Turning Your Photography Hobby Into A Business
So you’ve been a photographer for a while, you’re in love with taking pictures, maybe you’ve had a few people reach out to inquire about paying you for photos, and now you’re considering making photography a career! First off, hell yes!! I am so stoked that you are considering making the transition from a hobbyist to a professional! Running a wedding photography studio has been one of the most rewarding things I have done in my life!
I want to use this blog post as an opportunity to help steer you in the right direction, and to give you some advice and tips to make the process easier!
*DISCLAIMER* I am NOT a Certified Public Accountant (CPA) and the advice that I am giving is what I have learned from my accountant as well as what I have learned along the way. There are times where I will be intentionally vague for the sake of limiting my liability! If there is one thing to take away from this blog post it is to GET AN ACCOUNTANT.
My plan is to break this blog post into two halves. The first half will focus on top-level ideas and the mindset that you need to be in to start a photography business! The second half will break down exactly what you need to do to file as a business and acquire the necessary numbers and licenses so that everything is legal! I’ll also touch on some non-necessary but VERY helpful pieces of software that have made this process much simpler!
Part 1: Mindset
For context, I started Intrepid Visuals LLC in October of 2015! A few months before I incorporated I was very torn on whether or not I was ready! At some point or another you have probably asked when is the “right” time to convert your hobby to your profession! If you’re like me, you maybe thought that you need to have a consistent stream of clients & income before you make it official. Is there a magic number of income that you have to pass before you start reporting? These, along with many other things, were a huge obstacle to me starting a business, but after meeting with tons of business professionals and accountants, one thing became clear.
None of that matters.
Being “ready” to start a business is not dependent on how much work you’re bringing in, in fact you should start your business well before you are consistently bringing in clients! That way when you do start to bring in a lot of leads, you have all of the fundamental things set up and won’t have any issues with back taxes and unreported income!
Here is what matters when you start a business. You have to want it. You have to want it so bad that when you are out of money and have to sell your belongings to survive for a month you keep going. You have to want it so bad that when you compare yourself to other photographers who are far more successful than you are and get discouraged and feel like you’ve been kicked to the ground, that you get back up and keep going for it.
Running a photography studio is the most rewarding thing I’ve ever done but it has also been the most difficult. You have to be prepared to fight endlessly for what you want. No one will hand it to you, you have to go and get it.
Another massive point to realize is that running a photography business is exactly that. Running a business. It is very easy to jump into starting a business without really preparing yourself for what it is like to be a business-owner and the amount of work that it entails. This is something that I had to learn the hard way, and it is something that I wish someone would have told me earlier!
Operating a photography studio is honestly like 20% shooting & editing and 80% everything else. It is very important to understand that by making this step your passion for photography will likely diminish at times. This is very normal and burn out is very common in this industry. It is okay, it happens to everyone at some point. There have been weeks where I haven’t touched my camera simply because of the mass amount of shoots that happened prior. What’s important is that you are aware of that and are ready for when it happens. Everything we love sucks sometimes, we just have to jump back in once we’re ready.
Remember that this blog post is all about starting a business, and there are a lot of implications that come with that. By this point you might have already decided that it isn’t for you, and that is 100% okay. There is absolutely nothing wrong with being a damn good photographer as a hobby.
The last point I want to make is this. Your business will feel like your child at times, and you will want 100% control over everything. You’ll want to decide your branding, you will want to make all of your product designs, you will want to do 100% of your editing, you might even want to do your own accounting. The biggest thing I want to stress is to not resist outsourcing your workload. As business owners we often have to wear a lot of hats. Here are just a few:
Photographer, editor, marketer, accountant, designer, customer service and many more.
The biggest thing to outsource is your accounting. Unless you are a CPA looking to start a photography studio, DO NOT do your own accounting. Please hire someone who can help you, it is not something you want to mess up. Accountants can also answer the millions of questions that will come up in your first year of business.
Don’t be afraid to outsource things like your graphic design either! We are often times too attached to our own brand that we aren’t able to make good & objective decisions about our brand. A good designer goes a long way. I admittedly have not done this yet at the time of writing (March 2018) but it is very high on my list of priorities.
I currently do not outsource my editing, but I would suggest that you be prepared to incorporate that into your workflow if you have an influx of leads or have a full time job that takes up most of your time besides shooting.
Ultimately, you should be 100% ready to give everything you’ve got into making this your career. If you are willing to do that, then you should do it.
Part 2: How to do it
When I had decided that I wanted to turn Intrepid Visuals into a Limited Liability Corporation (LLC), I could not for the life of me find any solid resources on how to go and do it. Every online article that I read said something different and I honestly was overwhelmed with all of the tax and business information that is on the internet. What I ended up doing was meeting with a business professional for a couple hours. Business professionals are people who are incredibly well-versed and knowledgable in all of the ins-and-outs of starting and operating a business. Because I started from absolutely no knowledge, this was invaluable.
At the time I incorporated I was also a student at the University of Nebraska-Lincoln. As a student, I was able to go to the College of Law and meet with people there for free to get more information on how to file as an LLC and they gave me templates for some of the documents that you need to create. I will provide those templates for you here at the bottom of the blogpost!
If you are doing this from scratch like I did, I would suggest just finding a CPA and they will be able to either answer your questions, or point you towards the people who can.
A quick note that these steps are for how to become an LLC in Nebraska. This process will differ from state to state. If you plan to do this in another state, find a local CPA and ask them how to proceed.
Here is a checklist of the steps you need to take in order for Nebraska to recognize your photography studio as an LLC:
0.) GET AN ACCOUNTANT!!!
1.) Decide what your studio will be called
2.) Create your Certificate of Organization
3.) Walk in to the Secretary of State’s office and file your certificate (can be done online)
4.) Obtain a Federal Employer Identification Number (EIN)
5.) Fill out the Nebraska Department of Revenue Form F-20 (can be obtained online)
6.) File your Form F-20
Okay, let’s dive into each of one of these
0.) Get an accountant!
Like I said earlier, an accountant is probably the most important thing you can get in the beginning. Honestly, you probably don’t need this blogpost if you already have an accountant for something else. If they aren’t able to answer your questions, they will know the people who do. If there is one piece of advice I have it is to NEVER ask for tax advice on online photography forums, because everyone knows something different. If someone you know tells you something and your accountant tells you something different, ALWAYS go with what your accountant said. Why? Because you’re paying them.
1.) Decide what your studio will be called
I only put this step in here because often times starting an LLC could be a wonderful time to completely rebrand! When you decide what your studio will be called that is also known as your “Doing Business As” name or DBA. You are actually to able to call your LLC one thing, and have your DBA be something different.
2.) Create your Certificate of Organization
The Certificate of Organization sounds much more intimidating than it actually is. For single-member LLCs (meaning you are the only operator) it is literally a word document with a few key points. Check the template at the bottom of the post to see what this looks like. But the first thing you will put is the name of your business. Then you will state who your “Initial Agent” is. This will be you, and the address will also be your address. Then you will state what your “Initial Designated Office” is. Again, this can also be your address if you plan to operate out of your home. If you already have a studio space that is separate from your home, use that address. If you want a separate address but don’t have a studio, you can sign up for a PO box at a post office and use that as your Initial Designated Office. At the bottom it will ask what day your business started. This DOES NOT have to be the same day you file. For example, I filed my Certificate of Organization on September 30th 2015 but my business didn’t officially start until October 1st 2015. The last thing you fill in is your Organizer. This, again, can be you.
3.) Walk in to the Secretary of State’s office and file your certificate
Once you have filled out this template, you will want to print out TWO copies, sign them, and bring both into the Secretary of State’s office. You can find the location on their website www.sos.ne.gov. You are looking for the business services office. You will then pay a fee of $105 dollars to have them file your certificate. They will then give you an official certificate with your business information on it. At this point, the state of Nebraska recognizes your LLC as a legal entity. This process can also be done online.
4.) Obtain a Federal Employer Identification Number (EIN)
This number is easily obtained online at this link. This number is basically a social security number for your business. This is the primary way that the IRS will identify your business! A huge benefit of having this number is that you can then go to a bank and create a business bank account under your business’s name instead of your own. This is incredibly useful for keeping your personal and business expenses separate.
5.) Fill out the Nebraska Department of Revenue Form F-20
Here’s a link to the form. This is the biggest form you will have to fill out. This form deals with sales tax. Sales tax is a confusing concept in the photography industry because again, everyone knows something different. I’ve linked an amazing blogpost by Brandon Scott (An ex CPA who now runs a wedding photography studio) about sales tax for photography here. Brandon’s blog is also full of incredible business information for photographers, I highly recommend you read it!
Basically, sales tax is something you will almost definitely have to pay. This form lets Nebraska know how much sales tax you will be bringing in (you will have to estimate how much sales tax you think you will bring in in your first year and check the box for what bracket that falls in.) and therefore how frequently you will need to file your sales tax. Initially you will probably only have to file your sales tax once a year. Once you start bringing in more you will start paying your sales tax more frequently. Businesses bringing in tons of sales tax pay monthly.
You will need your EIN before you fill out this form, and once you submit it Nebraska will mail you a Tax license and a pin number. Your tax license will also have your Nebraska ID on it. Your Nebraska ID and your pin number are used to pay your sales tax.
6.) File your Form F-20
You are able to submit this form online, or you can also walk in to the Nebraska Department of Revenue building and do it that way. This can be useful in case you have any questions, or if you are like me and misplaced your license.
Once you have done all of those steps, you are done! You are now officially a business owner! Congratulations!
Part 3: Everything else
Okay so I know I said that I would do this in halves but I decided to add this additional segment on here. I want to cover a few really useful pieces of software that will help you manage your new business!
First up is Quickbooks Online
Quickbooks is the first piece of software I recommend you buy. This software handles all of your expense and income tracking. This is absolutely critical in keeping your books clean. Every time you spend money and make money you NEED to enter it into this program. Quickbooks will keep track of all of the money you’ve made, how much you’ve spent, and how much sales tax you owe.
Now there are a lot of other options besides Quickbooks, but a TON of accountants use Quickbooks and using it will make your tax filing much easier and faster. Quickbooks honestly kind of sucks but it is for this reason that I continue to use it.
Quickbooks can also do your invoicing for clients to, and has a ton of awesome payment options for your clients. If you have been looking for a way to offer online payments, Quickbooks could definitely be your solution! (It is for me).
I cannot stress how important it is for you to have good bookkeeping from the very beginning.
Next up is a good CRM! (Customer Relations Manager)
Oh man, there are so many of these. 17hats, Dubsado, Tave, Honeybook, Ninja Studio. They all do a similar thing and that is handle all of your lead tracking and client management. These programs will allow you to make workflows and templates that will keep you on top of the workload that comes with running a business. For me, I have chosen to use Tave! All that matters is that you pick one and use it.
Tave allows me to create automated emails and set automatic reminders whenever I enter in a new lead. A lot of these programs will also give you contact forms that you can embed into your website that will automatically enter new leads! These CRMS also manage contracts and can also manage expenses and income! Because I use Quickbooks I do not use any of the financial features available in my CRM!
A lot of people have been raving about Dubsado, so I’d give that a solid look if you haven’t gotten anything yet!
Next up is Squarespace!
A good website is paramount to a successful business. Squarespace is incredibly simple to set up and the websites look awesome! My website is a Squarespace site! It is also an incredibly affordable option as well! While not necessarily related to starting a business, if you don’t have a website you will definitely need one.
I sincerely hope that this blogpost has been helpful to you! I truly wish you the best of luck with starting your business! There are still tons of things that I didn’t cover like tax write offs and all of that, but I firmly believe that you should discuss all of that with your accountant! Either way, you are on your way to doing something incredible, do not let anyone stop you.
Certificate of Organization Template
Nebraska Secretary of State Website
Nebraska Department of Revenue Website
Nebraska Form F-20
Federal EIN Online Application
Brandon Scott’s Blog
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