If you sell your skills and services as a photographer then you're in business, and you have to operate as a business. Whether you just want to make a bit of extra on the side or whether you want to turn your skills and enthusiasm into a full-time, successful business, your attitude needs to be right.
And having the right attitude means that you have to be determined to succeed, you need to have a real belief in yourself, you need to be committed to providing your clients with the best possible service and the best possible quality, you need to be willing to work hard (and to sometimes work long hours).
You also need to be self-motivated, and you need to welcome the sound of the alarm clock in the morning because it means that you can get on with another day of opportunity!
A lot of people go into business for the wrong reasons, and if the reasons are wrong then failure is almost certain. Here are some of the wrong reasons, and if these are your reasons then you need to change either your attitude or your ambitions, because the life of a self-employed photographer is not for you!
- I want to work for myself because I want to have more free time
- I'm only interested in the money, and professional photographers earn a fortune
- I'm an artist and I want to express my art as a photographer
- I want to get paid for photographing beautiful women
- I want to get paid for travelling to exotic places
- I can't find a job
No, I'm not joking, these are reasons that came up in a survey of wannabe photographers!
O.K., before we go on to the interesting bits, let's start with the boring 'business' bits. These are the essentials that you need to consider before you even start your business.
We're in a recession - so is this a good time to go into business?
All the top business people say the same thing - it's as easy to make money in a recession as in a boom!
Of course, there are always casualties in a recession - but if you plan and run your business well there's no reason why you should be one of them.
And anyway, you probably don't have much of a choice because most people go into business part-time because they have a lot of work coming their way and need to put things on a proper business footing or they go into business full-time either because they've been made redundant or because they have too much work to cope with holding down a 'normal' job too.
Write a business plan
This is the first step for anyone starting out. It is a statement of your plans, intentions and objectives both in the short and the long term.
It should include estimates of income and expenditure, the direction in which you see your business to be heading, details of the markets available to you, plans for future capital purchases, information about your competition and so on.
No bank or other financial institution will lend you money unless you have a viable business plan. Even if you don't want to borrow any money (and I strongly advise you not to borrow if you can possibly avoid it) your bank will expect to see your business plan and won't take you seriously without it. Perhaps the most useful function of a business plan though is that it will force you to give proper thought to your business plans; it will help you to analyse your own motivation and to define what you actually want to do with the rest of your life.
Books are available on how to write a business plan and on how to impress banks, my advice is to save your money and to ask your bank for help. Banks have useful booklets, they're free and they are tailored to the requirements of that particular bank, unlike books, which are very generalised. Some banks also provide free software, which is even better.
But don't write the business plan just yet, read this book first, think about its contents, talk to your friends about your own personality, strengths and weaknesses and think about the type of photography that suits your personality, skills and abilities. Then write your business plan.
Your trading name
You can trade under virtually any name you choose. Certain words are not allowed, for example British, Registered, Wales, Royal, Scottish, Group, Bank, Co-operative, Windsor, Trust. You can't use words likely to cause offence either, nor can you use trading names that are already registered to existing businesses. It is an offence to use names that are likely to lead customers (or suppliers) to believe that you are part of an existing business owned by someone else. This is called passing off, and if you do it you are very likely to find yourself in Court!
Go to http://www.companies-house.gov.uk for more info.
Subject to these exceptions, you can choose just about any trading name you wish, but the choice of name requires careful thought.
Let's assume that your name is John Smith, you can call yourself John Smith & Co, or John Smith & Sons, but this type of trading name won't tell your potential clients that you're a photographer, so you'll be wasting a marketing opportunity.
You could call yourself Smith's Wedding Photography, and that's fine, but it will be telling potential clients that you only photograph weddings. John Smith Photography will tell people that you're a photographer, will tell them your name and won't limit you to any particular photographic genre - this can be very important because you may change your photographic direction in the future.
One worthwhile tip: You'll need a website, so the first step, after choosing names that might be suitable, is to see whether or not the domain names of your choice can be registered - the chances are that most of your choices will have already been registered by someone else. If possible, your trading name and your website domain name should be the same, for example the website address for the British Broadcasting Corporation is www.bbc.co.uk
Some other legal requirements
If you are trading under a name other than your own you must display your own name on all business stationery (except for compliments slips and business cards).
Here's an example:
People Pics
1 Main Street,
Bradford
YO12 3BQ
Proprietor: John Smith
You must also display a declaration of ownership, giving the name of the owner and his/her private address, at your business premises. It must be displayed in a place where it is clearly visible to all visitors (not inside your private office).
Here's an example:
The owner of the business trading as
People Pics
Is John Smith
14 Acacia Avenue
Surbiton
Surrey
KT14 1AB
You must also provide the name and address of the owner, in writing, to any business contact who requests it.
You can, if you wish, register your trading name, and any logo that you use in your business. This will stop other businesses from using the same or a very similar trading style. It is, however, expensive. More info: http://www.patent.gov.uk
Sole Trader or what?
Most small businesses operate as sole traders. This means that the person who owns the business works for himself and is responsible for all aspects of the business. The owner is personally entitled to all the profits, after payment of liabilities and debts.
It also means that the person who owns the business is personally liable for all business debts.
Some businesses operate as partnerships. This sounds like a great arrangement, because there will be two or more people who share the work as well as the profits. In theory there can be up to 20 people in a partnership, but most people who have been involved in a business partnership will tell you that two people is one too many!
The reason for this is that friction can and does arise when one partner contributes less effort or generates less income, or takes decisions without consulting the other partner(s).
Another potential problem with partnerships is that all partners are severally and jointly liable for all business debts. What this means, as an example, is that if your partner decides to spend £150,000 on a minilab for your business then you will have to pay for it! O.K., I've tried to put you off the idea of a partnership, but if you decide to ignore that advice please don't ignore the next bit - get your partnership agreement drawn up by a solicitor.
And then there are Limited Companies. Limited Companies are actually recognised in law as a separate entity - a person in their own right. Therefore, if the company collapses under a load of debt it will be the company's debt and not yours! This system has been abused by dishonest directors for many years and the laws have been tightened recently, but there are still significant benefits in trading as a limited company if it all goes horribly wrong, provided that the directors have acted honestly.
If your photography business is successful you can expect to earn a lot of money - and there are major tax advantages in trading as a limited company.
There is however a downside - there is more paperwork to do, the accountancy costs are higher and more detailed records need to be kept.
Banks
Bank accounts are of course essential, and you should set up a bank account as soon as you have decided on your trading name. Banks love small businesses and will normally provide free banking for the first year. They will also try to help by offering advice on your business. This is fine, but bear in mind that the person offering the advice hasn't actually run a photography business - and come to that, probably hasn't actually run any kind of business!
Accountants
If you operate as a Limited Company then your Company must appoint a qualified accountant. If you operate either as a sole trader or as a partnership you can manage without an accountant, or you can give your accountancy work to a bookkeeper or to a part-qualified accountant instead. If you appoint an account then my advice is to place your business with someone who is qualified, and who can be expected to save you far more than s/he charges.
A lot of people though find that they can manage a small business without professional help, using a computer programme to calculate their tax liability etc. This can be a sensible approach, because accountants tend to delegate simple work to low-paid, unqualified staff members - so you may not benefit from their professional expertise unless you need specialised advice. Remember too that you can get very good advice from the Inland Revenue, who tend to be very fair-minded and helpful these days.
Income tax
You are obliged by law to tell the Inland Revenue that you have started up in business. You have just 3 months in which to notify them, and if you forget then they will fine you £100 - so do it straight away. Register on line at
http://www.ir.gov.uk/startingup/register.htm
National Insurance Contributions
The rules are fairly complex and depend on whether you operate as a sole trader/partnership or as a Limited Company. Get up to date advice from your accountant, or better still get free advice from the DSS.
Value Added Tax
You'll find guidance on VAT further down. All that I really need to mention here is that
1. VAT is a tax that has to be paid, and if you try to evade payment of VAT (or if you claim money that isn't due to you) you will be committing a criminal offence and you will probably find yourself in very serious trouble.
VAT regulations are incredibly complex and change frequently. As a trader, it's your responsibility to understand and apply the regulations correctly and you're expected to study the 'Blue Book' and the innumerable supplements that the VAT office will send you, and to check their website for changes - an impossible job! But help is at hand, your local VAT office will always give advice and they are generally very helpful. If you follow their advice and it turns out to be wrong you're still liable, but if you can prove that they gave you the wrong information you shouldn't have a problem. They have a high-tech system in place that they seem to believe in - if you ring their helpline they are supposed to ask your VAT No. and/or your name and address. Your call will be recorded and your telephone No. will also be recorded (whether you withheld it or not) so they will have a complete record of when you rang and the advice they gave. Personally I don't trust systems and my advice is to record the call yourself, either with an automatic telephone recording system on to your computer or as a diary entry, writing down the date and time of the call, who you spoke to and what they said.
This is a short extract from the Professional Photography Manual http://www.photolearn.co.uk/webpages/book_professional_photography_manual.html produced by Garry Edwards, who owns Photolearn.
