livebooks blog

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.

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Dane Sanders
You don’t always have to leave town to attend a top-notch workshop — Dane Sanders’ Fast Track Road Show Workshop might be coming to a town near you. This traveling workshop is visiting two more cities in the coming months, with more engagements added regularly. Expanding on the principles outlined in his popular book, Fast Track Photographer, Dane’s workshop helps photographers implement his Fast Track Philosophy and discover the strategies and tactics that work best for their business. Also emphasizing community, the workshop wraps up with an informal coffee talk with Dane and the other photographers in the class.
Where & when: Chicago: June 15-16; New York City: October 20-21
How much: $750

Engage
The speaker list — and the guest list — for this “luxury wedding business summit” is always a who’s who of the wedding photography world. By careful cultivating an atmosphere of effortless networking that encourages an open exchange of ideas, information, and inspiration, organizers Rebecca Grinnals & Kathryn Arce cultivate candid discussions of the issues and opportunities facing members of the luxury wedding industry.
Where: Grand Cayman Island, British West Indies
When: June 21st – June 23rd
How much: $2,000

If I Had Just One Wedding with Garrett Nudd
Garrett Nudd’s short-but-sweet workshop may only be one day long, but he promises to cover the full specture of topics that wedding photographers are most interested in, including, marketing, branding, goals and business planning, how to get published, the value of positive vendor relationships, destination weddings, identifying unseen opportunities in a challenging economy, and creating photographic art that commands attention and sets you apart.
Where: Indianapolis, Indiana
When: June 15
How much: $99

Italy Workshop with Gene Higa and Jose Villa
In the highly competitive wedding market, there is never just one right answer to any question. Students at the Italy Workshop will benefit from the synergy of two dynamic instructors, Gene Higa and Jose Villa, who will share experience from their different points of view, different shooting styles, and different marketing approaches. And as far as destination workshops go, it doesn’t get much better than Tuscany.
Where: Cavriglia, Chanti – Tuscany, Italy
When: October 27-29th
How much: $1,950

ROOTS Workshop
In this economy, distinguishing yourself from the competition is more important than ever. This week-long photojournalism-focused retreat in Cape Cod helps photographers become stronger visual storytellers with group exercises, editorial assignments, and a staff that nearly outnumbers the students. ShootQ has also teemed up with ROOTS (a.k.a. Emilie Sommer) to offer a $500 scholarship to one lucky photographer.
Where: Cape Cod, Massachusetts
When: July19-24
How much: $3,200

Wedding Summit
The Wedding Summit, run by Frances Marron and Kristy Chenell, helps photographers adapt to the ever-changing market by focusing on individual business branding, vision, and goals. The Summit strives to provide students with the tools they need to generate maximum revenue in creative, simple, and effective ways.
Where: Orlando, Florida
When: Aug. 24-27
How much: $2,000