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July 9th, 2009

Seeing Money: Tips for capitalizing on your cash flow

Posted by Doug Menuez

Doug Menuez launched his personal blog, Go Fast, Don’t Crash, in March after receiving an overwhelming response to an article he wrote for Editorial Photographers about building a creatively satisfying life as a photographer. During his 28 years in the industry, Doug has achieved incredible success in the documentary and commercial realm, and he shares what he’s learned in this “Seeing Money” column.
©Doug Menuez

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.

“The first thing to consider is the money — where will it come from, where will it go, and how much will you need.”

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.

“As you review your income and expenses, you’ll start to really learn what a 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.

Be Part of the RESOLUTION: Doug is eager to hear what questions you’d like him to answer. What do you wish you knew more about in regard to running a photography business?


  1. July 9th, 2009 at 7:47 am

    Burns Auto Parts blog » Blog Archive » Money, cash, finance

    […] Lube talks about money, more specifically, financing your business. Then today Livebooks posted a piece by Doug Menuez all about dealing with your cashflow and some basic business planning and […]

  2. July 9th, 2009 at 10:15 am

    Miki Johnson

    You can also find great info on photography business best practices at the Burns blog. If you haven’t checked it out, try this post, which relates to Doug’s post:

    Any other good resources out there for this kind of info?

  3. July 9th, 2009 at 10:17 am

    Miki Johnson

    The Burns blog has some more info that relates to Doug’s advice here. Worth checking out:

  4. July 9th, 2009 at 10:18 am

    Twitted by JimHunter

    […] This post was Twitted by JimHunter […]

  5. July 9th, 2009 at 11:40 am


    […] RESOLVE — the liveBooks photo blog » Archives » Seeing Money: Tips for capitaziling on your cash… […]

  6. July 14th, 2009 at 12:58 am

    Seeing Money: Tips for capitaziling on your cash flow « LUX-SF: On Image-Making

    […] Seeing Money: Tips for capitaziling on your cash flow RESOLVE — the liveBooks photo blog » Archives » Seeing Money: Tips for capitaziling on your cash…. […]

  7. July 29th, 2009 at 3:08 pm


    Great idea, thanks for this tip!

  8. September 12th, 2009 at 1:51 pm

    Bill Bartmann

    Cool site, love the info. I do a lot of research online on a daily basis and for the most part, people lack substance but, I just wanted to make a quick comment to say I’m glad I found your blog. Thanks,

    A definite great read…

    – Bill Bartmann

  9. November 4th, 2009 at 1:06 pm


    Very Recently, there has been a good deal of litigation by the
    American FTC against blogs and website owners
    for not revealing their advertising revenue, or existing
    relationships with ad networks.

    What are your personal thoughts about how this could effect
    the blog world?

  10. November 4th, 2009 at 7:34 pm

    doug menuez

    I think it’s always a good thing when there is transparency, truth in advertising and to be clear about commercial relationships. I have various sponsors listed on my blog so no one is confused. I think this is fine.

  11. December 13th, 2009 at 4:19 pm


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