a mini session event. Mini sessions can be a great way to get your name out there and really do a lot of shooting. However, mini sessions also have significant drawbacks. Often you don’t spend enough time with each client to really settle into the session and get to the point where the real magic happens. In addition, mini sessions can be a lot of work for very little money.

Act as a second shooter. This is an excellent approach if you hope to be a wedding photographer. Just ensure that you are able to use the images you take in your portfolio.

Photograph your own children. Oftentimes this is when we are really in the zone and feeling confident with our photography. Just be sure that if you are planning to use photos of your children in your portfolio that you are photographing them in a way that represents the client work you hope to create.

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Step 2: Define Your Target Client Before you really get going, you need to figure out where you are headed. Defining your target client creates a road map for all of the decisions you make after this point - branding, marketing, products, etc.

So start by asking yourself, each of these questions: • What do you want to shoot? What genre? What style?

• Who is your ideal client?

• Does your lifestyle (e.g. having small children at home) and financial situation (e.g. wedding & commercial photographers earn more than family photographers) support this type of work?

• Does the market around you have opportunity for you to shoot the way you desire to? Is there a demand for your shooting style?

It’s important not to try and specialize in everything. Know what you are good at, what you are passionate about, and what you can manage from a time and financial perspective and go with that.

Don’t be a “jack of all trades”, be a specialist.

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Step 3: Write Your Mission Statement The Mission Statement is arguably the most important piece of

EXAMPLE:

information about your business. It defines who you are, what

Jen is a featured Massachusetts based, lifestyle

you value and what your goals are. Your mission statement is your compass that helps guide you through every step of this journey. In addition, your mission statement can help your clients understand who you are and what you stand for in a matter of seconds.

Your mission statement can be anything…..but keep the following guidelines in mind:

family photographer. Through her artistic use of light and shadow, and her commitment to capturing authentic organic moments, Jen creates beautifully timeless and powerful imagery.

Jen is also a CPA and enjoys mentoring fellow photographers to help them take their business

• It should be brief

to the next level. Across all areas of her work, Jen

• It should be powerful

strives to capture honest, emotive and timeless

• It should be timeless

images that artfully preserve today's moments

• It should be attainable

that matter.

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Step 4: Determine Your Business Structure The next step is to determine how you will structure your business. The primary business structures available to a single owner business are: Sole Proprietor, LLC and S Corporation. It may be best to consult a local attorney and/or a CPA when selecting your business structure.

Some questions you need to ask yourself before determining your structure include: • Who will be involved?

• Who will manage the business?

• What do you consider to be the risks involved with your business?

• Will you have any outside investors

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Sole Proprietor

Limited Liability Corporation (LLC)

S Corporations

A sole proprietor is a type of business

If the thought of being personally liable for

An S Corp allows for the same limited

entity that is owned and run by one

the debts and obligations of your business

liability of a corporation or an LLC. There

person. No one else has the right to

keeps you up at night, you may want to

are strict requirements for formation of

participate in the management of the

consider structuring your business as an

an S Corp. An S Corp must file Articles of

company. There is no legal distinction

LLC. An LLC provides:

Incorporation and must file an election of

between the owner and the business.

The benefit of this type structure is its SIMPLICITY.

• The tax benefits of a sole proprietor or partnership and the protection of limited liability, as with a corporation

• No requirements for formation

• All states allow single-member LLCs

• No formalities for operation

• More flexibility than a corporation and

• No government license required (your may be required by your state to get a business license or to file a fictitious name (DBA) • Income and losses are included on owner’s personal tax return The business of a sole proprietor has no legal existence beyond the owner.

Accordingly, the risk to this type of business structure is that the is owner is personally liable for debts and obligations of the business.

ADVANTAGE: Simplicity; No “double taxation” (income is reported on your individual tax return) DISADVANTAGE: Owner personally liable to debts and obligations of the business

with fewer formalities

Subchapter S with the IRS. Taxation varies by state (some charge the entity an income or franchise tax), but for most locations, the greatest benefit to being an S Corp over a standard corporation is the profits are “passed through” to shareholders directly as in

To become an LLC, you typically must do

a partnership. So you get the benefits

the following (exact requirements vary

of a corporate structure without the

state-by-state):

disadvantage of double taxation

• File a Certificate of Organization with

ADVANTAGE: Shareholders not

your state. Typically, this can be done

personally responsible for the debt,

online.

obligations or liabilities of the organization.

• Appoint a Registered Agent. A registered agent is a person or business nominated by your company to officially receive and send papers on your behalf.

• Some states require you to draft an Operating Agreement. An Operating Agreement is a legal document outlining the ownership and operating procedures of your LLC. • Pay the required filing fee to the state (e.g. this is $500 in Massachusetts) plus annual fees.

A single member LLC is generally not treated as a separate entity for tax purposes. Accordingly you would file a Schedule C with your 1040 personal tax return.

ADVANTAGE: You are not personally liable for the debts and obligations of the business. You can elect your tax treatment.

DISADVANTAGE: Not as simple or inexpensive to set up as a Sole Proprietor.

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Can help you reduce your Self Employment tax burden because you can pay yourself a salary as an “employee” of the company.

DISADVANTAGE: This is a very complicated business structure to set up and maintain and should only be considered if you are earning considerable income.

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Step 5: Registering with the Government Now that you have set up the structure of your business, you must register it with the government to obtain your Employer Identification Number (EIN). An EIN is like a social security number for a business.

If you are set up as an LLC, you are required to get an EIN. A sole proprietor who does not have any employees is not required to obtain an EIN. In this instance, you could use your Social Security number as your taxpayer identification number.

Regardless of your business structure, it’s recommended that you obtain an EIN so you can do the following: • Open a bank account in the name of your business; • Apply for a credit card in the name of your business; • Apply for business permits; or • Furnish independent contractors a Form 1099 (which may be required if you frequently use a second shooter. This is heavy accounting stuff and one for which you likely need a CPA for).

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1 0 STE PS TO H E L P YO U L AUN C H YO UR PHOTO GR A PHY BUS I NES S | JEN BI LO D EAU

Applying for an EIN is free and easy on the IRS website.

If you structure your business as a limited-liability company (LLC), a corporation or an S Corp, you likely need to register your business with your state. If you establish your business as a sole proprietorship, you typically you are not required to register your business at the state level, however, many states require sole proprietors to use their own name for the business name unless they formally file another name. This is known as a your “Doing Business As” (DBA) name. If you are using anything other than your own name for the name of the business, be sure you understand your local DBA filing requirements.

You will also need to register your business with your local sales tax authority so that you can collect sales tax from your customers to remit to the state. Every state has a unique set of rules and requirements for business owners. Be sure to check with your state to see what your specific filing requirements are. Most states have helpful sites for new business owners to help you get are up and running, because the faster you up earning money, the faster they get their sales and income taxes!

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Step 6: Registering with the Government Before you start taking clients (and purchasing expensive gear), you need to make sure you are properly insured. There are several types of insurance you will want to consider when setting up your policy.

• General Liability Insurance • Property Insurance • Professional Liability Insurance You will want to budget approximately $500-$900 annually for insurance, depending on coverage levels. When looking for insurance it can be helpful to start with a local company you may already have a relationship with first as it may be possible for you to get a discount on a business policy if you work with the same company that insures your home, your car, etc. Another option is The Professional Photographers Association (PPA). Membership to PPA is $300 a year, and as a member you may then purchase business insurance for an additional $350.

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General Liability Insurance

Professional Liability Insurance (aka Malpractice Insurance)

Every business, even if you are home-based, needs to

This covers legal defense and damages for failure to provide

have liability insurance. This covers both legal defense and

or for improperly rendering professional services. Your

damages if you, your products or your services cause or are

general liability policy does not provide this protection, so it

alleged to have caused Bodily Injury or Property Damage to

is important to understand the difference between the two,

a third party. This insurance also covers you during a shoot.

and you must confirm that the policy you purchase has both.

If your client trips over your camera bag, hurts themselves and wants to hold you responsible, liability insurance is your protection.

Disability Insurance It is important to have a plan in the event that you get hurt and are not able to work, especially if your business is your

Property Insurance

family’s sole source of income. As the business owner, you

This covers your camera gear, computer, etc., and it will

won’t receive workers compensation, so disability insurance

protect you in the event of fire, vandalism, theft, or

may be your only protection. If you have employees, your

other damage.

state may require that you purchase a workers compensation policy to cover them.

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Step 7: Step Up Your Contracts The next big step is to obtain or create your client agreements. It’s important to ensure you have set proper client expectations and legally protected yourself. There are several forms you will need: Portrait Agreement: This agreement outlines the basics

second shooter). As with clients, it is important to outline

such as session date, payment, cancellation policy, copyright,

expectations and policies so there are no misunderstandings.

expectation of performance, weather sickness or other

If you are paying this person more than $600 you will have

factors that could impact the session going as scheduled,

to issue them a 1099 (you will also need a W9 with EIN or

and any other business policies that you have. Without this,

SSN). Agreement should include at a minimum: Scope of

the expectations and policies of the relationship are not

work, fees, relationship, work product/project requirements,

defined which can lead to uncertainties and problems down

indemnification.

the road.

Print Release: If you sell digital files you need this

Model Release: This form is typically signed by the subject of

agreement. This informs the client of the rights they have

the photograph (or parent/legal guardian if they are a minor)

when using the files and any restrictions you have placed

giving the photographer permission to photograph, display

on use of the files. This is not a copyright release and it is

their photographs and use them in marketing promotions.

important to help your client understand that. This is a good

Independent Contractor Agreement: These agreements are imperative when pairing up with anyone in the business (i.e.

time to remind them of copyright laws, and it can also be a good opportunity to offer them suggestions on how they can print to ensure they print at the best quality available.

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Step 8: Determine Your Selling Model Before you set your pricing, it’s important to think about what you are going to sell and how you are going to sell it. There are two basic models most photographers choose from: Flat Rate Package Model or Session Fee + Products Model.

Flat Rate Package • The client pays a flat rate that includes the session fee, products and/or digital files.

• The benefits of this type of pricing model lies in its simplicity. You don’t have to worry about upselling your clients or negotiating. This can make the Flat Rate Package an attractive option for photographers who are just starting out.

• The downside to this pricing model is that it likely will limit your profit. The client will only purchase what is bundled into their package and there is little opportunity to upsell additional files and wall art.

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Session Fee + Products • Client pays a session fee that covers your time for the shooting and any pre-session work that you have done.

Prints, wall art and digital images are purchased separately on an a la carte approach or by offering several different “collections” that your client can choose from.

• The benefit of this type of pricing model is the opportunity for additional profit. Instead of limiting your sales to a set flat rate package, you can upsell your client beautiful wall art, albums, etc.

• The downside is that some people find it hard to sell and negotiate. It also adds additional complexities with order management, and it will take more time to complete each order.

• This is the preferred model for long-time successful photographers, and most agree that the benefits outweigh the costs in using this type of selling model.

So, think about the following as you evaluate your selling model: • What is your business model goal: Are you boutique or high volume? Where do you want to be in three years? Make sure you are on the right path TODAY for where you want to be in three years.

• What is your unique value proposition? What do you do better than others in your area? Are you positioning your business in accordance with this?

• What products best showcase your work and speak to your brand?

• How do you plan to sell to your clients? Online sales? In-person sales? In-Person sales is a very effective way of selling to your clients, and is often the preferred method for photographers who price using the Session Fee + Products approach.

Photographers who use this approach believe that this is the optimal approach to maximize profits. If you are not ready for In-Person sales, you can still show your clients your products. Take images of everything you offer and create an ordering guide that showcases your products and walks clients through the ordering process.

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Step 9: Establish Your Pricing Perhaps the most difficult step in starting your business is establishing your pricing structure. Price yourself too high and people may turn away. Price too low and you leave money on the table. A conservative pricing shortcut that I like to keep in mind is:

For every dollar that you earn, you can assume that approximately 1/3 will go towards taxes, 1/3 to cover your expenses and 1/3 will be income.

So now the big question is: how do you determine what your work is worth?

Begin by performing a high-level calculation to determine the minimum earnings you will need from each session.

1. Start by determining your total earnings goal: What do you need to put into your pocket to make this business work for you?

2. Then ask yourself how many sessions you think you can do in a year. To determine this, you will need to first decide how many hours you can contribute to your business per week, and then you need to calculate how many hours you will invest in each job. Photographers typically spend 12-18 hours per job depending on service model.

3. Once you know how many hours you can contribute and how many hours it will take for you to complete each job, determine how many jobs you can do per year.

4. The next step is to calculate the average earnings per session you will need to hit your earnings goal.

5. Finally, convert your earnings per session into your sales goal so that you can cover all of your expenses and taxes. clickinmoms.com

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For example, let’s assume my earnings goal (the amount of money I want to put in my pocket after expenses and taxes) is $30,000. If I can contribute 20 hours a week to my business, and I estimate it will take 15 hours to do each job, then I can do about 5 jobs per month.

20 hours per week x 4 weeks per month = 80 hours/month 80 hours per month/15 hours per job = approximately 5 sessions per month If know that I can handle a volume of 5 sessions a month, then I can aim for a volume of approximately 60 sessions per year.

5 sessions/month x 12 months = 60 sessions per year Please note: In many areas, it is not possible to shoot at your desired volume year-round due to weather and other environmental and seasonal factors. You must adjust this number for reasonableness as necessary before continuing with the calculation.

If my earnings goal is $30,000 a year and based on the prior calculation and I estimate I can do 60 sessions a year, then my average earnings from each sessions need to be approximately $650. $30,000 earnings goal / 60 sessions = $500 earnings goal per session Once I know this, I know that regardless of the pricing structure I choose, I need to be sure that I earn at least $500 per session to meet my goal.

In our example, if my salary goal is $30,000, and using the assumption that I will take home ⅓ of my sales as earnings after expenses and taxes, I need to multiply this by 3 to get my target sales goal, which brings us to a $90,000 sales goal. $30,000 x 3 = $90,000 I then divide this sales goal by my estimated number of sessions per year to get my target sales per session. $90,000 / 60 sessions = $1,500 You can see how quickly our target earnings of $30,000 has resulted in what may feel like a pretty substantial per session earnings!

Proper pricing is essential to ensuring the long-term success of your business. This calculation is just a high-level pricing analysis. A thorough analysis starts from the bottom, analyzing direct overhead costs, and works upward towards your target pricing structure. This is why understanding and managing all components of your cost structure is critical. If you fail to properly account for your costs, and don’t pay yourself enough, your business will not be sustainable.

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Step 10: Paying Your Taxes Tax time can be intimidating for the small business owner. You want to be sure you are following complex regulations properly, all while minimizing your tax burden as much as possible. Knowing the basics and being prepared can take a lot of the stress out of tax season.

Federal Taxes Federal taxes are due by April 15th of the following year. How you file and pay your federal taxes will depend on your business structure. If you are a sole proprietor or a Limited Liability Company (LLC), you will file your business taxes at the same time you file your personal income tax return. Your business income and expenses are reported on the 1040 Schedule C. If you are profitable and anticipate that you will owe taxes at the end of the year, you must file a 1040-ES with your estimated income tax payment quarterly. The government can penalize you if you wait until the end of the year to pay all of your taxes due. This “pay as you go” approach is also helpful, so you don’t trick yourself into thinking you have more cash than you do.

Your accountant can help you calculate your estimated taxes. If you are calculating them on your own, just remember that if you are filing jointly with your spouse, the tax rate for your business will be the marginal tax rate for your combined family income.

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State Taxes You will need to register your business to collect sales taxes in any state that you have a significant business presence in. Most business owners are registered in only one state, although someone living in Massachusetts, for example, may be registered in more than one state due to their proximity to state lines. Sales tax can be filed online very quickly and easily as long as your books are in order. It will take a few minutes to register initially, but most states let you link your business bank account to your sales tax account with the Department of Revenue which makes paying taxes in subsequent quarters relatively quick and painless. In most states, sales taxes are due within the first two weeks of the new quarter (April, July, October, January).

State tax rates and rules vary state by state (and, in some areas, even by city), so it is important to check with your Department of Revenue to ensure you fully understand your tax requirements. Sales tax rates vary from 0 to almost 8% depending on the states you operate in, and every state has different laws regarding sales tax, especially when it comes to the taxing of digital goods. Be sure to check your local requirements to ensure you are properly charging sales tax to your clients.

Self-Employment Tax It’s important not to forget about the selfemployment tax. Self-employment tax is 15.3% of your total pre-tax profit (12.4% for Social Security and 2.9% for Medicare). You will pay this tax when you file your federal tax return.

The self-employment tax covers your portion of Medicare and Social Security. When you work for someone else, your employer pays half of this tax, but when you own your own business, you are responsible for the full 15.3%.

When filing your tax return, half of your self-employment tax paid is deducted as an adjustment against your gross income, however this does not affect the amount you must pay to the government. There is no way out of the 15.3% if you are selfemployed. Even if your business is part-time, and it may not even be your primary source of income, you still owe the government 15.3% of your pre-tax profits. As painful as this tax is, consider self-employment tax a cost of doing business and be sure to factor it into your rates and fees.

If you are going to do your own taxes, make sure you are comfortable working through the forms that are required for your business. Turbo Tax, or any similar program, is great and walks you through filing your state and federal taxes step by step.

When filing your own tax return, having tight and organized records is a must. You need to be able to categorize your expenses into the proper buckets and provide all of the necessary details on any equipment purchases you made during the year.

If you are not fully comfortable managing this on your own, it may be best to hire a tax professional. A professional will know exactly what you will need in order to file and what write-offs you can include. clickinmoms.com

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Time To Make It Happen Of course, there’s more to starting a business than I have outlined here. Among other things, will also need to obtain a bookkeeping system, set up your bank accounts, develop your website, establish your branding, and write a marketing plan and grand opening strategy. You must also set goals and hold yourself accountable. However, the basics we’ve just covered will help you to build the backbone of your business, allowing you to take the first steps towards creating your dream job. An exciting journey lies ahead of you, now go out and get it!

Looking to learn more about starting your business?

With an entire section on our forum dedicated just for those in business or thinking about starting a business, we can help! From our library of business tutorials to being able to seek advice from other professions, to a place where you can simply ask your questions, we've got answers for you! Come join us at clickinmoms.com.

Jen Bilodeau Jen is a featured Massachusetts based, lifestyle family and commercial photographer. Through her artistic use of light and shadow, and her commitment to capturing authentic, organic moments, Jen creates beautifully timeless and powerful imagery. Jen is also a CPA and a Click Photo School Instructor, teaching The Profitable Photographer: Your Guide To Sustainable Pricing, and What Lies Within: Creating Images With Depth & Emotion. She is also a member of Clickin Moms and is a Clickin Moms Mentor.

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