Where to Invest Your Money?
Let's look at what this really looks like. Okay, so let's talk equipment budget first off and what do you really need to do your job? Let's think about that. How much resolution do you really need? We have cameras that are super powerful. They can create huge files. What is the magic number? We have to think about what you're creating and what that final product is going to be. Right? Do you really need 50 megapixels? Will 20 do it? What's the magic number? What is your output? Are you giving away digital files that are going to be used on social media? An iPhone will do that. Right? So, how much resolution do you actually need to do your job? If you're doing portraits or weddings and you're creating a 40 inch print for the wall, 20 megapixels will do it. Right? Okay. So, as you're looking at that equipment. I know that a new camera is amazing and it's gonna be so fun, but think about what you need to do your job. Okay? We don't buy the latest and the greatest camera every time it come...
s out. We think about what we have and how it's working for us and we decide if it's worth the additional investment. Okay? Same thing is true for frames per second. What are you shooting? We shoot a lot of whitewater kayaking. People are doing acrobatic aerial maneuvers and so, we need a machine gun (mumbles) so that we catch every single second of that action. Okay? For us, this is more important than resolution right now, because we're not printing billboards. So, for us, this is a big deal. If you're shooting landscape photography, does that matter how many frames per second you have? Of course not. You have all the time in the world. You can go work for a month to get one shot. Right? So, how many frames per second do you need? If you're shooting a portrait session, do you need a fast rate here? Probably not unless you have little kids that are running around everywhere that you are just trying to keep up with, but even then, it's not so critical. A wedding. You need a faster speed as they're going down the isle at the end, but really; do you need eight frames per second for that? Probably not. Think about the output of what you're doing. Backup equipment. This one is critical. Do you need it or do you not? You can't go into a wedding without redundant equipment. It's malpractice. Something will break on the wedding day. It's almost guaranteed. That's Murphy's law and so, if you're shooting that, absolutely, you need backup equipment. If you're shooting landscape photography, if your camera breaks, go to fix it and go try it again, right? Okay, backup equipment. This is another question that you need to ask yourself and then, lenses and a tripod. Do you need these? Are these important? Landscapes, absolutely. Portraits, I would say yes. Weddings, probably. Okay? Different lenses will give you a different look and feel, so as you expand your skill and as you expand what you want to create; your creativity, you're gonna want additional lenses to change the look of what you're shooting. Until then, you need a durable workhorse, you need (laughs) a 24-70 lens or a 70-200; those are your portrait and wedding lenses and you can start with just one of them. Okay? So, the other thing about lenses is how fast of a lens do you need? Do you need something that can see in the dark or not? Is that important to what you're doing or not? Maybe, maybe not. Okay. So, as you're thinking about this $1300 budget, buy your equipment, I'm assuming a lot of you have cameras going into it, right? I would think everybody that is starting out probably has something that they can work with, so go through and analyze what you have, analyze what you need and then start looking online for used gear if this is the only budget that you have and you need something different than what you have. Go find it at the price you can afford. Okay? Alright. Now, let's talk about some other things; lighting. It's really not the camera, it's all about the lighting when you're creating an image, so there are lots of different options that you can choose. If you're doing portraits in the evening and beautiful light, you can probably get away with a reflector. You can use that to bounce light into your subject and you'll have gorgeous light. You could use on camera flash if you're doing a wedding, you better an on camera flash, so you can light them up no matter what. It's not your first choice, but it's definitely a plan B. Right? You've got to be able to light your subject in any environment at a wedding day. Off camera flash. Are you looking for bold, dramatic, beautiful lighting? If so, what kind of lighting are you going to get? Do you need to overpower the Sun? Do you need 1200 watt-seconds? What are you looking for in your images and is your output if you're doing landscape photography? Maybe none of this? If you're doing portraiture, probably some of it. If you're doing weddings, maybe all of this. (laughs) Right? So, as you're starting a business, I would caution that maybe weddings aren't the first place to start, because it's very, very equipment-intensive. Start with portraits. Make some money. Once you make money, you can buy more gear. Right? Okay. So, lighting equipment. Alright. The output. So, I would say the basics for fine art. Camera lens, tripod. Simple. Great way to start out. Right? Portraits. Camera lens, tripod plus some kind of lighting equipment. Weddings. Camera lens, tripod, lighting equipment and backup gear for each of those things. Now, we still, in this equipment budget, we still have to deal with the computer, because that's an integral part of what we do, as well and the computer itself is not as important as your backup system. As a professional photographer, you have to have a way to backup your images. It can be as simple as a couple of hard drives that you copy everything to each hard drive and it's three separate things. You could have an online platform where you upload all of your images online and you have them in house. That could be another way to do it or you could invest in a really complex RAID system, which is what you'll ultimately want to do at some point, but not in this first $3000 budget, but backing up your images; this is one of the benchmarks for being a professional. You can't say, oh my gosh, I had these great images of your portrait session, but my computer crashed, sorry. That does not work. That's not professional, so make sure that invest here and then, of course, another benchmark of a professional photographer is Photoshop and Lightroom and it's a subscription right now. It's super inexpensive. You can get them both for $10 a month. Easy, right? Okay, so that $10 a month comes out of your 100 and then, you better start making money as a professional to pay for the rest of (mumbles) subscription, right? (laughs) And then, some kind of accounting system. This is really important as well, because if you don't know where your money is coming from and where your money is going, it's going to slip away from you. Now, you can invest in an accounting software. That's an option You can get something really simple like the basic version of QuickBooks. You could do it in a 99 cent notebook and just write everything down so that you know where it's coming from and where it's going. It's entirely up to you and your preference, but you do need to keep track of your numbers and I taught another class creating your ideal photography business where I go through in specific detail exactly how to track all of the money coming in and going out so that it gives you useful information and allows you to make informed business decisions Okay? So, if you're curious about learning more about the accounting side of a photography business, creating your ideal photography business is a great resource to get lots of information on that. Okay, so this is your $100 computer budget and again, if you don't have a computer, look for a used; you can get used computer super cheap. May not be the best and the greatest, but it will work for now. Okay? Alright. Marketing tools. You only get $200. So, where should we spend those Dollars? As a professional in this day and age, you have to have a website. It is critical. So, the neat thing is there are so many tools online that you can use to create an incredibly professional, beautiful website for very little Dollars and so, what we use; we use PhotoBiz for our website; photobiz.com and it's a $100 setup fee and then, there are different levels that you can choose from monthly subscriptions starting at $10, $20; it depends how many files you have on your website. One of the really neat things is as part of this class, they are giving you that setup fee for $50 instead of a $100, so we just saved some money on our marketing budget. Right? We can use that somewhere else. And so, you can find that information in the course materials on how to do that savings through PhotoBiz, but it's something great to take advantage of, so we're gonna tack a lot about how to create a website, what you need to include on your website, but this is the budget part of things, so I'm just giving you the overview of where to spend your money. You got to have a business card. They're not super fun to invest in, but they're super important and we're gonna tack later on about what you need to include on your business card. What's important on there? Look and feel, colors, all of that. We're gonna cover throughout this course, but a business card; you can get them for about $40; really nice, gorgeous ones, so we'll start there and then, gift certificates; what an interesting thing to start off with as part of your marketing plan. I always believe that if you can give, you will get so much back in return and so, when we're investing in promotional materials for our business, we always start with give certificates, so that we can say, oh my gosh, I think you would love this. I would love for you to try it. There's no cost associated with it or here's $200 off or here's a $1000 off or whatever that is. We'll talk about exactly how to use that when we go deep into marketing later on. Okay? So, your marketing tools. That's it. Website, business cards, give certificate. Three things; $200 max and if you do the PhotoBiz website, it's only 250, so you can either pay yourself an extra $ or apply that to your equipment fund. Yeeey. (laughs) Okay. Sales tools. This is really important. This is how you're gonna make your money back. You wanna spend a lot of time thinking about your sales and you wanna spend Dollars to make that sales kit shine, so there are really only two things that you need to invest in here. You need to invest in samples to show what your work is and you need to come up with a suitable meeting location. Okay? So, this an interesting thing. You have a world of possibilities in front of you for where you meet with your clients. You could meet at your location which if you have a retail space is easy. If you have a residential location, may be easy, may be not. We had a home studio that worked great where our clients could come right in the front door. It worked great. That was one of our big hang ups whenever we moved into an RV. Where in the world are we gonna meet with our clients? And the answer was very simple. It took us a year to figure it out, but we could go to their home. Right? Like how easy is that? Super easy. It took us a year of agonizing over it to figure it out, but you know what? Our clients love it. I come to them. They don't have to drive anywhere. They don't have to get a babysitter. They don't have to do anything. I just show up and I make it wonderful for them in their home. Almost everybody has a huge TV. I plug an HDMI cable right into their TV. We sit in their living room. It's comfortable. It's easy and amazing. If you're not comfortable going into their home, there are lots of resources in your community probably. We (mumbles) with our clients in a coffee shop. We found a coffee shop that had a small, little conference room that I could reserve for $5 an hour. It was brilliant. Peter walked in with a suitcase. Set up his little display. It was a great meeting spot. Libraries, community centers; they all have meeting rooms. They're usually very inexpensive to rent, so that's an option, as well, so we included this meeting location in your budget in case you wanna rent a small space if you're more comfortable with that. Then, we have this other budget and this is a pretty big chunk of the overall budget. A $1000 out of 3000; it's a third. And it is so important. I allocate it a whole third of the budget for your business setup and what this means is if you aren't registered as a business entity, you probably want to have some help setting this up, so there are a couple of ways that you can do this. There is usually a small business association organization in your community and you can go to them and they will help you fill out the appropriate paperwork for your secretary of state to get your business set up properly so that you have good legal ownership of this entity that you're creating. You could hire an attorney or an accountant to also help you file this paperwork. I made several calls and I got a number anywhere from a $500 to a $1000 to hire either a CPA or an attorney to help you set yourself up as a proper business entity, so what I mean by that is are you gonna start out as a sole proprietor? Are you gonna be an LLC? Are you gonna be an escort? Are you gonna be a (mumbles)? How are you going to establish your business legally? And so, you're gonna need help with that. That's not anything I can tell you, because it has to do with your personal financials decision or your situation and how you wanna operate you business, but here's the guest of how to do it. If you're just starting and you don't have a lot of personal assets, you can start out as a sole proprietorship. If you have a lot of personal assets like a house and a car and investments; things like that, you definitely don't wanna be just a sole proprietorship. You would wanna be an LLC. A Limited liability company and what that does is it separates your personal assets from your business so that if somebody gets mad at you and (mumbles) you, your personal property is protected. Okay? So, proprietor or LLC are the simplest ways to file your taxes at the end of the year. Okay? So, that's kind of the starting out area. As your business grows and you have more income coming in, then you might wanna think about becoming an escort, because it saves you money overall on your personal taxes. The business pays for part of it and it's complicated and we don't have a lot of time to go into it right now, but that's why you need to spend this money to set up your business properly. Are you gonna have a partner? Is your spouse involved or your partner involved? Are you doing that by yourself? That's what the CPA and the attorney can count for you or the small business association. Sometimes, they have free workshops in your community. Okay? So, that's part of this money. Business insurance is another really, really super critical piece that if you don't need it, feels like a waste of money, but boy, if you do need it, you are so glad that you have it, so there's a couple of different kinds of insurance that you can get. Liability insurance is if you are doing a shoot and somebody falls and breaks an ankle; covers that. Okay? Injuries, things like that. If they trip on your front door step or whatever. That's liability insurance. The second kind is indemnification insurance. This is malpractice insurance, so if you go to a wedding and you come back and you have nothing on your CF cards, that's indemnification; critical for weddings particularly. Okay? So, there are a couple of different ways that you can get these different types of insurance, so we have liability insurance through our personal insurance provider state farm, okay? That's one thing. Indemnification insurance; the malpractice insurance, we have through the professional photographers of Americans like $360 a year and they have a trust. If you get into trouble for malpractice that they will represent you and act on your behalf. Okay? So, $360 here and then a monthly fee here. Okay? Really super important. And then, of course, as you're starting out, education is critical. You've got to learn what you're doing and figure it out, so that's all in this other budget and remember, the $3000 is the upfront (mumbles) you're gonna do upfront, but as you start making money, you can start spending money in other directions, so then you can spend on education. You can spend more on equipment. Things like that.
So, taking a step back, Alice asks: How do you know if you really want a business rather than the idea of having a business. She says: I love the idea of making a living, being creative, but you hear it's only 10% of your business; the creative part; the rest is business, so what are some things that we should be asking ourselves as to this like how do I know if I'm ready for the actual business?
Absolutely. So, running a business takes attention and if you have an interest in the business, it's actually quite creative, because as you see, when we work through this class, you're going to be using your creativity as you develop your products, your pricing strategies, your sales strategies, your marketing; all of that can be a creative endeavor and so, as we work through this class, you'll get a feel for that and see if that's the kind of creativity you want to experience on a regular basis, because all of this is part of it. On the other hand, the images; creating images and having somebody say, oh my gosh, I love this. There is a huge reward in that, but you can get that reward not having a business, as well and so, I think that's really the essence of the question. You can create beautiful photography and share it online and get all kinds of accolades and prays and get that same experience and then, you don't have to worry about making money. You can just do it for fun in your spare time and so, that's really where the decision comes in is do you enjoy spending time on your business versus just creating images, because there are about 50%; I would say half business half imaging and creativity although I think being a business is very creative. The other thing is we are getting ready to look into some real numbers of photography businesses across the country on what kind of salary can you expect and so, if you're coming into this industry thinking that you are going to make a million Dollars a year personally, this is definitely not the right business for you. (laughs) I can tell you that right now, but that will take some time (mumbles) what a legitimate salary for a professional photographer looks like and then, you can make that decision for yourself based on knowing what kind of work you're gonna be doing and what kind of money you're going to be paid for that work.
Do you suggest getting a business insurance right away, so like for example, I've been working with smaller outdoor brands and providing imagery for them, but I don't have business insurance and it hasn't come up yet and they've never asked, but I'm assuming since it's there, you're probably thinking it's good to get it right away?
So, yes and no. (laughs) There are always caveats, right? So, I think if you are working with any people on location that you really need to have liability insurance in case they get hurt, because you are liable for that. If you are working in an environment where you have the potential for malpractice as in I don't have any images from the shoot and that's a big deal; if they've invested lots of money and time and resources into your commercial shoots, then, you definitely need to have indemnification insurance, as well. If, on the other hand, you are working in an environment where you create images and you're selling more on stock, then those two items aren't as important. Ultimately, to be a professional, you need to have both. The other thing about the liability insurance is there are certain locations where you can't shoot unless you have liability insurance, so when we get a permit to photograph on location in national forest or something like that, we have to have a million Dollars of liability insurance to even gain the permit and so, it really depends on what your individual circumstances. If you're shooting weddings, yes. Immediately, definitely, for sure on both of those. So, that really depends on how you're working right now and how much risk you're willing to assume, you know? Ultimately, you're responsible in a shoot.
And we also have a question from (mumbles) who says: What about equipment insurance? Is that important as well at this beginning phase?
Absolutely. So, again, yes and no. (laughs) Equipment insurance is only important if you lose your gear, so if you have your camera bag sitting beside you as you're shooting downtown and you're focused on your client and you turn around and your camera bag's gone and it has $10000 of equipment in it, it's a pretty big deal, right? If you just have a small, inexpensive camera that you're keeping on your person as you're shooting, it might not be such a big deal. Here's the cool though. The indemnification insurance that I talked about through PPA includes, I think, $15000 worth of equipment insurance, as well, so if your bag gets stolen, it will help you recover all of that, so you can keep your business running, so it depends the value of your equipment. It depends on the circumstance that you're shooting in and it depends how much personal risk you're willing to take that everything will be okay, so we have a moderate amount. We self-insure for some of our equipment, but we do have kind of the basics. If all of our cameras got stolen, that would be... We wouldn't be able to afford to replace this at a moment's notice, so here's the bottom line on the budget. We just walked through that full $3000 budget on where to spend your money. That's not gonna cover every single thing that you're ever going to need over the course of your business. That's your starting point. After that, you're gonna be like, oh my gosh, it would be so nice to have this new lens or oh my gosh, I would really love to go to this workshop or I would love to do this and I say, do it, but earn it first, so only when you can afford to do this as a business owner. Do you make these additional investments beyond that $3000? If you haven't made $3000 worth of sales, don't invest another penny. Keep working, keep pushing, keep trying to get those clients on the door until you can afford to buy the new things, because the hardest thing for a new business owner is debt. It will suffocate you. It will make you make bad decisions in your business. If all of a sudden you have $10000 on your business credit card and some client calls; a bride calls and wants to book a wedding and all of your radar is saying, I do not wanna work with this bride, you're gonna book it anyway, because you need the money and then, you're going to regret it, so when you don't have debt in your business, you can make sound decisions. You can take bigger risks that will have bigger rewards, so that's how I want you to run your business from the very beginning. Don't fall into a hole right off the bat. Okay? And if you're there, take yourself out as quickly as you can; earn, earn, earn and don't spend another penny until you're out of that.