How to start a photo company?

[mbbye]

Hi everyone, I'd like to preface this with the fact that I am still basically a beginner and no where near good enough to actually start a photography business yet. However, as a business student I was thinking about how exactly one goes about starting a photography company.

I guess my biggest question is when would a business need to be incorporated or officially recognized as a business by the government? Is it legal to come up with a name for a company and start say a flickr account or tumblr using that name rather than displaying the pictures in a more personal photo sharing way without having officially declared the name as a business? For example, I have a friend who recently created a facebook page promoting her photography. She created a name and a watermark and promotes her photography under that name rather than her name. However she has not registered the name at all. It should be noted that she does not really have the intent to sell her photos or be hired for photo shoots either, but just created this as a way to show her photos.

Thanks for any insight you may be able to provide.

 

[Bitter Jeweler]

However, as a business student I was thinking about how exactly one goes about starting a photography company.

Just like starting any business. Apply (pay) for a vendors license, apply for a Tax ID number, and file as some sort of organization (LLC, S-Corp, Inc, etc)

I guess my biggest question is when would a business need to be incorporated or officially recognized as a business by the government?

As soon as you are making money, ideally. Realistically, as soon as you fear being caught by the IRS. Income IS income, and is taxable.

Is it legal to come up with a name for a company and start say a flickr account or tumblr using that name rather than displaying the pictures in a more personal photo sharing way without having officially declared the name as a business?

Technically yes, you can have a pretend company, until you start making money. You cannot attach registered business suffixes to your name though, such as "Girls Photography Co."

For example, I have a friend who recently created a facebook page promoting her photography. She created a name and a watermark and promotes her photography under that name rather than her name. However she has not registered the name at all. It should be noted that she does not really have the intent to sell her photos or be hired for photo shoots either, but just created this as a way to show her photos.

Thats fine, as long as, again, she is not taking any income from it. The minute she sells one image, she is taking income, and in the governments eyes, you are required to file sales tax and income tax.

Thanks for any insight you may be able to provide.

 

[mbbye]

Perfect. That's exactly what I was curious about. Thanks for your help!

 

[KmH]

It will depend on the local, county, and state laws where you live.

There are 3 common types of small business:

1. a sole proprietor ship
2. a limited liability company, also known as a L.L.C.
3. and a sub-chapter S corporation.

Establishing each type of company involves escalating cost, and each offers varying levels of protection to the company owners personal assets. Each company type also has differing startup and reporting requirements, plus those requirements vary by state. Don't forget the Fed's and the hoops they will want you to jump through.

Your friend, "without having officially declared the name as a business" could be commiting trademark infringement if someone else is already using the name for a legally licensed/registered business. That is part of the licensing/registering process, checking to see if the business name is already in use.

There is usually extra paperwork involved when a business name is not the same as the business owners name, and is commonly known as a DBA, Doing-Business-As.

Your friend could also run afowl of the state tax people if she is selling but not collecting and forwarding the state sales taxes. States are really strapped for money right now and the fines and penalties assesed owners of un-licensed/registered businesses can be very expensive. Many states have award programs that kick back a % of the fines and penalties to whoever dropped a dime on the illegal business. Often the dime dropper is a legal business in competition with the un-licensed/un-registered business.

 

[Blake.Oney]

I actually opened a shop last year (not photography related) and I would have went with sole proprietorship, but I was opening it with my brother. We had to do LLC. Any time you are making money you have to register your business. In most cases you get your business license from the city. They will bill you a percentage every x amount of time. In my case it was 1% every 3 months. You can then set up to pay your taxes annually or quarterly. My biggest piece of advice, even though you weren't asking for it, is get an accountant. With a business an accountant is just something that you have to have. I am pretty good with a lot of business stuff, and most everything we needed to do I could handle, but there were some unexpected things that came up that had me drowning. Literally within a couple days I went to an accountant and she straightened it up within a couple hours.

 

[John Murphy]

[FONT=&quot]I would recommend doing a Business Plan using Business Plan Pro from Palo Alto Software you can get a Start Up Kit on How to Start a Photography Business. The software is great and really easy to use.

I hope this helps[/FONT]

 

[vtf]

I actually opened a shop last year (not photography related) and I would have went with sole proprietorship, but I was opening it with my brother. We had to do LLC. Any time you are making money you have to register your business. In most cases you get your business license from the city. They will bill you a percentage every x amount of time. In my case it was 1% every 3 months. You can then set up to pay your taxes annually or quarterly. My biggest piece of advice, even though you weren't asking for it, is get an accountant. With a business an accountant is just something that you have to have. I am pretty good with a lot of business stuff, and most everything we needed to do I could handle, but there were some unexpected things that came up that had me drowning. Literally within a couple days I went to an accountant and she straightened it up within a couple hours.

:thumbup:+1001110101001010%
Having owned a part time business in my past, you can end up spending the same amount of time on just the accounting side as you do conducting your business (thereby is a full time job to do parttime business, imagine what its like when its a fulltime business.) and then theres the fact they can do your taxes and take the responsiblity for being in the wrong.
My suggestion is get 4 professionals when going into business.
1. Lawyer
2. Insurance agent
3. Accountant
4. Banker

 

[SrBiscuit]

but i thought all you needed was a dslr with a kit lens... :scratch:

shit, you mean i gots to know about bidness?

 

[o hey tyler]

but i thought all you needed was a dslr with a kit lens... :scratch:

shit, you mean i gots to know about bidness?

No, all you need is a DSLR and a kit lens to be pro.

 

[Patrice]

Others have given you good advice on administrative issues, legal issues and the need for appropriate professional help. Let me talk to you about the amount of commitment required. I have owned and operated businesses for the last 10 years or more. At 40 I had a young child, a mortgage and some small credit debts and no real savings other than the equity in my home. So I quit a good paying job to start a business and through hard work and determination was able to retire debt free at 53. So, for what it's worth, I can offer a few pointers.

Don't start a business to make money. Start a business because you relish a challenge and have a desire to be the one making the decisions. The money will come later.

Don't start a business if you like regular holidays, weekends free to do whatever, dinner with the family regularly at 7:00 pm. Startup businesses demand a huge amount of your time. Picture yourself working 80 to 100 hours a week at first. You are the chief cook and bottle washer. Pay the lawyer and accountant when you need to but you are the one brushing the toilet bowl once everybody else goes home. You'll be able to delegate and take extended holidays much much later, if your business works out.

Don't start a business if you enjoy having income for discretionary expenditures such as toys, dinner and movie with a date, new cars, ..... Startup businesses do not generate a lot of personal income at first. Are you ready to mortgage your house, or drain your savings, or liquidate your retirement savings or kid's college money to fund your business? Remember that most new businesses fail. There is a real risk of loosing your shirt. So be ready to live pretty modestly for the first few years. Those 80 to 100 hour weeks will likely be at less, way less, than minimum wage. The buckets of money will come later if your business is really successful.

So why start one? Because it's fun. There is a tremendous amount of satisfaction at seeing a well run successful operation supply you and your employees with a decent income and comfortable lifestyle, and being able to say "I did that!"

One last word for now: don't be afraid of failure. Remember the adage "Nothing ventured, nothing gained." So your first attempt is not wildly successful, don't despair, pull up your socks and try again. You'll do better because you will have learned what does not work. Just as important as knowing what does.

This is enough rambling from an old man.

 

[Blake.Oney]

Patrice is right. The whole time I had my business I was broke, and then it failed. It felt so horrible at first, but now I look at it as a very helpful learning experience. If someday I decide to open a studio (which I don't plan to, but you never know) I know how to run a business. I feel that I can comfortably, from beginning to whenever, run a business now. It failed because I thought the industry I went into would work in my area, but there just wasn't enough people (it was a hobby: skateboarding) to support it.

 

[AmersonPhotography]

I am new to the site and new beginner with a DSLR, and I was thinking that in my future that I would love to do photography on the side. I just want it to be a small thing maybe for friends and family. I would not want a studio, and would not want to work all the time at this. If I just want to do this on the side can I just do this or would I still have to go through the process??? Thanks!!!

 

[Patrice]

I am new to the site and new beginner with a DSLR, and I was thinking that in my future that I would love to do photography on the side. I just want it to be a small thing maybe for friends and family. I would not want a studio, and would not want to work all the time at this. If I just want to do this on the side can I just do this or would I still have to go through the process??? Thanks!!!

Well for friends and family just tell them you'd volunteer your time and talent to them for costs and cake. Go for it. (You still run the risk of loosing some friends if the photos of important events aren't up to expectations though!)

 

[AmersonPhotography]

Thank you for the reply. I will have to start out slow and give it some major thought because it's a hobby and I would love to do it on the side, but i'm also going to nursing school so it could only be something to do in spare time.