On Being a Business
Can photography be more than a hobby and a passion? Can you actually make money with photography? In short, yes.
But, in order to answer ‘yes’ to those questions, it’s worth exploring a bit more.
Many photographers spend their time trying to figure out what kind of photographer they want to be, rather than what kind of business they want to run. Our recommendation, before you start thinking about genres of photography, is to consider what kind of business you want to run. Is it a side hustle? Your main source of income? Not for profit? Part of a larger freelance business?
This core decision sets the stage for a lot of things for you – from how you market yourself to how you do your taxes. This macro decision can also lead you to find answers that you wouldn’t normally find out until much farther down the road – like who your local competitors are, how big your potential audience might be, and how best to market yourself. Start at the broadest level and establish a business foundation, then build.
If this is anything other than a primary business for you (i.e. a hobby, artistic endeavor, or side hustle), then set up your website, make a business card, and go ahead and start hustling. Just know that when it comes time to get paid, you’re going to be dealing with a few different things. For one, you’re either going to get paid under the table, which will limit exactly how much you can make, or you’re going to find yourself needing to send clients a 1099 form a lot.
This form, which your clients will send you and you can fill out and send back (and go ahead and keep a copy of it to send to future clients to save some time), allows them to claim you on their taxes. Which means the IRS knows you made the money. Which means you can/will/should be taxed on it. At the end of the year, all those companies will send you back a form that shows what they paid you. Collect all of them and give them to your CPA when you do your taxes.
Furthermore, keep all your receipts related to your business so that your tax person can properly assess what you can write off. This is the path of most out-of-the-box photography businesses, as it’s a relatively simple way to get started, but it leaves a lot of potential on the table. Normally, people who set up their photography business this way have another source of income. And while this is a great way to afford to be a photographer, it also tends to limit the kinds of jobs you can do. It’s much harder to make meetings, travel, or take the days off needed to do bigger jobs when photography is done on the side, and this can limit your growth as a professional. It’s like playing a round of golf with only the putter.
The other way to do business is to actually start a business. By forming a business of one (single member LLC), a lot of doors open up for you. You get better tax rates as a company than as an individual and you can more properly establish your write-offs and business expenses. But also, you can have a business bank account, which allows you to better track everything and get paid directly to your account from clients. This is very helpful for repeat clients, or clients who you do ongoing work for.
Also, businesses treat other businesses differently than they do freelancers; you get more respect and they tend to trust you more, too. And you can hire employees, like assistants, producers, retouchers with much more ease and legitimacy. And, as your business grows, you can apply for loans through your business account, too.
The biggest barrier to forming an actual business is the mindset that you’re an artist, not a business owner. If you can get past this, companies like LegalZoom can set you up quickly in getting the all-necessary EIN number. It takes a bit of investment up front to get all the paperwork done and you will pay some fees, but they make it easy to do and offer tons of services, if you want them, to help you get started. Once you have your EIN number, simply walk into a bank and tell them you want to open a business account – they’ll be more than happy to get you all set up. Next thing you know, you’re a business.
How does this help your photography?
Being a bigger entity suddenly enables you to take on bigger jobs for bigger clients. It’s a near-immediate validation of your skills to be able to talk to another company as a company yourself, and it conveys your commitment and skill level. As the level of your clients grow, so too will the level of your work.
What are the major considerations?
Forming an LLC is the costlier upfront way to go, and it’s time-consuming in the beginning, as you start to uncover all the little things that need to be done to establish yourself, like getting insurance, a bank account, and setting things up with your accountant. But the nice part is that once you’re done, you’re done. Setting up a business is mostly a one-time affair and from that point on, you can focus on your art.