Well, guess what. Today is Wednesday.

Thanks to Adam Westbrook (@adamwestbrook) for sharing this week’s top tweet: “Creativity vs. Cash,” part of the Break Through Your Creative Blocks series on the Lateral Action blog (forgive them for the vibrant red highlight color, the advice is worth the visual assault).

The post leads with a great quote from Hugh MacLeod of gapingvoid.com:

“The creative person basically has two kinds of jobs: One is the sexy, creative kind. Second is the kind that pays the bills. Sometimes the task at hand covers both bases, but not often. This tense duality will always play center stage. It will never be transcended.”

It goes on to outline three options for, let’s not say transcending that duality, but dealing with it in a healthy way.

1. Put creativity and cash in separate boxes
2. Earn cash from your creative work
3. Take a creative approach to earning cash

As you might guess, option three is where the really good advice comes in, with specific examples about how you can apply creative thinking to every aspect of your business — and actually make it fun :)

If you find this post helpful, please pay the creative karma forward and send us more tweets with useful information for creative entrepreneurs. You can even comment below, include @liveBooks, and click “Tweet this comment.”

New York Magazine last week published the most in-depth article yet chronicling the sad financial downfall of celebrity photographer Annie Leibovitz. The question on everybody’s mind is how a person who’s making an annual salary of $2-to-$5 million could run into a debt of over $24 million. The Wall Street Journal blames it on her “leverage-and-live-large lifestyle.”

In a surprising move, Time Inc. has purchased a house in Detroit to serve as a long-term base of operations while its publications document the struggle of the nation’s automobile capital. This seemingly unprecedented move will allow Time’s journalists to cover the story not only as observers, but as part of the community.

The iPhone emerged this month as the most popular camera on Flickr, ousting the long-reining top uploader, the Canon Rebel XTi. We’re not surprised considering how easy  iPhone images are to upload and the improved picture quality of the new 3GS. At the time of writing this post, the XTi has climbed back to the top of the chart, but we’re betting Canon is paying attention and expect to see wi-fi upload capabilities in their DSLRs soon.

Matt Mandelsohn’s The Lesson of Lindsay is a beautiful story of young girl struggling with personal tragedy. The fact that the piece was turned down by every potential publisher, one because they wanted “happy” news stories, is just a tragedy. A Photo Editor boils it down to the “duh” soundbite that publishers still refuse to listen to.

One of Gustavo's photos from his Hogs for Kids tour. ©Gustavo Fernandez

No one has more power to change the world than photographers. Yes, yes, doctors are regarded as the human deities of the world, but with few exceptions photographers are embraced with open arms everywhere they go. Because whatever your photographic discipline, and no matter where you travel, you can barter your talent as a shooter for just about anything. Including the well being of children in a far away country.

A week and a half ago photographer Gustavo Fernandez packed up his Harley Davidson to be shipped back to California from New York. He had successfully concluded his second annual “Hog for Kids” motorcycle ride across the United States in a bid to raise money for impoverished children in the Dominican Republic, where Fernandez was born.

In his first career, as a pharmaceutical rep, Gustavo frequently contributed to Children International, a Kansas City-based organization that aids needy children around the world. When he left that steady paycheck last year and plunged into a new career as a photographer, Gustavo (like most making that transition) was watching his bank account with a frugal eye. His budget wouldn’t accommodate his annual donation to his favorite charity.

Gustavo Fernandez ©Michele Celentano

Unwilling to abandon the kids of the Dominican Republic, Gustavo went on a motorcycle ride to conjure a creative solution. He was sitting on the answer. He loves riding his Harley and he loves making pictures. Thus emerged Hog for Kids.

As he rode east to New York, Gustavo shot portraits of the children along the way — in exchange, the families contributed his room, board, and a $264 annual ($22 monthly) sponsorship of a child through Children International. This year’s successful trip took 28 days and received international attention. Gustavo says he is looking forward to riding again next year — provided he gets the feeling back in ass by then.

There is no other art form that is so versatile in it’s adaptability and portability for aiding others than photography. As Gustavo demonstrated, all that’s required is the will and the application. Your efforts don’t need to be as grand as a motorcycle ride across the country, but I do urge you to try and find a charitable application of your talent at least once a year. Not only is it good for your soul, it’s good for your career.

As Gustavo discovered, any experience with a camera in your hand, paid or charitable, will always make you a better shooter than you were the day before. He returned from his first Hog for Kids ride a markedly better shooter than before he left. When you place yourself in photographic situations that are unfamiliar and require you to adapt quickly, you’ll be improving by a significant factor. If those situations are charitable in nature, you have more latitude for mistakes, which will ultimately prepare you for the times when mistakes are less tolerable.

Photography is a unique profession that is a golden key to the world. Don’t keep it all for yourself.

From Doug's "Heaven, Earth, Tequila" project, which was a commission as well as a book and exhibition, with prints like this one now for sale on his website. ©Doug Menuez

So far in this column I have touched on general issues of starting a photography business. Now we’ll explore the mystery of profits. If you want to make a profit, stay in business, and retire some day, you need to know your break-even point. Break-even is reached when your income is equal to all your costs: production, marketing, fixed overhead, taxes — everything.

Why is this useful to know? Because every decision you make impacts your costs and/or potential revenue, so you should be evaluating all options in the context of your cash flow and whether you will make a profit. When you print a new portfolio, buy a camera, or advertise in a source book, you are taking a calculated risk that these expenditures will yield jobs and revenue. If you can’t do the math and actually calculate that risk, it’s just risky.

Most of the photographers I know take every job they can, happy to be working and oblivious to the fact that some jobs cost them more money than they will earn. This happens because they don’t know their break-even and are not factoring in all their costs.

You simply must know if you can even afford to take a particular job before you consider it. Sometimes photographers take a loss for a great assignment that will help the portfolio. But if you rationalize a low fee because the job makes you feel better, or think it gives you momentum, think again. Sometimes we are asked to do a job as a favor with the promise that next time we’ll be paid properly. I can pretty much guarantee you that this promise is a lie 99 percent of the time. Especially in this economy.

You can go out of business in a hurry working under the illusion that being busy is the same thing as making a living. More likely you are just churning and burning resources without getting ahead. If things slow down, look out. Instead, be strategic. Your goal should be to make a profit to provide financial security and funding for future creative endeavors. Therefore, each job you accept should fit into what you defined in your business plan.

The next step is to understand your profit margin. This is where you can really refine your goals, focus your mind, and get the business in gear. This often-ignored tool is simple: profit margin equals your net profit after taxes divided by total revenue.

Say your net profit is $30,000 on $300,000 of revenue. Your profit margin is 10%, not so great. Average business margins are around 30%. With that knowledge, you know it’s time to cut overhead, raise your fees to earn more, or both. If you regularly check yourself against an ideal profit margin, you are utilizing a potent tool to analyze your business costs. Now you are starting to take control of your own destiny.

Let’s break it all down another way: Say your total yearly overhead at the moment (Fixed Expenses + estimated Cost of Goods Sold + estimated taxes) is in fact $300,000. That is the minimum amount you have to earn to break even. Now look at your income and how it is billed. If you bill per ad, and you’re getting an average of $10,000 per ad for usage fee, and you shoot about two ads per month, your total annual income is $240,000 — and you are losing money.

Until you do this math you probably think you are skating by because the checks are coming in. You are short and late on some bills, but you are working. But by not making a profit, you are actually way behind and won’t last long. You shot 24 ads at $10K each, but you need to do 30 ads at that rate just to break even. To make a profit you’ll need to significantly cut costs, raise your rate, or both.

Based on your break-even today, and considering your market, forecast a number of jobs for the year that seems conservatively realistic and how much you’ll need to charge to arrive at a 30 percent profit margin. Carve that in stone or on your forehead and aim for it. Now you can be strategic about every job you accept and every dollar you spend. You can keep track of your progress easily and push yourself and your team toward that goal. Profit. Make it part of your plan.

• What was the hardest or scariest thing for you when you left your staff position? How did you get past it?

Pouya Dianat
Free time is a terrifying thing to have, at first. When I was a staffer, I talked about everything I was going to do and kept a list. The first week I had off from work, though…I sat staring at my computer just crushed by the overwhelming weight of freedom. So I set up a comprehensive list of everything I wanted to do and organized my days to have a loose rotation. If I have a week off while the Braves are out of town I rotate my days between:

(1) PHOTO DAY – Spent working on personal projects, screwing around with studio ideas, editing photos, researching things I want to work on, planning future projects

(2) FILM DAY – Working on scripts with my roommate, who is a writer, watching shorts, reading FilmMaker, MovieMaker and Film Comment, watching movies, reading about other filmmakers, researching

(3) TRAINING DAY – Log on to Lynda.com and choose something from SEO, Flash, Final Cut, PhotoShop, or any other program and learn something new — it’s been phenomenal

And on the seventh day of the week? Errands and finances: getting bank accounts into order, budgeting for the rest of the month, paying bills, buying way too many Magic Arms at Showcase Inc., etc. The key to my new career is constant growth, continuous learning, and striking a balance between paying the bills and doing what I want to do.

Nanine Hartzenbusch
Establishing my professional identity in a new community — we moved to a different city and I created a new business. I was known and well-connected in the Baltimore Washington community because I had worked as a staff photographer for the Baltimore Sun for 11 years. In Charlotte, where we’ve been for two years, people are still getting to know me and my work. My biggest challenge is to grow my client base, while getting to know Charlotte. A friend counseled me, “This is a marathon, not a sprint,” which has helped tremendously. Being patient has been key.

Jason Arthurs
The scariest part for me was simply putting a price on my own work and my own time. At a newspaper that price is set for you, and you have one boss you are accountable to for the most part. I got past the pricing myself obstacle fairly quickly. Once someone said yes to a price that I thought was fair, I felt a lot more confident with the next client. I was very careful not to undercut the market in my area. A lot of my freelance work comes as referrals from other freelancers and I think it´s important to know what the market price is for assignments.

Eric Larson & Jen Sens
ERIC: The most difficult part of the transition has been the business aspect. Bidding jobs, contracts, licensing, bookkeeping, marketing. They don’t teach you any of that in journalism school. We don’t spend as much time as we would like shooting pictures, but that’s a reality of running your own business.

Not having benefits or a paycheck is also right up there. You can’t really live on a budget when you have no guaranteed income, and getting independent health-insurance is a kind of like being stuck in a very expensive bad dream. I took the take-this-job-and-shove-it approach to leaving the paper. This wasn’t the smartest, but I can relate to someone who comes into work one day and leaves without a job. You go into survival mode and are forced to figure things out pretty quick. Especially when you are young, aren’t vested in your 401K, don’t have any savings, and need to spend 20K on gear in order to operate.

I lived off credit cards for a few years. The nice thing about freelancing is you can clear debt pretty fast if you land one big job. All those years of shooting, interning, and assisting gave us a solid portfolio to start with and made us pretty confident in our abilities. If you show up to a big shoot, get nervous, and don’t bring it, you won’t get another call from that client. We also have a great mentor in Orlando, Ben Van Hook. He has been instrumental in helping us learn about the business and become better versed at producing large advertising shoots.

Heather Hughes Ostermaier
The hardest thing for me was leaving my friends and the excitement of the newsroom, which made it easy for me to stay on top of local events. So I started a monthly get together for all of the past and current newspaper employees (since there have been so many layoffs, a lot of us are still in the area).

The scariest thing was not having a guaranteed paycheck and the uncertainty of having a successful business five, ten, or even twenty years down the road. So I read several business and photography business books, and talked with everyone (including Rachel LaCour Niesen) who had successfully gone through the transition to learn from them. Then I kept careful records of when I booked weddings, how many meetings I had, etc. so I was able to see trends through the year and know if I was doing as well as or better than the year before.

An ad campaign for Target shot by Deanne Fitzmaurice, a Pultzer Prize-winning photographer who left the San Francisco Chronicle last year.

As we look around the photojournalism world today, it’s hard not to worry about one trend in particular: Newspapers, magazines, and wire services have been cutting pages, budgets, and staff positions, for years — and they’re not coming back. With fewer staff jobs to go around, more photographers than ever are deciding to work for themselves. Being the innovators that photographers are, they’re exploring new markets, new mediums, and new skill sets, especially those needed to run a business.

Some former staff photojournalists saw the writing on the wall long ago and now run their own thriving businesses. Many more have made strides in the last year or two, but still have a few questions — or they’re planning to make a move soon and have lots of questions.

Next week, August 10-14, RESOLVE will run five days of posts designed to answer these questions. Of course, no one person has the answer to all questions, especially the big ones about where the industry is going and how photography will continue to be profitable. But every photographer and editor and rep out there has the answer to one or two questions. That’s why we’ve asked as many as possible to share their experiences.

We’ve talked to dozens of former staff photographers working in a range of markets and will share their insights with you in daily posts next week. Each day we’ll also explore and explain an alternative market for photojournalists, including commercial assignments, wedding photojournalism, fine-art, and working with NGOs.

On top of that, an “expert of the day” will be available to answer questions in real-time as you ask them. They’re here to help, but we also need people will come together and help each other. We’ve heard about so much of this going on offline, we know you’ll have a lot to share here online as well.

If you are now or have ever been a staff photographer, please check in next week and join the discussion: ask a question, offer advice, and make some new contacts. If you’d like to contribute your thoughts about transitioning from a staff position, please email us this week: resolve [at] livebooks [dot] com. We’d love to hear from you and share your story (and website) with the community!

From the new ad campaign 'Meet Dubai' for Emirates Airlines. Photo copyright 2009 Doug Menuez

Ross Perot once told me that when he was starting his new company, no one would invest in his idea except his wife and mother. “And that’s why I have 3.3 billion dollars!” he said, with his characteristic ear-to-ear grin. “It’s all about equity son, equity.” His risky hard work paid off, but Ross was also lucky that he had some money from his wife and mother to start out with. That’s not realistic for most people starting a new photography business. You’ll need to use other people’s money to do that, the kind you find in a bank.

In my last column I mentioned writing a business plan and getting an SBA (Small Business Association) Loan. The good news is, the Obama administration recently beefed up the SBA, and there is a new push to give out a bunch of $35,000 loans. What are you waiting for? Write the plan! You might qualify for more.

Tell Them Who You Are
One small problem you might run into is that most bankers know little about photography and are skeptical that there is much money to be made with a camera. They understand restaurants or furniture stores, but they usually don’t get many photography businesses applying for loans. (That’s probably because, unlike furniture store owners, photographers expect money to arrive via magic, without the normal agony of sweating up a five-year income projection.)

In order to overcome the banker’s doubt, your business plan has to be solid, satisfying their need to understand what you are selling, who you are selling to, and how much money you expect to make over a set period of time. They need to be able to asses the risk for the return of their loan. It will help to clarify your vision for your future to the point that you can explain it in a mission statement that is 25 words or less. Tips for writing business plans are all over the internet, especially at SBA.gov.

Show Them What You Do
When I first heard about the SBA in 1993, I was technically bankrupt, having spent my life savings on my first book project. I won’t deny that learning to create spreadsheets and to write marketing and sales stuff was a nightmare. Like being stabbed in the eye over and over.

On top of that, I felt completely out of my element as a photographer going in to meet the banker. Although I’d been trying to build a relationship him over the past few months, I was sure when I asked for this big SBA loan, he would laugh me out of the bank. But I was pretty desperate, with a mortgage, a wife and child, and a ton of debt. I had to try.

On my way out the door for my bank meeting, I did something people might laugh at: I grabbed my portfolio to show my banker. I knew my business plan might not get through, but I was pretty sure I could get his attention with my images of news events, sports, and celebrities. Turns out, I was right. A banker’s world is fairly predictable; lots of numbers. It was a welcome break to go through my work, and it gave me the chance to connect on a basic human level with this critical decision maker. I got the loan — $100K — and never looked back.

Get Them On Your Team
An important part of this story is the concept of “relationship banking.” I had gotten to know my banker over time. It’s important to identify a bank in your town that is actually supporting small business through it’s lending policies — even in this economy — and then make friends with the bank manager.

Build a relationship as you would with a picture editor you want to work with. Take out a small loan, even $5,000 and repay it regularly over three months. Take out another loan for $10,000 and repay that quickly. Build trust. Then bring in your plan, along with your portfolio, and make it happen.

After I got the SBA loan for $100K, and knowing I could get my business going with half of that money, I turned around and asked my banker to put half of it in a savings account and freeze it to collateralize a 50K line of credit. That told him how serious I was and how hard I intended to work. It also gave him another incentive to help me grow into a larger customer. And I asked him to agree that if I handled that credit line properly, that line would be unsecured in a year. He agreed and a year later I had both the SBA money and the credit line, giving me ample capital for further growth: new equipment, portfolios, and serious marketing campaigns.

I learned then that it pays off to engage everyone on my team as a partner in my success — insurance agents, lawyers, and all my labs and equipment vendors. By getting them invested in my endeavors, since they were also relying on me for their business, they all had a vested interest in my continuing success.

This seems obvious in retrospect, but so few photographers take the time to really build relationships with the people they most rely on. A few lunches, gift prints, and keeping people abreast of your new projects and successes can go a long way when times get tough. And if you can get an insurance agent excited about the photographs in your portfolio, imagine how easy that next meeting with an art director will be.

An illustration from Anderson's piece on Free in Wired. ©Wired

There has been a tremendous amount of buzz lately around Wired editor Chris Anderson’s new book Free (which you can, of course, read for free). The basic premise is that if you give something away, more people will “purchase” it than at any other price point (even one cent) and then money can be made on that group, through advertising, secondary sales, etc.

There are big examples (like Google giving away all their services and making money off their associated ads) and smaller ones (like Prince giving away his CD in London’s The Daily Mail, boosting ticket sales for him and circulation for the Mail).

Rob at APhotoEditor predicted a few months ago, “I suspect [Anderson is] going to take a real thrashing on this one since it seems the tide has turned on free. All anyone is talking about these days is subscriptions, premium upgrades and advertising.” His prediction has largely come true, with the New York Times refuting most of Anderson’s points in its review. Malcom Gladwell makes a strong case against Free in the New Yorker as well, which Chase Jarvis referenced in a recent post, after invoking a small firestorm earlier this year when he posted about Anderson’s original Free story in Wired.

Obviously the big question here is, how does this apply to photographers? Craig Swanson of CreativeTechs makes a smart point in Chase’s “featured comment”: “generic stock image libraries are among the digital products already on a steady march towards ‘Free’…while…the availability of, for example, ‘Chase Jarvis’ is quite scarce these days. (Scarce items maintain and even increase their value). So I think this has a lot to do with how we manage our careers and art in the future. To maintain our value we must become our own monopoly.”

I have talked to a lot of photographers and photo industry professionals about the importance of building an audience for themselves, building a reputation around quality work, industry knowledge, and personality. To do that, you often have to give away some things for free. Here are a few models that seem to be working.

Give away content, sell expertise
MediaStorm distributes its top-notch multimedia pieces for free, but makes a tidy sum on its workshops teaching professional photographers and journalists how to make multimedia pieces (and even some of those are free).

Give away general expertise, sell specific expertise
Consultants such as Mary Virginia Swanson and RESOLVE contributor Amanda Sosa Stone and Leslie Burns-Dell’Acqua, along with photographers like Art Wolfe, share their extensive knowledge for free online, knowing that people will pay for their consulting or teaching services once they have gotten to know and trust their work. (What Mary does might actually fit better in the above category, since she provides great information on her blog about events and deadlines, as opposed to generalized versions of her consultations.)

Give away your vision, sell your “monopoly”
It’s not surprising that Chase pulled out that comment about “becoming your own monopoly” or that he himself is the prime example. By constantly sharing his insights, expertise, even iPhones with his huge audience, Chase has created a kind of creativity factory with a built-in audience — clients are no longer just paying for his images, they are paying to be part of that community.

Give away involvement, sell the product
Photographer Simon Roberts has been keeping a detailed blog journal of his process of shooting, editing, and publishing his latest book, We English. Along the way he has done things to help his growing audience feel like part of the creation process, like offering free prints to the first 150 people who wrote him with an idea for something inherently “English.” Having a built-in, engaged audience like this can only help sales of his book and prints.

Give away the filter, charge for the content
This model has fewer proven examples but I think it has great potential. Since everyone is giving content away for free, what becomes valuable is a filter that you trust. PDN recently highlighted the importance of “digital curators,” like Flak Photo, Conscientious, and I Heart Photography, as the first layer of filtering, which galleries are now turning to for new artists. But these filter sites will have to become profitable themselves soon; one way could be for them to become distributors of the art they feature. Or they likely have some other things up their sleeves that I haven’t even thought of. (Stay tuned for a discussion with Flak Photo founder Andy Adams on this topic soon.)

Photography as a profitable business in some ways depends on individuals’ ability to flesh out these models and decide which one (or combination of several) works for them. What are the downsides to each of these? What other models am I missing that seem to work? Obvisouly there are many that don’t depend on the “free” mentality at all. Do you think those can hold out against the free content?

The rare, endangered Oryx are making a comeback in the desert near Dubai because, unlike most photographers, they've learned to master cash flow. ©Doug Menuez

Setting aside the technical skills, the perfect portfolio, the eye, the heart, and the soul that are all so important if you’re going to be a photographer, let’s focus on what you’ll need to be a financially independent photographer. That means setting up a well-organized small business operation that can support your creative endeavors. And the first thing to consider with a business — before the branding, marketing, or anything — is the money. Where will it come from, where will it go, and how much will you need at what times. Whether you’re thinking about launching your first business or already have one, the following information will help you stay solvent and sane.

First, make a plan
The most important thing to do when you’re creating (or updating) a business is to create a business plan. Even something simple will help, and you can find them all over the internet. Basically, you want to create a projection of your cash flow over your next five years. Where is the income coming from? What will your expenses be? How are these both likely to change over the years? Who is your competition?

I know it’s hard to make yourself sit down and do this; I didn’t when I first started and eventually things turned out ok — but I learned some hard lessons. When I finally made a plan, all my decisions were based on my defined goals. I could measure my progress and thereby gained tremendous control over my life and career. The following suggestions will ideally become part of your larger business plan, but they can also be helpful taken on their own.

What kind of business are you?
You’ll need to decide if you want to set up a sole proprietorship, a general (or C) corporation, an S corporation, or a limited liability corporation (LLC). To decide which is right for you, you’ll need to consult with a lawyer, and he’s probably going to want to see a business plan. If a lawyer isn’t an option, there is good information online and at the library, but also consider finding a business-savvy friend to lend their advice.

Yes, you need to learn bookkeeping
It’s best to handle bookkeeping yourself at first, so when you start to grow and hire a real bookkeeper you’ll understand what they are doing and can direct them. Google “bookkeeping” or find a simple text book. Buy Quickbooks or a similar software and read the manual — it’s a pretty good tutorial. Make a Chart of Accounts: a list of income and expense accounts allowing you to track monies flowing in and out. Expense accounts are divided by expenses required to do business, known as Cost of Good Sold, which include anything you spend on production, and Fixed Expenses, which include things that are regular overhead costs like studio rent, insurance, payroll and telephone.

Set up a file cabinet with folders for corresponding expense accounts to keep the paid bills. Once that’s done, create your first projected budget, which will include your best guesses on income and expenses. As you enter the actual expenses and income and review that information, you will really start to learn what small business is all about.

Make reports for Accounts Receivable and Accounts Payable, and set up alerts for when they are 30, 60, and 90 days old. It’s so important to establish a routine where you review your bills and reports on a regular basis so you know what is happening with your business every day. For instance, you should be checking your A/R to determine which are older than 30 days so you can follow up for collection. Never, ever be late on credit-reporting vendors like credit cards.

Make your computer work for you
You’ll also need software to help you run your business. I’ve always used a customized version of Filemaker that incorporates a number of subset databases such as a contact manager and an estimating and billing module. Usually the invoices are then entered by hand into our bookkeeping software, but there are some programs that have bookkeeping built in. And some bookkeeping software such as Quickbooks allow you to make invoices.

If you can find a very cheap standalone  program that does everything, great. Otherwise, I recommend keeping it simple with Quickbooks for invoicing and bill paying. Set aside a clear place for incoming bills (some people like an accordion folder), and schedule a time every two weeks where you enter all the bills into Quickbooks. I’ve been told I’m crazy for this, but I also created a spreadsheet in Excell where I can export my important data in a special format that allows me to analyze it more easily. Details on my blog. Once a month you will also need to reconcile your bank accounts. This is not as horrible as it sounds. I have found online banking to be pretty good now, and often bank systems will link directly to Quickbooks.

Where is the money?
Your biggest problem starting out will be cash flow. It’s important to get paid quickly for your first jobs, to pay your vendors quickly so you don’t damage your credit, and always pay yourself first. The temptation is to keep funneling cash back into the business, but if you don’t pull out money for yourself and your retirement from day one, you never will. Incorporate Paychex and put yourself on payroll. Make sure your paycheck includes enough for savings and auto-deduct to an IRA.

Because cash flow is hard at first, you should have enough saved up to cover your overhead, including projected taxes, savings, and marketing costs, for six months, or at least three if you are super-confident. On a regular basis, look at your bank balance and calculate if you’ll have enough to pay your vendors over the next two months — remember that “The check’s in the mail” is ALWAYS a lie. Try to set up accounts with your main vendors that allow you to pay up to 30 days out. If you are really tight, call your vendors and negotiate for more time. It’s better to stay in close contact with them about problems, with a note, a call, a bottle of wine…

Find a good accountant
Finally, you need an accountant who understands all the ins and outs of photography in case you get audited. It may seem unlikely, but I’ve been audited four times and it all went very well because I always report my income. I believe in paying my share to keep the system going, however imperfect. Taxes suck — get over it. It’s a sign you are making a living and that’s a good thing.

With a clear goal and strong business plan, you can get paid to shoot what you love -- like this dream campaign Menuez shot in Dubai for Emirates Airlines. He was commissioned to document the culture and people of Dubai for a month and the creative team pulled the ads from the edit. Dubai for Emirates Airlines, ©2009 Doug Menuez/StocklandMartel

When most photographers set up shop, they focus on becoming better photographers, naturally. Few photographers, however, develop even the most basic skills they need to run their own business. They hope to hang on long enough to be discovered before they sink under their own lack of knowledge. That’s like building an intricate jeweled house atop quicksand. (Look in the mirror, repeat after me: “You want fries with that?”)

The “get discovered” strategy implies that someone else will take responsibility for your own financial well-being. Ideally, we’d all be born independently wealthy, have our spouse deal with the money, or find the perfect business manager or agent who can do this for us. I’m here to tell you — snap out of that lovely fantasy! Not. Gonna. Happen. And even if, by the grace of the angels, it did, you would still need to learn the basics in order to participate in the decisions being made about your money. Even the best business managers need your help to help you succeed. You really don’t want to be one of those poor schmucks who got super successful but are now penniless because you trusted someone else to handle all your business decisions.

In my new column for RESOLVE, “Seeing Money,” I’ll be sharing what I learned the hard way about the business side of photography during nearly 30 years in the industry. I started as a fine-art student, moved into photojournalism, built a multimillion-dollar advertising studio with a staff of 15, then closed that monster and reconfigured with a minimal crew and low overhead. Along the way I made and lost fortunes.

I never understood money; money was not my goal. I was — and am — all about making great images. But I learned to respect and understand that money has the power to support my most important work. I hope to help you realize the same thing by explaining what works, what mistakes to avoid, and how to recognize the ways our creative brains sometimes sabotage our own success — especially whenever it comes to managing money.

I am constantly trying to answer the difficult question, “How do you reconcile the conflict between art and commerce?” I give the long answer in my workshops. The short answer is, “Get paid to shoot what you love to shoot.” To achieve that, you have to build a solid foundation, step by step, to financial security.

Many photographers have a lot of fear around money; they think it will dilute their talent and corrupt their values, or they just can’t handle the math. I’ll provide pain-free financial management tips you can apply right away. OK, that statement was a lie — there is no such thing as pain-free financial management. But rest assured that my lessons will be less painful than if you did not learn these skills at all. Plus, you are benefiting from all the pain I’ve already gone through to get where I am today. Best of all, as you begin to learn and apply fundamental business lessons, you will find that you gain confidence and actually begin to enjoy the business part of your photography business.

In this “Seeing Money” column, I will discuss the steps you need to take right now to start (or save) your business. Check back soon if you wish you knew more (or didn’t realize you needed to know more) about:

• basic bookkeeping
• writing a business plan
• getting an SBA loan and line of credit
• working with an accountant
• managing cash flow through accounts receivable/payable reports
• insurance
• legal issues
• important business tools