Wednesday, October 3, 2012

How 'bout a JOB as a photographer?

Every so often in the forums we'll see a post that goes something like this:
I am currently enrolled in college for photography. When I get out I don't want to go into business, I just want to find a job. What's the outlook like?

My first answer is do some very basic, simple research. I know that's asking a bit much from some, so I did a little of  my own today.
I simply went to and in the Job Title/Keyword box I typed "Photographer."
 I set no paramaters or limits. Just a job in the USA with the word photographer either in the title. Guess what? There are 2,515 jobs in the US for a photographer or photographer assistant or similar.
Not one of those was within 300 miles of my door step. I might want to mention that many of them were minimum wage jobs for Picture Me! Portrait studios, Teddy Bear Portrait Studios, Sears and the like. Probably not worth getting a degree for, because they are NOT going to allow you the freedom to use your newly acquired skills. It's all set up for you, what you REALLY need to be is a salesman. Well, that and REALLY fast from start to finish.

Then just to compare I put a few other words in that Job Title/Keyword box. For an accountant there are 32,256 jobs nationwide. When I put Social Worker in there I got 26,720. Administrative Assistant 70,074. If I look at only the lowest of those numbers compared to photographer jobs the ratio is roughly 10:1. WOW.

According to THIS website's fun and interesting statistics for college students there are 1,750,000 college graduates per year. Let's apply that ratio to those graduates. That would guestimate (in no real scientific form) that there are 175,000 graduates in the photography field.

WHOA! That's some stiff competition for those 2,515 JOBS. Even after all of the minimum wage jobs are filled there are still 172,485 left out there looking for work or... well... something.

I am not trying to discourage you from looking for a photography JOB, but you probably should be a bit realistic about it. The jobs are few and far between. And the ones that pay more than minimum wage are even fewer.
There are still companies that hire a photographer to do their merchandising/website/catalog work if that is what you are interested in. There are still some that hire for high fashion, landscape, sports, etc. There are still a few staff positions at the newspapers as photographers. However, this is field is moving to a more freelance and self employed state of mind. Keep that in mind when you fill out your student loan applications!

Tuesday, October 2, 2012

Large Portrait Studios

Most of the information I am presenting isn't really aimed at the large studio, but I am sure it could be adapted and expanded. I just don't have any experience  to draw from here-I'm not a big studio. I am not really qualified to go in depth on the subject. HOWEVER, I don't want to skip it as an option.

 In the area I live in there are a couple of these. One stands out in my mind. To protect the innocent here let's call them Joe Miller Studios. I don't know a Joe Miller, or a Joe Miller studios but I am sure that there's at least one or two out there somewhere-this is not THAT Joe Miller.

Joe Miller Studios started out as Joe Miller "photographer" taking senior portraits. Evidently Joe had a dream somewhere and some business sense because now Joe Miller Studios is not just Joe himself taking photographs, but a few photographers who are photographing seniors. They are contracted with many of the high schools between 3 states to provide their senior portraits and they even do some of the underclassmen photos for a few. If you want your senior portrait in the yearbook for those schools you must have your photograph taken by Joe Miller Studios.

Joe Miller Studios sitting fee is usually cheap or at the right time free. They even come to the school and take yearbook shots for an insanely cheap price like $20 per person. They spend the day doing 15 minute appointments of the seniors and taking 3 to 5 basic headshots. One of which is the yearbook photo. You are under no obligation to purchase a thing from them, you only have to choose your yearbook photograph.

Now, if you did the math you figured out that it's only about $500 or so they are collecting for a day of doing this. So, how does Joe Miller Studios make money? Easy. When the "Mom On A Budget" looks at that $20 sitting fee compared to the other professional photographers around the quick math happens in her head: "$20 or $200? NO BRAINER!" Then when the proofs are ready and she sees her gorgeous daughter or handsome son in those photographs she has to purchase a few things. And of course she has to get a print for Grandma and Grandpa... and the other grandparents... And what senior doesn't demand 100 wallets to exchange with all of their frineds???

Joe Miller Studios print prices are a bit above the national average for an 8x10 from a studio. So, when MOAB orders herself an 8x10 along with the two sets of grand parents and the wallets that the senior MUST have for sharing she spends another $400. $420 for 15 minutes. Take out the studio's overhead and paying the hourly photographer AND photographer's assistant it's still a net of about $100 in Joe's pocket. Not bad for 15 minutes!

The profit margin is based on the volume they do. Of course there are people who take advantage of the free sessions if they HAPPEN to see one of  Joe's (not so prominently placed) advertisements. There are also those who pay the $20 session fee and not purchase a thing. But they are photographing as many as 32 kids in one day. The laws of probability are on Joe's side.

Joe Miller Studios also does full out senior sessions at their studio. Again these can range from FREE  if you catch one of those advertisements or $20 for 40 minutes of studio time and $35 for 80 minutes of studio time. Joe hires photographers who need little to no knowledge in how to actually set up the shot in camera or the studio lighting for a low hourly rate. The client comes to their location and has much a much more extensive set of photographs taken. The minimum package you can purchase is 2 "units" and it runs $65.
If the parents are sending their child for an actual portrait sitting chances are even more on Joe's side that they are going to purchase more than 2 "units" and probably some announcements, invitations and about 10 units of those blasted wallets that the kids NEED! That just bumped us back up around the $400 mark.

On the average studio's like Joe's have an overhead of about 60 to 70% give or take. We'll say Joe's overhead is more along the 70% range. In their busy season Joe has maybe 2 photographers working in the studio (one being Joe himself), and one out at the high schools doing those full day things.  Combined the 3 can photograph about 48 seniors. If each of those pays the $20 sitting fee plus a lowball figure of $300 in prints that's $15,360 a day gross. Take operating costs and overhead out of that and that's a possible NET to Joe of about $4500 PER DAY.

As of today Joe's website says he is contracted with 17 high schools that REQUIRE his studio take the photograph if the senior wants to be included in the yearbook.
There are another 16 schools that he is one of their "approved" photographers for their yearbook.
None of those are tiny schools by any means. Quite a few of those schools will have several hundred kids graduating this year. Joe is booked, overbooked and looking for spare time.
Joe's operating schedule is from 8 am to 4pm Monday, Wednesday, Friday and Saturday. 9 am to 8 pm on Tuesdays and Thursdays from June through August. No sessions at all in September through December and limited appointments from January through May. Joe has lots of time off!

Joe is looking at a possible $1.5 million dollars (give or take) in gross sales over his roughly 100 days of operation.  He's paying somewhere around 70% or more out in overhead. The amount that actually goes to Joe out of that possible $1.5 million dollars $400K give or take. THEN Joe has to pay his own taxes and insurance and retirement out of that. Joe's possible net is more like $300K or less.  It's still a lot, but if you think about the %? It's kind of painful to hand over more than  million take home less than half of what you pay everyone else. That is also his potential- give or take-based on my 'educated' experience.

Think about that on a smaller scale. If you had $100K in sales and turned over $70K of that to someone else while putting only $30K yourself you'd be somewhere close to tears. And poverty level. It works for the large portrait studios because of the volume they can produce in a very short time. Joe has it made by contracting with those schools for uniform yearbook images. He's got those seniors over a barrel. Many to possibly the majority don't know they can or bother to have another set of portraits taken elsewhere. Joe has it made. They're going to purchase a product from those images even if it's the minimum.

Joe has an office staff to handle the accounting, advertising, reception, bookkeeping, scheduling, phones, etc. He also has a retail location. Both the staff and the location are expensive costs. He also owns a lot more equipment, props and necessary furniture, computers, etc that a studio needs. Those also cost much more than they do for a small studio. Because of that Joe's overhead is more than it would be for a small studio with Joe as the only photographer.

Joe's income is based on that high volume output and managing his studio in a way that minimizes his costs. Notice how he only operates from June through July at full schedule? This is just an educated guess, but I'd lay money that he does that with his employees so that his liability for Unemployment Insurance is minimal as well as his requirements for benefits for those employees.

This particular studio is a specialized photographer with limited hours, however this scenario can be played out for any type of large volume studio with any hours.
If this is your goal you have to start thinking long term now. You may only start out as Joe Miller, Photographer, but the decisions you make now will make it much easier to become Joe Miller Studios down the road-by way of that darned planning thing. 

Pricing your Photography...

Not part of the theme this week, but I just ran across this from Senior-ologie and wanted to share! Looks like they're going to cover this topic every Tuesday and explore the many approaches to pricing  your photography.

Monday, October 1, 2012

Theme of the week: What kind of photographer will you be?

Pretty simple question, right? The answer can be pretty complex with a lot of little tangents to it.

Let's touch on just a few of the very broad possibilities here:
Large Studio...
Small Studio...
Sports Photographer
News Paper Photographer/Photojournalist
Wedding Photographer
On-Location Wedding Photographer
Portrait Photographer
Specialized Portrait Photographer
Travel Landscape and Tourism Photographer
Real Estate Photographer
Glamor/High Fashion Photographer
Boudoir Photographer
Pet Photographer
Commercial Photographer

I am pretty sure I missed a whole lot of gray areas and maybe even some big black and white areas in there. There are a lot of possibilities in this profession. All of them have pro's and con's to them. All of them require some education in photography and some specific needs for that specialization.

Most areas of specialization will require certain equipment to be able to photograph the subjects on a professional level. Not saying you have to have the top of the line equipment, but going into a dark church wedding where no flash is allowed with a kit lens on a Canon Digital Rebel is probably going to cost you your business. It's just not possible to do that scene with that scenario and produce professional grade images from the wedding. You are going to need a camera that handles extremely high ISO's and a couple of f/2.8 zoom lenses.
Likewise you can't go photograph a home for a realtor with a 200mm lens on a crop sensor camera.

Contracting and legal requirements for each specialization are different. Model releases are definitely different for dogs and people. You wouldn't have a dog put it's paw print on your model release and you wouldn't have a portrait client sign a wedding contract. Wedding contracts are very detailed and have a LOT of information in them to cover both the photographer's interests as well as the clients'.

Marketing and branding are very different birds for each specialization. A wedding photographer probably wouldn't advertise by placing work in a veterinarian's office and a pet photographer probably wouldn't attend the local bridal fair looking for clients...

You can see where I am going with this. Let's take this week to explore some of the big specialization areas and gather some of the information for your business plan.

Thursday, September 27, 2012

Let's start a weekly theme...

Perhaps if I start a theme for each week I will have an easier time writing and getting everything out in this blog that I want to get out there.
Just throwing out some of the themes I have running around back here behind the computer:
Planning your "Studio"
The Legal Side of The Photography Business
Different Photography Businesses
Choosing Products and Suppliers
The Computer for Editing
The Computer for Business
 Software for Editing
Software for Business
Accounting and Bookkeeping
Websites and Blogs
Building Your Style, Portfolio and Brand
Client Management
Profit Management

Those are a few off the top of my head... I am VERY open to suggestions here! What do I know that I can pass on or what don't I know that I can find out for you?

Wednesday, September 26, 2012

I dream of... DREAM BIG!!!

Dreaming the dream. That's where all of this business stuff started. Let's dream some more. Dream really, REALLY BIG. And write down every detail of that dream in a notebook.

WHY am I asking you to dream big? Because to make it big you have to dream big.

If you think about your dreams at night they're a bit sketchy, aren't they? You could be standing in the middle of  Freemont Street in Las Vegas and all of a sudden be in your bedroom at home. There's no rhyme or reason and we can be and do anything in our dreams. So, what if you could make that happen in real life? Well, you can't warp from Freemont Street in Vegas to your bedroom, but you can make your dreams come true.

I really believe that writing down this outlandish dreaming about your photography venture is an integral part of the process of building your business. You know what you DREAM of being, but that's a dream and flits away just as quickly as a dream at night does. However, if you write it down in black and white (or blue and white or whatever color pen you are using...) it becomes real. You have something to hold yourself accountable to.
What do you dream for your business? Not just the simple, easy answer of "I dream I will make money taking photographs of _______."
The nitty gritty of it. The WHO, WHEN, WHAT, WHY, WHERE and HOW of it. This is the dream, so it doesn't have to be real or even work out perfectly. It's what you WANT.
Who are you going to photograph? Families, babies, seniors, wedding, events, wildlife, births... Who will be your clients?

What kind of photographs are you going to provide? Remember! This is the dream, not the simple! I will provide amazing artwork pieces for my clients that is specifically designed around their home and family!  Or I will provide affordable portrait options to middle class families who can't afford to pay a million bucks for great portraits. Or I will provide product photography for local business websites...

WHEN will you work? Do you want to work around your kids schedules or around your significant other? Do you want to run a full time operation or do you only want to work a certain amount of hours? Will you work all year long or will you work only in certain seasons?

WHY are you doing this business? Why are you the one your clients will choose? Why are you going to succeed where many others have failed? My clients will choose me because I am a rocking photographer and I am going to succeed because my name will be more famous than Snookie. Hey, it's a DREAM!

WHERE will you do this? Your studio? Client's homes, businesses and on location? Both? For me? Hey! It's a dream: I will travel all over the world taking family portraits of the rich and famous!

HOW will you provide them images? CD? Prints? Small or large? Albums? How will you operate your sessions and proofing?

There are hundreds of questions for each of those questions and more. Start a notebook and in it write down your thoughts about how your business looks in your head. This is going to be what gives you direction on where to go with each stage of your plan. Don't worry-it will change over and over and over. That's probably a good thing. As it changes update your notes and forge on! Just make sure you are keeping it written down!!!!

Wednesday, September 12, 2012

Planning the plan... The first steps!!!

Planning THE PLAN
What the heck??? Now you want me to PLAN THE PLAN? This is getting kind of like looking in a mirror with a mirror behind it... it goes on to infinity. 

OK. Never mind. Let's call it the research stage. 

As with any business there is a LOT that goes into photography and you have to find out what you don't know; gather all of the information and options and THEN you can really begin your plan. 

You also have to make a few decisions before you can start the plan.That's where we are today-those decisions.

1. What? What kind of photographer are you and what do you want to do? Are you a child photographer? Portrait photographer? Wedding Photographer? Pet Photographer? Landscape? Maybe at this point you are thinking a little bit of everything? Decide what your business is going to be. 
There are several different schools of thought on whether you should define yourself to solely one thing or to do it all. They all have great points. You have to decide which school of thought is for you.
I suggest you get involved in the prominent photography forums. You can gather some incredible wisdom from the people that are there working in the business as well as their opinions and experiences. From their experiences you can get a pretty great feel of what is for you and what isn't. There is no right or wrong. Only what's right for you and your business.

2. Where? Where will you be located at? Your home? Storefront? On-location? There are pro's and con's to all of them. Maybe you want to start from your home studio or on-location now and plan to move to a storefront down the road...

Home Based Studio. There are some great benefits here if you have the space to do it. Obviously your commute is... well it isn't. Your overhead is much less than it would be if you had to maintain a separate location-that doesn't mean you don't have a rent/mortgage and utilities. There is then a portion of those things that would be an expense of the business (we'll touch on that in pricing.) It would just be significantly less than renting or purchasing a completely separate location.
Con's-sure, there are some. It's your home. You have pepople in your home and you give up space, privacy... It does not have the same “cachet” that having a storefront location has. Hey, a studio is even awe inspiring to most of us IN the business! A home based studio can say “AWAC” if it's not extremely well done...
We do all know the term AWAC? Right? Amateur With A Camera. Let's face it, going to someone's house to have your portraits done kind of feels like going to your neighbor's for a discount hair cut. That can be spun into a great positive-a home based studio keeps the cost to the client down significantly AND the professional comes to the client, takes the photograph where the client wants it taken and everything about the whole experience is customized!! Is the glass half full or half empty? 
It is a matter of managing expectations and creating the experience for the client. 

Storefront Studio. There are some incredible benefits to having a storefront. Visibility, presence, ease of shooting... feeling REAL. There are also some drawbacks. There is more overhead with a storefront than a home based studio. You have to recoup those costs somehow and that is always passed down to the client. The profit margin is lower in a storefront studio than a home based one. This is where that membership to PPA I have been preaching about comes into play. Their Benchmark Survey is a wealth of knowledge on this topic. 

3. Operating Format. Sole Proprietor? LLC? Incorporation? You can find more information regarding the different business formats and their pro's and con's at the SBA's website. I am not here to re-write the book, just to gather it all and get you started. Check out these articles:

4. Naming Your Business. MANY schools of thought on this one. You'll find it often said that you should use your name as your business name. It does make some sense, but it's not the answer for every photography business ever made.
You are always you. If you shoot some landscapes, some portraits and some weddings, you are still YOU, Jane Pinkerton. 
If you are photographing newborns now and you decide you like Pink Paisley Newborn Photography it's all great. Cool name! However, if you decide down the road that you also want to do senior portraits there is a little problem. Adding another name to your business is a little more complicated. Not to mention another website, facebook, twitter, Google+ and so on down the line.
If you go with "Jane Pinkerton Photography" you can always have "Newborns by Jane Pinkerton Photography" OR even "Pink Paisley Newborns by Jane Pinkerton Photography" and "Weddings by Jane Pinkerton Photography" and "Senior Portraits by Jane Pinkerton Photography..."
Is that what you HAVE to do? Heck no. You have to do what's right for YOUR business. If it's not right down the road even though you committed to it today-it CAN be changed. It's just a little more work.
Those are the first big steps you have to make here. They're actually fairly monumental! THIS IS IT! You are on the path to your dream now! WOOOT, WOOOT!

Monday, September 10, 2012

I'm new to the forum and saw a couple of your posts on starting a business in photography. I'm very much interested in this topic and was wondering if you had already posted some links, suggested reading material, etc. on this topic to get more up to speed. I want to spend the necessary time trying to develop a solid plan before even thinking about starting a business in this field. Any help you can provide would be greatly appreciated.


Just so you know... again... I am getting paid ZERO, ZILCH, NADA, NOTHING for the endorsements here. It's just people or sources I have found to be great in the business and that I admire.

Here is the quick and messy answer I gave to him:
I am working on a blog for exactly this, but to be honest there isn't much there yet. I JUST started with that post on building a house.
the blog can be found here:
It's really pretty useless right now, but I am hoping to get all of my thoughts together and organized into writing your business plan. 
The best links I can give you right now are Todd Reichman's blog Read from the beginning. He has some incredible insight on designing who you are as a business.  
Small Business Administration. They have incredible resources for anyone going into business. As you tour around on their website you will find everything and anything about how to go about starting a business.  
This next one is an investment on your part, but I can't tell you how much it will be worth in the end. Professional Photographers of America. An aspiring membership is about $17 per month for before you go into business. The professional membership is just under $30 per month. BUT!!! For that money you get an unbelievable amount of discounts and benefits. For the full professional you get $15K in gear coverage and the indemnification trust is an additional $50 a year I think. It's kind of like an insurance policy for if you screw up or if you get sued-regardless of whether you are at fault or not. They have an incredible amount of research and stuff that is invaluable to you in their benchmark study. There is so much information in the PPA that the membership will pay for itself even if you don't use the discounts and extra stuff.  
CreativeLive has some amazing classes. If you sign up and watch them when they are live they are FREE. To purchase them recorded is really not all that expensive considering the information in them. It would cost more to go to a seminar than it does for the recorded ones. There are some on business in there I believe. I haven't looked lately at what is coming up, but they are always GOOD.  
Elizabeth Halford of Elizabeth Halford Photography has an awesome blog with lots of information on all kinds of stuff business and photography related. This is her Business of Photography page. She's a very wise woman!

If I think of anything else I'll try to remember to pass it along. Usually I do post anything I run across in the forum, but sometimes when things are in their busy season (now!) I forget!

Sunday, September 9, 2012

There are a million photographers! HOLY COMPETITION!

How on Earth do I expect to make a buck when everybody and their brother is now a photographer? Facebook is turning them out like procreating rabbits and Best Buy is selling them cameras faster than they can stock their shelves. AND! All of these facebook photographers all selling everything and the CD for $50!!! I can't compete with that!

Nope, you can't. And I am guessing you don't want to try. Here's a novel idea for you: They are NOT your competition.  "WHAT? Yes they are! They are calling themselves professional photographers, they are competition" you say? My answer to you is still NOPE.
You are the only YOU. You are the only one who can produce the image YOU produce. Assuming you have some skill with the camera and post processing you are probably far better behind the camera than they are.  
Stop worrying about them and worry about YOU. 

You have to do two things that every company who produces a product or service has ever done: Define your target market. Then create your value and need within your target market.

Seeing how my kids just went back to school and I had to pay the bill for their school clothes we'll use them as an example.
This year the kids had to have Hollister, Abercrombie, Aeropostale, etc... Did that mean that they were better clothing than Sears and JC Penney's has? Nope. But they sure cost me more. And my kids were having none of that Sears or JC Penney stuff when I tried. Those companies have created a NEED within my kids for their clothing and a value to their merchandise that far exceeded what I WANTED to pay. Yet I paid the bill.
Don't even mention that W word to my kids unless it's in reference to paper and pens. Even underwear couldn't possibly come from THERE. Thank God they aren't Jet Setters and have me going over the top for haute couture from the runways because I'd have to become something other than a photographer. Bank Robber comes to mind.
The W's aren't competition for the quality department stores and the department stores aren't competing with the designer stores. They all have their own target market. To those in those markets they've created  value and need.
I will most definitely shop in Sears and Penney's for my clothing. I value their good, sturdy goods at a fair price. I do not need a $50 pair of jeans just because they say Abercrombie on them. I am not Abercrombie's target market and they really don't care if I go to Sears. I'm not who they want. They want my kids!
Abercrombie isn't ripping out it's hair because OH MY GOD, Sears took the customer!!! They don't even care! I am not who they want, they aren't what I want. I don't value them or need them. They don't value me or need me.

It's the same in the photography world. You are YOU and nobody else can produce YOUR photography. Sure, all of those other photographers can create a photograph-just not YOUR photograph. Define your target market and create the value and need in that market.

That's a lot of stuff I gotta know!

And where the heck am I to find all of this information and research I need to gather? I'll tell you a secret: A LOT of it is done for you.
Well, I have some bad news and some good news for you.
The bad news is it's going to cost you a little bit. Not to me! I am not selling it and neither is anyone else!
The good news is that it will cost you all of just under $30 per month and that $30 will get you some of the insurance that you need for your business as well as a TON of discounts and other things you will NEED for your business. FAR more than the mere $30 membership fee. Not the least of which is their $15,000 in equipment on your professional gear. Not to shabby! PLUS all kinds of discounts AND a free pass to Imaging USA. If you want to pole vault your new business venture attend Imaging USA. You will learn from the best in the business all of the tricks and tips you could ever imagine. It will literally transform your outlook and your business in a matter of a week.
So, where to get this awesome, amazing deal? Professional Photographers of America
The full list of benefits of PPA membership can be found here.

DISCLAIMER: I am not paid for this plug in any way. I don't get freebies or anything for it. Nothing! I just believe wholeheartedly that the membership to PPA is worth every penny spent. You WILL more than double your investment if you make good use of it!

Friday, September 7, 2012

OK, you've convinced me. I need a plan...

Where do I even start? I know I need to get a business certificate or something and tax stuff, but then what? How do I put this plan together? What should be in it? Lots of questions!

There are basically two types of business plans. The first is a short summary. It includes all of the key information. There are two parts, the first of which takes a look at the market, summarizes it and how your business will be formed. The second part summarizes your plan for how the business will operate including manufacturing, accounting, marketing and financials.
Here is an example of a short, summary business plan: . 

    1. Executive Summary
    2. Company and Technology
    3. Customers
    4. Market
    5. Industry Analysis
    6. Competitors
  2. PLAN
    1. Marketing/Sales Plan
    2. Research and Development (R&D) Plan
    3. Manufacturing/Engineering Plan
    4. Contingencies
    5. Financials
      1. Sources and Uses of Funds
      2. Balance Sheet
      3. Profit & Loss Statement
      4. Cash Flow
      5. Cost of Goods Sold

Just because it's a brief summary doesn't mean it is quick and easy to do. It looks pretty simple, and it kind of is. But you still have to do all of the research and planning. You just don't have to include it all in the plan. I prefer to use a more detailed business plan-I am a fan of planning for EVERYTHING-that doesn't mean you have to. Everything I am working with on this blog will follow a more detailed business plan. You can include as much or as little in YOUR plan. It's all about YOUR business and YOUR plan for success!

The detailed plan includes it all. I personally feel if you research and plan for everything, you will know what is coming at you and be able to better face the hurdles you will encounter.
An outline for a detailed plan looks something like this:

  1. Cover Page
  2. Table of Contents
    1. Brief Company Introduction
      1. Mission
      2. Location, size, history
      3. Overview of company capabilities
      4. Customers & past performance
    2. Product or Technology Description
      1. Brief description
      2. Present state of development
      3. Intellectual property status
    3. Commercialization Strategy
    1. Customers & End-Users
      1. How need is currently filled
      2. Distribution channel
      3. Demographics
    2. Buying Behavior
      1. Decision makers
      2. Basis for purchase decisions
        1. Frequency of purchase decision
        2. Features, advantages, benefits of competing products
    1. Market Definition
      1. Primary market
      2. Secondary markets
    2. Market Size and Trends - Primary Market
      1. Current total and served markets
      2. Predicted annual growth rate
    1. Industry Definition and Description
      1. Relevant SIC
      2. Current industry status
        1. New products and developments within the industry
    2. Legislation and Policies Driving This Industry
      1. Future and historical trends
    1. Indirect Competitors
    2. Direct Competitors
      1. Who are they?
      2. Strengths & weaknesses (product features, management team, financial resources, sales & distribution)
      3. Market share of competitors
    1. Marketing & Sales Objectives
    2. Current Customers (if appropriate)
    3. Potential Customers
      1. Customers targeted for intensive selling efforts
      2. How other customers will be identified & qualified
      3. Product features to be emphasized and how to contrast with competitors
    4. Pricing
      1. Basis for targeted price point
      2. Margins & levels of profitability at various levels of production & sales
    5. Sales Plan
      1. Sales force analysis (reps, distributors, direct)
      2. Sales expectations for each salesperson & each distribution channel
      3. Margins given to intermediaries
      4. Service & warranties
      5. Organizational chart for sales/marketing staff, indicating planned growth for 3 years
    6. Advertising
      1. Year 1 - Plans for trade show, press releases, direct mailings, advertisements
      2. Year 2 - 5 (general)
    7. Sales / Marketing Budget
      1. Assumptions
  10. R&D PLAN
    1. R&D Objectives
    2. Milestones & Current Status
      1. What remains to be done to make the product marketable?
    3. Difficulties and Risks
    4. Staffing
    5. R&D Budget
      1. Assumptions
    1. Objectives
    2. Use of Subcontractors
    3. Quality Control
    4. Staffing
    5. Manufacturing / Engineering Budget
      1. Assumptions
    1. Staffing Objectives
    2. Organizational Structure (phased over 3 years)
      1. Introduction of management team
      2. Key individuals to be recruited and plans for doing so
      3. Board of Directors
      4. Incentives for commitment
    3. Human Resource Budget
      1. Assumptions
    1. Potential Risks:
      1. R&D delays, funding delays, etc.
    2. Alternate Scenarios
    1. Financial Objectives
      1. Commercialization strategy
      2. Use of funds
      3. Terms & conditions of any previous financing arrangements
    2. Analysis of Potential Teaming Partners
      1. Who are they?
      2. Basis for selection
      3. Strengths, weaknesses, benefits
    3. Projected Profit & Loss Statements
    4. Projected Cash Flow Projections
    5. Projected Balance Sheet
    6. Alternative Return Scenarios
    7. Exit Scenario
  15. Appendices
  16. References
As you can see, there is a lot more to be done there. It's really not more work than the simple plan-it's the same work. It's just what is included in your actual written plan.
There are TONS of websites out there that will help you write your plan. Outlines will vary a bit by whatever source you are following and that's just fine. Find the one that fits you best.

One more push on the SBA... If you trace the SBA down through to your local area you will often find a local chapter or Small Business Development Corporation. These agencies are usually affiliated with local colleges or universities and will offer free or very low cost classes on everything and anything business related. Often there are on-line class systems and information you can access in your pajamas if you want to! Time to start working!! Find out what's available in your state.

For those of you in NY There is a wealth of information and classes offered by the SBDC! USE THEM!  

I'm just a hobbyist, I'll just report my income on my income taxes for now.

That's an option while you are building your plan and in many instances a really good option! However, it's just a LITTLE bit more complicated than just reporting your hobby income. You also really need to take a strong look at if it would benefit you in deductions to be a full fledged business. You also need to look hard at if you truly are just a hobbyist or if you are a business. 

According to the IRS website this is the criteria a person should use to decide if you have income that is from a hobby or a business. This quote comes directly from the IRS website HERE

In order to make this determination, taxpayers should consider the following factors:
  • Does the time and effort put into the activity indicate an intention to make a profit?
  • Does the taxpayer depend on income from the activity?
  • If there are losses, are they due to circumstances beyond the taxpayer’s control or did they occur in the start-up phase of the business?
  • Has the taxpayer changed methods of operation to improve profitability?
  • Does the taxpayer or his/her advisors have the knowledge needed to carry on the activity as a successful business?
  • Has the taxpayer made a profit in similar activities in the past?
  • Does the activity make a profit in some years?
  • Can the taxpayer expect to make a profit in the future from the appreciation of assets used in the activity?
At the early stages you are probably a hobby and can report your income as such.


You still are responsible for sales tax!!! Yep, even as a hobby!!! And you do not want to get “THE CALL” from the state saying you are responsible for sales tax you didn't collect or pay. There are only five states with no sales tax. Alaska, New Hampshire, Montana and Oregon. If you live in one of those states-you are one lucky soul! The rest of us are SOL and have to do it.

The SBA is a wealth of information and I encourage you to use it extensively as you are building your plan, starting your business and beyond.

The SBA has a great page on taxes and hobby income which can be found HERE
In short-hobby income is fine for the hobby phase of this venture, however you are still responsible for sales tax and have to register, collect and submit that tax. It's not all that hard and it won't cost you an arm and a leg. Most states it's free! So, please CYA and do it!!! There are a lot of people out there who are more than willing to turn you in. As much as I'd hope any professional in the business would help a newbie out, we know it happens. I've gotten THE CALL. I was legal, thank God, but I wouldn't want to have had to pay that bill if I hadn't been doing it.

Collecting sales tax and submitting it to the sate is really not that hard. It can be daunting to look at if you have never done it before, but you can do it. I PROMISE! If I can do it for a car dealership and repair shop, you can do it. There are so many taxes and fees that affect a dealership and repair station that it's scary. Photography is pretty simple and easy.

So, what do you charge tax on? Everything? That's the complicated part. It all depends on where you live. Some states tax the service you provide (session) AND goods. Some states tax goods only. Some states tax the service IF it becomes a tangible good-your session becomes a taxable item if the client buys something. Some states consider images delivered digitally taxable, some don't. Most consider a CD of images taxable as a good, but there are some where it falls into the gray area... You are going to have to get a little education here that I can't give you. There are 45 states and I can't know the sales tax from all of them. Sorry! GOOD NEWS! It's not that hard to find out and get a little help. SBA to the rescue!

Getting a Sales Tax ID is easy and in most cases free. Even if you are just a hobbyist JUST DO IT!!! It's better to be protected and spend a few minutes submitting the payment you collect than to take a chance with your future!

Thursday, September 6, 2012

Building A House

A couple of years ago my( then) 12 and 14 year old kids along with their friends built a “house.” It even had a second story and a roof. They were pretty clever and resourceful in building this house. They used lumber that their grandparents, us and friends donated.
One of the other parents found them a great piece of plastic/rubber for them to use as roofing material. They ran electric to their house by way of a REALLY long extension cord and had a TV and gaming system out there. They found some “furniture” by raiding the dealership for some car seats, swiping a cooler for a stand... It was really a pretty great idea. They thought they were pretty amazing. 
 I promise you it wasn't pretty. In fact it was so scary we made them remove the second story because it was so dangerous. As they were deconstructing it my son fell through the 'floor' onto the sofa (aka vehicle seat.) Thankfully no one was injured other than their pride.

The kids didn't plan for anyone to fall through the floor or for their house to have major issues. They just knew they had the raw materials and they could do it! As adults we wouldn't build a hose with no plans and no clue how construction is done. How could you expect it to be sturdy, pass codes or last? Those raw materials don't come cheap and I sure wouldn't want to take a risk of throwing all of that away because I didn't have any plan or knowledge of how to build it.

Going into business as a photographer (or anything else) is like building a house with no plan. You have some awesome raw materials and you know what you want your house to be in the end. You just need a plan on how to get there.You aren't going into business to fall through the floor, you are going into business to make some money doing something you probably love. At the very least you are hopeful that it will at least pay for the camera addiction we all have. 
Why hang your shingle out there and take that huge chance of failure? This industry sees THOUSANDS of "photographers" come and go in the business every year. Most of them fail not because they are bad photographers. Some are even pretty damn amazing photographers. They fail because they didn't have a plan to succeed. 

Back in the day when I used to play pool competitively a coach once told me
"Plan your shot. Then shoot your plan"
It is the best piece of advice I have EVER been given. It translates to every aspect of life. It doesn't even have to translate to be applied to photography. When you create an portrait you plan how you are going to do it-posing, lighting, settings, etc. Then you shoot it. If you have planned well you get an image that is exactly what you expected to get.
It's the same in business. Plan your success, then follow your plan. Will you have to ad-lib in there somewhere? Sure. Your plan will change often over the years, but if you are planning for that change you will succeed.

Here is the key to everything:
Business is far more difficult than photography. 
A person who is good at business and mediocre at photography can succeed wildly. 
A person who is phenomenal at photography and mediocre at business will usually fail.

My first suggestion? Get a business education. It should be part of your plan. Plan to learn what you don't know. Because you just don't know what you don't know.
If you are going to school for photography change your major to business. You can get a photography education anywhere and it's much easier to learn than numerous aspects of running a business. Take photography as your minor and business as your major.

Welcome to Charming Business!

Charming Business is all about the business of photography!