Business 101 Checklist Part 1
All right, okay, so I totally like I admitted last segment totally get that business is not really primary for a lot of creative types, so this may feel a little painful, but it is a necessary evil for us to go over eso we're going over that this is one of one basic this is the major checklist that you guys need to have this to get your business forms and set up I could talk for days and days and days on this I have a lot of resource is on the block at the law taller dot com forward slash creative live on and also did want to say no I said last segment I have a tendency to break website stuff my site went down, but it should be back up thanks to my wonderful husband at home working on that so see they see if I had forward plan, which I tried to in every attempt sometimes it just doesn't work out, but if you guys could go the resource page now, you could be linked to the difference things. But this business one o one checklist is going to be a high level overview of the major things you...
need to d'oh it's I want to get your business set up whether you've been in business for thirty years, he may need to do some re evaluation or you're a hobbyist that's just looking to get into business or in your first year? Because some things may change your life, circumstances can change your just your business plans can change. You always seem to have this checklist in the back of your mind on this is gonna also pair with the art of the checklist segment, which is the last segment for today of things they're always going to be going on that you need to be mindful of in business, we can't get down and dirty on every little subject. The please feel free to ask questions of you guys have anything on each portion, live audience as well as the internet. All right, so if your foundation is shaky, your business will fall notice I didn't say fail repeated falls may lead to a failing business, and when I say foundation, I'm talking about how you set up the insurance that you have the permits that you have, the taxes that you're paying or not paying, these will become stumbling blocks because they were running a race and you could trip in. You may not all the first few times you're eventually going to fall and businesses a race on dh it's a marathon, not a sprint my dad is always instilled that in me, and I tried, and still that in all of my clients, and this is especially true for those who may still be in school. If they're taking care of family members who have elements or children, or what other riel world life jobs, you may just have to go at a slower pace than someone else, but it doesn't matter where you are on that path you need. Have the foundation set up forms who did a survey last year, and we've all heard this before that eight out of ten entre nears fail within the first eighteen months of opening up, and I don't think this has anything to do with the lack of creativity that we have creatives were in this for the creative aspect. We love it, I don't think has anything to do with that? I don't think it has anything to do with oversaturated market, because guess what? Every market is saturated. If I had a penny a quarter of a penny for every email that I get a day that says my area saturated, what can I dio? I'd be in the bahamas right now, because everywhere saturated our industry, reality has a very low barrier to entry, you know, just what could be going and can be bad it's a double edged sword, but good and bad news is that eight out of ten of the entrepreneurs that enter fails in the first eighteen months aa lot of those, my personal opinion and statistics show is because they don't get the foundational legal business requirement basic set up or they have done it. They close it off and they move forward and they don't look back. They don't do any reevaluation later on down the line, you gain a business partner, you have multiple kids, you end up having kids or you get a studio and they don't do any re evaluation there's still operating on the exact same foundation, so the checklist that we're going to go over is that you need how the proper legal formation, proper permits in licenses, remitting your appropriate taxes, getting the right insurance policy for you and also using of contracts, marcus said. This is a really high level overview, because we're just gonna do a little quick, get in and get out of this is one a one prefer the resource is they are linked on the blogged as well. All right, business is work on hisley that's why we're here, but we're going to break that down. This is the stayner we're going to be used as we go through. Each of these checklists when I talked about in the last segment, we don't just decide we need tio or identify that we need to do laundry, identify that we need to be efficient. We have to also decide and act and that's how we're going to break down each of these is could help to figure out well, we know we need to be formed, but what part of that is it? Is it worth? Is this each of these business checklist acts? Are they they work that are valuable to our business? Oh, do you have an obligation for this checklist item? And this is more of a legal one. I'm gonna break this down a second. Do you have a responsibility? And what are the keys? Which is going to be actual items that I'm gonna give you guys to move forward? All right, so for the w, which is what is the worth and value aa lot of times people use the term worth and value interchangeably. I'm really breaking it down a little bit more. Just like I mentioned in the first segment. Compensation is more than just money. It could be having quality of life more time with your family for here. Worth is actually the more than monetary material value is what I could physically sell my business for what it's physically worth it the value I put value in my business of getting to spend time with my kids I have value in it even if I'm not maybe making that much for making what I want to make I still had may have increased value in the fact that I have freedom of choice is I have the freedom to shoot what I want to shoot I have the freedom to decide to market here to network with that person or not and so worth is more of the financial amount and the value is that transit intrinsic values the way this is going to play in is that a lot of these checklist items require a monetary or physical investment up front that's the worth and value you have filing fees or acquisition permits, you're going to require yourself to put out some money but not that big a deal is we're going to see because it's going to spring you forward for moving on to the future. So is your business worth protecting? Is your income worth protecting especially if this is your only income or if you're working to want to quit a full time job or you're trying to get through school and make ends me, then your income is worth protecting and is there value to protect yeah it's that freedom that we want to have in order to be able to make our choices and do what we want we'll leave this that for one second because there's some people furiously scribbling here but this is the standard of the w on each of these that we're going to evaluate what is your obligation? This is a defining a binding promise contractor since the duty this is more what you're required to dio and were more likely to do something that were legally required to do at risk of fines and fees and being put out of business. So you want to make sure that you have these things in order to have be able to avoid the money because sure I loved invest that money and more marketing to get my name out there or maybe one of my outsourcing things that identify tomorrow is the cleaning aspect I'm tired of cleaning all the time and, um you know, maybe I if I can avoid fees and fines by doing things right then how that money in order to put elsewhere so my examples for obligations are for example is required to have a sales tax permit you are required to have one of the state if you're enacting business if you're putting yourself out business if you're not sure if you are putting yourself out as as a business resource on the block to help you kind of identify that, but any time that you're setting yourself up in your taking money you are a business whether you identify yourself one is not where you formalized to set up its not so you have an obligation, a legal obligation for in your state, based on the laws to do sales tax so that's, where the whole legal obligation comes from, and you also have contractual duties, it's your clients that are legal duties, that contract's not just to hold them, so what they're required to do to pay the retainer to show up for the session ordered by a certain day, you have duties in there as well, there's things that you have to deliver so it's, not even that your just setting expectations, but you're also legally required to do that, and what is your responsibility? This is more of a duty or task that you may be required, but it's more expected of you it's an obligation, but can go a step further. For example, you provided legal contracts to your clients, like I said is for the protection of both. It may not necessarily be required that you have a contract to define because there's legal things, that you can create a relationship without having a physical written contract, but you kind of have a responsibility to your clients to set the expectations, let them know what's going to happen, let them know if they're going to be assessed any fees, if they don't border by a certain date or if what your completion schedule is going to be and all those sorts of things and educating clients this is not required by law you're not required to tell your clients how to prepare for a session, what to wear where you're going to shoot and all that kind of stuff but aren't you responsible? Yeah you're pretty responsible to set the expectations and not to yourself to be able to ensure that you get all the information you need but also to help them feel better about their investment in you and the purchase of products and going forward with the relationship and then the keys are given explanation or identification or they provide a solution and this has said that's going to be the actionable items that we go through here to be able to actually act on each of these checklist items, extra tips and tricks to making that step of business less work and again there's the website for the resource is so the very first thing on the checklist that we have is make sure that we have a legal formation aa lot of times people forget that um they really they just start taking money to get a camera it's awesome they start shooting to start taking money just to cover gas and then client start asking for prince before you know it you're actually in business and you don't realize it a lot of times you're still defaulted into a legal formation and many states but you may not necessarily be protected in the sense in some states require that if you haven't filed to let them know that you're doing this as you haven't done any formalized aspect you could be fined on dh you don't want that I don't want to deal with the government any more than I have to because I want to focus on the creative aspects I want to focus on being able to shoot and mike clients because I'm having to spend three and a half hours on the phone with the irs that's three and a half hours and I'm not joking I did that one day three and half hours of trying to find the right person to talk to you about something that's three and a half hours that I'm just take away from my kids for cleaning my house from shooting that's all two two and a half sessions right there that I could have shot in that amount of time so my suggestion for this is it's always start looking what is the worth of the investment every state but based on the formation type that you choose of its llc sole proprietorship or corporation it's going to be different? I always hear people or I read remember my stocking in forums they're always what formation should I set up the ass and you get all of these people who just list all this this and this and this and this but everyone circumstances may be completely different they may have a different financial investment, they may have different liabilities in their life that they need to protect s so you don't want to just blindly go into that. You really want to assess your own personal situation to see what you're worth of the investment is because some for one location we were just talking about this on break a certain formation maybe a one time fee that covers you for life where is another state? Could be you have a yearly feeble a couple hundred dollars and so it may be different you may need to get creative on the formation and sat up and so and then this's kind of makes sense if you are not set up, you shouldn't be taking money should be acting like a business side note there are hobbyists that can take money under certain irs code laws. I'm not really all upon that's kind of the scope what we're talking about here, but for the most part, if you're taking any money at all even if it's on lee to cover your gas or just the dvd that you're selling or just us be for the session you are still taking money you still need to be a formalized set up business if not to avoid thie the fees and fines because it's the law but also because you have a responsibility to your client. So the three main types of the structures here that you can choose from are the sole proprietorship and llc or corporation. One thing I do want to note here I call it the legal formation that's what it is, but a lot of times people interchangeably used the term license for formation and it really depends on your state because some states you set up as a certain formation, then you have to have a separate business license. Some states they call that formation a license, so be sure, whatever state if united states obviously, if you're out outside of here, this doesn't apply. But be sure that the state that you're in and if you're ever in a conversation with somebody, that you identify the actual terms that you need because people start getting confused. What's also said, I need a business license well, is that on top of your formation? Because then that's, another step that's, another layer on this legal stuff that you need to take care of and the responsibility you have responsibility clients to be a legitimate business when I go to a restaurant, I assume that they're following all the laws, they have a responsibility to me, especially restaurants, to follow health code laws, it is no different for us as business owners to be exempt from following and be informed and notifying the state that we're doing business then when I go down to apparel store or restaurant, they have to fall laws we have to follow us, we're all business owners it doesn't matter that you're in your home and they have a brick and mortar place you're still the same when it comes to being a legal business set up and so your business act like one of my recommendations for this is I always hear people say well, just top your cpi and will help you figure out what type of information that you should say one of these three types that we talked about here I love cps was fantastic, but I also think that a lot of times cps they really good no one just what the tax circumstances could be based on the formation you choose but there's a gap of lions ability that's outside of tax and this is like the liability of someone tries to sue you that business attorneys need a handle. So when you go to do one of these find someone that is either able to provide a well rounded knowledge of both areas when I always supplement whenever I consult with clients I supplement with cps because they're required to keep up on tax laws in such justice like attorneys are required to keep up on new laws they I don't just talk with one or the other you need to kind of have the full rounded view of talking to both on and once I know what I do want to make here. People often confused accountant determine countin bookkeeper interchangeably accountants cps are licensed by legal board they're the ones that are actually governed they're required to keep it up typically bookkeepers are just individuals that keep books they're no have any legal oversight in order to require them to know what the tax benefits are for you. So while it may look like it's cheaper to go for a bookkeeper who can kind of advise, they're not really advising his personal opinion at that point there's no legal advisement being given so stick with that is there any questions so far? Wait, yeah kind of figure there because that's a lot of it is a lot to take in because it's definitely a complicated situation so here's one of our regular snappy gourmet what would be the advantage of going to an attorney to set up your business rather than an online like legalzoom? Ah well, legalzoom ous far as I'm aware they can't really respond, they don't for many client attorney relationship, so they don't really do it personalize assessment um, of your actual business and it could be completely different again based on your life circumstances or where you live uh anything I don't know I'm just not gonna get set company, but I just I'm really more hands on in knowing it's better to have more individualized I kind of look at it the same way as photographers, you know? Then we had the big mainstream box studios that shoot and sell like a sheet for like twenty five cents and then you have the individual portrait photographers who really dedicated individualized I kind of see it the same way you have the big bucks or you have the individual eyes and you're gonna get more benefit going up a little bit more, but if you just invested put into your costs, you're going to recoup that you're actually going come out ahead because you'll have to worry about it later on you I think personality because a big part of it right? We talked earlier about creativity on if they know you and they know your specific business and correct me if I'm wrong, they potentially be more creative with how they provide their services. Agreed agree? Yeah, definitely little tailor it to what she want a course I always encourage don't just either just find a blanket lawyer either you need to find one that really works with what you d'oh because when you go through law school we kind of learn all the different laws, but I couldn't touch medical malpractice to save my life because I am not interested in it and I don't I don't keep up on it that's not what I focused my continuing education on I can focus my continued education on business contracts and transactions in this kind of stuff, so when you go to find one, you want to make sure that it is specific and even better if you can find one that's a lawyer as well I mean a photographer as well or in the creative industry to help you because then they have a little bit more insight given example I have the contract forms on my sight and when I draft them I actually have a multi attorney rick view because that is my baby I want to have objective eyes look at it well, the lawyer that I had that works with me to just kind of be my you know, to ping ideas off of and read it he is a business transaction, a lawyer so he does business and actions I do business transactions but he's not a photographer he's never been a photographer, he doesn't have a creative bone in his body for watching. I'm really sorry, I don't mean that in a bad way, but he will always respond I would have never thought about x and that's kind of why I don't like the big box use of contracts and set ups and stuff because it's this very box here you go, it's. Not that he would never think of having a completion schedule or require liken expire a gallery in order to have your clients to be able to, um, ordered by a certain day or haven't archival feet. He had never thought about something that would have the bare bones of the legal that is it's sufficient by law. But is it really benefits official and going to help me? Because whenever I look at my formation or my contract, I want there to be also customer service opportunities and marketing benefits and other things that I could dio so for example, like that provision, I would have included about the gallery expiration that he wouldn't have, I cannot only have it there as a contract provisions, but I can also use that as a customer service tool because I can waive it for a client I can get individualized. I had a girl whose husband came home from iraq. I do, they're welcome home pictures and woman I'm sorry, not a girl, and she she got really busy and she missed the deadline even though I had sent reminders. But I've been there, my husband deployment. Couple times I know how busy it is and the reintegration so I was able to connect and say, hey, I totally get it you know, it's normally a twenty five dollars on archival fee but I'm gonna go ahead and wave it for you is customer service just this one time? You know? Go ahead, take your time and go let's extend it for thirty more days and it ended up being able to be a benefit if it and because I had that in the contract, not only was I put my feet my client's feet to the fire before individualize put that in there, then I can individualize use it as a customer service and marketing tool is what? Get complete answers. I talked about this stuff all day, okay? So that's my super important, though, with the legal formations just to make sure that you're really going to target in on what's really in important for you on the structures, the main thing that I want for target first to really look at is the liability protections that you can receive just in formation aa lot of times I see in forums get set up, get yourself sex permit, get your insurance, ok, yeah, we're going over that, but just gets up and then just get insurance, will insurance policies are be all end all there's holes, you know, there's things that they don't cover where so you want the other level protection, which is your business formation so you want to pick one that fits your financial? I guess I should open up the keys for you guys um fits your financial situation, your long term business plan but also provide you the liability protection because for me I'm going to fuse it. I'm going to choose the structure that's gonna limit my personal liability all my personal assets because I have four kids and a husband, I want them shield it and this is my first line of defense not to say I plan on going out and do anything but you never know, especially if you work in a specialized part of photography newborns that's really sensitive to me weddings can't really redo those either those types of things were really kind of key and to think that lawsuits really could happen on not that not everyone should be protected, but those especially because there's more lawsuits potential for lawsuit there and I want to really limit any chance they can get it getting my family's business assets all right, so then this is the permits and licenses like I said a minute ago, this is on top of the business formation that we just talked about a second ago it could be in addition to is it there the fees and fines? Worse it and there's even more on top of that is, for example, I live in washington right outside of washington d c we have a lot of great monuments, great places to shoot absolutely love it, but there's a lot of requirements of permits or license issue how to shoot in certain areas on. So for me, it is better for me to take the time front to find out if there's a permanent license required to shoot somewhere for multiple reasons one season finds aren't worth it. It's going to take away from me being able to hire someone to do something for me to expand my time, or it's going to take out of my profit and also one of them in the process is shooting with a client. We're out there, we're xiu mei well, they changed the laws that they're now I'm trying to remember. We're student up on capitol hill and you're required of a certain kind of permit and everything's going great! And then all of us and capitol police come up and they're like, oh, you gotta leave what do I d'oh? You know what I mean, like there is no amount of money. That's worth the embarrassment that I just had in front of my client of us getting kicked out and then I get a fear fine on top of it is easier for me to be vigilant knowing that I have to have the proper permits and licenses and then you can also build that in through your contract which is another checklist item that you could require client stephen fund it for you I know that a lot of public parks because of oversaturation as we said earlier photographers the increased number photographers even public parks and locations are starting to require that there's licenses that or be that you have our permits that you have to get I honestly believe that this is a I like it a lot of people complain about it but I really like it because I have in my contract that my client's fund it I don't it doesn't have to come out of my profit they absolutely want that location they're gonna have to pay for and that's ok because I am front tell them that and I also like it too because if it is a part that requires one that's that's a buried other photographers using it they'll be less likely that there's five hundred photographers utilizing that space so sometimes if I know that I have a session they come from out of town and we have to do it I don't and I won't eliminate all possible you know, outside of whether if I want to eliminate all possible things that could impact that session I might pick a high price permit license location that's what the clients air into because they know it's also get increased the probability that's a little bit more isolating could be a little bit more one on one with each other on public parks or doing this speak also to get the money eggs government want their money but they're also finding that people are utilizing for commercial activities and destroying it not taking care of it properly as well. This is a good one a good cross over to networking because I like to use this when I find locations that rick choir certain permits and such that's a great way to start talking to that location such as if it's a we have a manner that's about forty five minutes for my house everyone was led to shoot they just instituted this new year long permanent you could purchase into everyone is up in arms and I'm going yes this is perfect less photographers and open up the door for me to get to start talking to them so we could start cultivating, cultivating and networking relationship with them as well you know I'm gonna be shooting and it's a good way to talk to them I can provide images who mentioned that earlier about the providing of images to vendors and stuff. Yeah, so, you know, I could start opening up the doors for that and it's all because I'm really required to do it anyways. In order to shoot there, I gotta have the emissions. S oh, there's, a lot of worth and value into that it's. Not just that it's legally required.