# NOOBS Guide To Starting A Business



## etnad0

I&#8217;m surprised this hasn&#8217;t been done yet, so I figured I&#8217;d help out the NOOBS that keep asking how to start a business of any kind. This specific guide applies to photography, but can be applied to almost all business ventures. While I won&#8217;t officially own a photography business until February, I know about business from running my own and I&#8217;m taking the same steps to start my photography business.


*Make sure you have a passion for the business.* Think about working at a job you hate. If you start a business just for the money, but you hate the craft, you&#8217;re stuck with it. Your credit and financial well being are also on the line.
*Learn as much as you can about your craft.* There are some things that only experience can teach you about running a business or being a photographer, but having book knowledge won&#8217;t hurt. School will definitely help, but it&#8217;s not necessary to be a successful business owner or photographer.
*Create a company name.* You&#8217;re going to need a name to get your licenses unless you plan to work as a Sole Proprietor, which is a horrible business move for starters. Don&#8217;t call yourself Joe&#8217;s Dog Photos if you plan to take photos of other stuff. It won&#8217;t help your business to have a name like that if you want to get business other than dog photos.
*Decide on your company set up.* You have several choices: Sole Proprietor (bad), Partnership (bad), S Corporation, C Corporation, and LLC. These are the most common types of business setups. With the exception of the first two, they provide protection for your personal assets in the case of a lawsuit.
*Start your business plan.* Even if you plan to go into business by yourself, you need to have a solid business plan. If you don&#8217;t know how to write one, use Google and find out. If you don&#8217;t have one, you are planning to fail by failing to plan. Your business plan should address your company goals, slogans, logos, colors, manager experience, profit/loss projections, market research, competition, overhead, employee wages, exit strategy, product pricing, and quite a few more important business items.
*Write an Operating Agreement.* In most state, failure to do this means your company falls under the default rules of the state. Here is why that is bad: If you contribute 90% of the startup capital and you own 90% of the company, but you fail to write your Operating Agreement, if there is ever a dispute and the company is dissolved, most states split everything 50/50 regardless of the investment of the individual. A well worded Operating Agreement ensures that won&#8217;t happen.
*Write a Marketing Plan.* People in business don&#8217;t just come up with marketing ideas after the doors are open. They either hire people to market for them, or they lay out a plan well before opening the doors. Make sure you know how you plan to get customers in the door.
*Decide if you need partners.* This is where your business plan comes in. If you need a partner or investor, they will want to read it. Don&#8217;t miss out on potential investment capital by skipping step 5.
*Build your website.* In this day and age your website shouldn&#8217;t be an afterthought. It is the online version of a business card. Make sure your website at least has the basics like company information such as: address, phone number, and hours of operation.
*Start a mailing list.* Put a mailing list sign up box on your website. Most companies don&#8217;t do this until after they&#8217;ve missed hundreds or even thousands of potential repeat visitors. I learned this the hard way a while back. Don&#8217;t SPAM your mailing list with daily offers because they will unsubscribe. If you run a Word Press based website, Feedburner is a great free mailing list manager that will update subscribers whenever you update your site. A mailing list is the easiest and fastest way to bring in repeat business with very minimal cost on your part.
*File your paperwork.* You will need to fill out the correct paperwork with the Secretary of State, IRS, Business License Department, and anything else your state requires. This can cost hundreds or even thousands of dollars depending on your state laws. This includes business insurance as well.
*Location, Location, Location.* By this time you are likely ready to find a space. Do some research on the area. Don&#8217;t open a photo shop next to K-Mart because they have their own photo service. I recently saw someone open a Dollar Store next to the 99 Cents Only Store. Dumb idea, and yes they are out of business.
*Get your material printed.* This refers to your business cards, fliers, posters, CDs, DVDs, and any other promotional material that you will need. These are essentials in any business and they need to be finished before opening day.
*Buy your equipment.* Whatever you need and don&#8217;t have, you need to buy before opening day. If you have a shop, you will need counters, cash register, credit card machine, finance book, paper, printer, computer, displays, receipts, and a lot of other stuff. The list can really get long depending on how you want your space to look. The same goes for photo equipment.
*Test your equipment.* I heard that 15% of all equipment is faulty out of the box. I don&#8217;t know if that&#8217;s a sure thing, but don&#8217;t wait until opening day to find out. Test your equipment before you open.
*Set an opening day.* Decide on the best time to open. Holidays are great times to open because you can get a much needed financial boost from the rush. Don&#8217;t open on the exact day, but open a few weeks before if you can, so you can get the word out.
*Sell what customers want.* Don&#8217;t try to make customers want what you have. If you are selling 8x10 photos but don&#8217;t want to offer wallet size, and the majority of your customers want wallet size as well, you can either lose money and refuse to offer it or increase your options and make more money. With that in mind, draw the line somewhere. If you take pictures of pets, don&#8217;t let someone talk you into going into a lion cage to get a picture of their big kitty. Make wise business decisions.
 *Learn from mistakes.* Whether they are your mistakes or the guy next door. Learn from it and try not to repeat them. Example: I didn&#8217;t start a mailing list with a previous business, so there was no way to notify customers when we moved. All we could do is hope the neighbors would tell them.
*Do your accounting daily.* If you let it pile up, you won&#8217;t want to do it. Do it daily and stay on top of it. It will also help you identify where your are wasting money and where you should be spending more money.
*Provide great customer service.* People call their friends and family when your service is good. People write blogs and post on internet forums to tell the world when your service sucks. Don&#8217;t end up on the internet for the wrong reasons.
*Pay your damn taxes.* If you want to lose your business and possibly go to jail, ignore this step. In most states you don&#8217;t pay tax on services or you pay very minimal taxes. Pay them if your state has taxes on services. Hire a CPA if necessary.
*Business is Business.* Don&#8217;t get emotionally attached to your business. In the end it&#8217;s about money and if it&#8217;s not, keep it as a hobby and don&#8217;t waste time and energy starting a business. Starting a business is an expensive way to practice your passion if you don&#8217;t intend to make money. Once your business is no longer profitable, cut your losses, close it down, and move on. Moving on DOES NOT mean don&#8217;t do it again. It could just be waiting for the right time to try again. Don&#8217;t sink $30,000 to keep your business up and running if you&#8217;ve already lost $100,000. We have a saying at the casinos here in Vegas: &#8220;Don&#8217;t chase money you&#8217;ve already lost. It&#8217;s the fastest way to lose more money.&#8221; Refer to Step 5 again, which should include an exit strategy just in case things don&#8217;t work out as planned.
If there is something that I failed to cover, you need to read Step 5 again. Your business plan should be 30+ pages and cover almost anything you can think of concerning your business, including who you plan to ship through, if you plan to ship orders, and if your employees can wear open toed shoes or not. Hopefully someone will sticky this for the NOOBS out there so they don&#8217;t have to keep asking where to start.

Also, notice how much you have to do before opening your doors. The first 15 steps will probably take you 60+ days depending on how thorough you are in your planning. You should also work on your photography skills during this prep time. Skills + Business sense = successful business.

For more information on business types, business plan templates, start up capital, small business loans & grants please visit www.SBA.gov (Small Business Administration)


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## pgriz

A few comments.  Agree with most of yourpoints.  Definitely, from a startup business perspective, youve covered the bases. Id add a few more:
7b)  Pricing is a key element of any marketing plan.  The pricing has to be calculated both from the bottom up (direct cost of providing a service/product times the turnover rate, plus overhead costs and contingencies and profit), and from top-down (competitive pricing, market demand, market share, market dominance).  Getting the pricing right for your particular niche is a sign of business genius.
23)  Know your core competencies.  Thats your competitive advantage and pricing advantage.  Know also when youre leaving your area of competence and are heading into less effective areas.  Its ok to do this to develop a new market, but it is a drain on energy and resources if those are more or less one-offs.
24)  Every business gets some bad clients.  Decide ahead of time how you will a) prevent the problems in the first place, b) control the situation if it arises, and c)know your legal recourses if things start getting out of control.  Depending on the business, qualifying your prospects and estimating your risks in taking on that prospect as a client maybe a necessary step to take.
25)  Know the difference between working IN the business and working ON the business. And part of working ON the business is taking mental breathers to keep perspective and see what else is going on. Doing business 24/7 is not good for any business owner mentally,physically, spiritually or emotionally.
26) Embrace change as a competitive edge.  Nothing stays the same so part of adapting to the world as it changes is to keep changing with it.  That means ongoing education in both the processes of the business, and on where your business fits in to the overall world.  Being the most efficient and cost-effective buggy-whip maker is not a smart business move.


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## etnad0

pgriz said:


> A few comments.  Agree with most of yourpoints.  Definitely, from a startup business perspective, you&#8217;ve covered the bases. I&#8217;d add a few more:
> 7b)  Pricing is a key element of any marketing plan.  The pricing has to be calculated both from the bottom up (direct cost of providing a service/product times the turnover rate, plus overhead costs and contingencies and profit), and from top-down (competitive pricing, market demand, market share, market dominance).  Getting the pricing right for your particular niche is a sign of business genius.



Great points. Keep in mind that this should also be part of Step 5 and detailed in the business plan. Very good info.



> 23)  Know your core competencies.  That&#8217;s your competitive advantage and pricing advantage.  Know also when you&#8217;re leaving your area of competence and are heading into less effective areas.  It&#8217;s ok to do this to develop a new market, but it is a drain on energy and resources if those are more or less &#8220;one-off&#8217;s&#8221;.



Also more great info. Thanks.



> 24)  Every business gets some &#8220;bad&#8221; clients.  Decide ahead of time how you will a) prevent the problems in the first place, b) control the situation if it arises, and c)know your legal recourses if things start getting out of control.  Depending on the business, &#8220;qualifying&#8221; your prospects and estimating your risks in taking on that prospect as a client maybe a necessary step to take.



Great advice that they should also add to their business plan if they haven't already. I haven't because it's in my head, but I think I'm going to put it down on paper now that you mention it.



> 25)  Know the difference between working IN the business and working ON the business. And part of working ON the business is taking mental breathers to keep perspective and see what else is going on. Doing business 24/7 is not good for any business owner mentally,physically, spiritually or emotionally.
> 26) Embrace change as a competitive edge.  Nothing stays the same so part of adapting to the world as it changes is to keep changing with it.  That means ongoing education in both the processes of the business, and on where your business fits in to the overall world.  Being the most efficient and cost-effective buggy-whip maker is not a smart business move.



More great advice. Thanks for adding it.


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## BlackSheep

What about insurance - liability & equipment? That should probably be included in the list somewhere, as it seems to be something alot of newbies don't think of.

Nice job putting this all together.


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## etnad0

BlackSheep said:


> What about insurance - liability & equipment? That should probably be included in the list somewhere, as it seems to be something alot of newbies don't think of.
> 
> Nice job putting this all together.



Thanks for the compliment. Check #11 insurance is there.


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## Bitter Jeweler

Now we'll see if this can get stickied!

I wonder if people report it as "Sticky" material, will get it done?


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## camz

It tooks almost *one year *to write out our business plan when I put up a care home for the elderly and the mentally challenged at the age of 23 - and continously revised it six months after that. I sold it 4 years later at full capacity and the height of the real estate market in 2006. etnadO, this is really good, I honestly can't believe how many people go into business balls to the wall without even knowing a tenth of what you listed above.


I nominate this thread to be locked ontop of the listings in the "General Shop Talk". It'll save people time, grief and alot of debates/fighting. And you know January is a coming...new DSLR purchases! 

Wadaya say OVERREAD & COMPANY?


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## bazooka

Question: Under what circumstances would it be better to be a sole proprietor?  If none, why is it available as an option?

Can you expand on each of these different type of business structures or do you have a link or book that you recommend that explains them?


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## gsgary

BlackSheep said:


> What about insurance - liability & equipment? That should probably be included in the list somewhere, as it seems to be something alot of newbies don't think of.
> 
> Nice job putting this all together.



Should be in step 5


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## gsgary

Bitter Jeweler said:


> Now we'll see if this can get stickied!
> 
> I wonder if people report it as "Sticky" material, will get it done?



That should be in step 5


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## gsgary

camz said:


> It tooks almost *one year *to write out our business plan when I put up a care home for the elderly and the mentally challenged at the age of 23 - and continously revised it six months after that. I sold it 4 years later at full capacity and the height of the real estate market in 2006. etnadO, this is really good, I honestly can't believe how many people go into business balls to the wall without even knowing a tenth of what you listed above.
> 
> 
> I nominate this thread to be locked ontop of the listings in the "General Shop Talk". It'll save people time, grief and alot of debates/fighting. And you know January is a coming...new DSLR purchases!
> 
> Wadaya say OVERREAD & COMPANY?




That should be in step 5


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## gsgary

bazooka said:


> Question: Under what circumstances would it be better to be a sole proprietor?  If none, why is it available as an option?
> 
> Can you expand on each of these different type of business structures or do you have a link or book that you recommend that explains them?



That should be in step 5


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## etnad0

bazooka said:


> Question: Under what circumstances would it be better to be a sole proprietor?  If none, why is it available as an option?
> 
> Can you expand on each of these different type of business structures or do you have a link or book that you recommend that explains them?



For more information on business structure, business plan templates, start up capital, small business loans & grants, and more please visit The U.S. Small Business Administration | SBA.gov (Small Business Administration)


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## etnad0

bazooka said:


> Question: Under what circumstances would it be better to be a sole proprietor?  If none, why is it available as an option?
> 
> Can you expand on each of these different type of business structures or do you have a link or book that you recommend that explains them?



Regarding your question about being a Sole Proprietor, it is never a good idea. You can be sued for all of your personal assets if something happens. With a Corp or LLC you have protection from such lawsuits. Sole Proprietor is a cheap way to do business if you don't have the cash to file the proper paperwork to form a corporation. You also need to figure out which structure will work best for you. If you don't mind risking everything, Sole Proprietor will work just fine. The same applies to Partnerships. I personally always file for an LLC. Here in Nevada it's only $75 to incorporate and $125 for the initial list of officers. $200 total for corporate status and protection.


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## 2WheelPhoto

This thread delivers


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## bazooka

etnad0 said:


> bazooka said:
> 
> 
> 
> Question: Under what circumstances would it be better to be a sole proprietor? If none, why is it available as an option?
> 
> Can you expand on each of these different type of business structures or do you have a link or book that you recommend that explains them?
> 
> 
> 
> 
> Regarding your question about being a Sole Proprietor, it is never a good idea. You can be sued for all of your personal assets if something happens. With a Corp or LLC you have protection from such lawsuits. Sole Proprietor is a cheap way to do business if you don't have the cash to file the proper paperwork to form a corporation. You also need to figure out which structure will work best for you. If you don't mind risking everything, Sole Proprietor will work just fine. The same applies to Partnerships. I personally always file for an LLC. Here in Nevada it's only $75 to incorporate and $125 for the initial list of officers. $200 total for corporate status and protection.
Click to expand...


Yeah, it seems like common sense to get an LLC.  I don't want to risk losing my home if my frame falls of the wall of someones home and kills somebody....  So of the people here that run their own photog businesses, you guys are all LLC's or Corps?  No Sole proprietorships represented here?


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## KmH

etnad0 said:


> bazooka said:
> 
> 
> 
> Question: Under what circumstances would it be better to be a sole proprietor?  If none, why is it available as an option?
> 
> Can you expand on each of these different type of business structures or do you have a link or book that you recommend that explains them?
> 
> 
> 
> 
> Regarding your question about being a Sole Proprietor, it is never a good idea. You can be sued for all of your personal assets if something happens. With a Corp or LLC you have protection from such lawsuits. Sole Proprietor is a cheap way to do business if you don't have the cash to file the proper paperwork to form a corporation. You also need to figure out which structure will work best for you. If you don't mind risking everything, Sole Proprietor will work just fine. The same applies to Partnerships. I personally always file for an LLC. Here in Nevada it's only $75 to incorporate and $125 for the initial list of officers. $200 total for corporate status and protection.
Click to expand...


I strongly disagree that being a Sole Propietor is *never* a good idea. For many small business it makes the most sense even when the issue of liability is considered.

Business Structure and Tax Implications | SBA.gov

"State Income Taxes	Nearly every state levies a business or corporate income tax. Like federal taxes, your state tax requirement depends on the legal structure of your business. For example, if your business is an LLC, the LLC is taxed separately from the owners of the business, while sole proprietors report their personal and business income taxes using the same form used to report their business taxes."

Which also means more stringent reporting and record keeping requirements for business that ar not SP's.

Like most business legal issues, getting the advice of a qualified attorney and accountant is preferable to business legal advice in an online photography forum.


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## KmH

bazooka said:


> Yeah, it seems like common sense to get an LLC.  I don't want to risk losing my home if my frame falls of the wall of someones home and kills somebody....  So of the people here that run their own photog businesses, you guys are all LLC's or Corps?  No Sole proprietorships represented here?


Who says you could lose your home if your business type is a Sole Proprietorship?

My last business was a Sole Proprietorship.


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## 2WheelPhoto

bazooka said:


> etnad0 said:
> 
> 
> 
> 
> 
> bazooka said:
> 
> 
> 
> Question: Under what circumstances would it be better to be a sole proprietor? If none, why is it available as an option?
> 
> Can you expand on each of these different type of business structures or do you have a link or book that you recommend that explains them?
> 
> 
> 
> 
> Regarding your question about being a Sole Proprietor, it is never a good idea. You can be sued for all of your personal assets if something happens. With a Corp or LLC you have protection from such lawsuits. Sole Proprietor is a cheap way to do business if you don't have the cash to file the proper paperwork to form a corporation. You also need to figure out which structure will work best for you. If you don't mind risking everything, Sole Proprietor will work just fine. The same applies to Partnerships. I personally always file for an LLC. Here in Nevada it's only $75 to incorporate and $125 for the initial list of officers. $200 total for corporate status and protection.
> 
> Click to expand...
> 
> 
> Yeah, it seems like common sense to get an LLC. * I don't want to risk losing my home if my frame falls of the wall of someones home and kills somebody*....  So of the people here that run their own photog businesses, you guys are all LLC's or Corps?  No Sole proprietorships represented here?
Click to expand...


What about insurance?  As cheap as it is in this industry seems the only way to go anyway.


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## etnad0

KmH said:


> etnad0 said:
> 
> 
> 
> 
> 
> bazooka said:
> 
> 
> 
> Question: Under what circumstances would it be better to be a sole proprietor?  If none, why is it available as an option?
> 
> Can you expand on each of these different type of business structures or do you have a link or book that you recommend that explains them?
> 
> 
> 
> 
> Regarding your question about being a Sole Proprietor, it is never a good idea. You can be sued for all of your personal assets if something happens. With a Corp or LLC you have protection from such lawsuits. Sole Proprietor is a cheap way to do business if you don't have the cash to file the proper paperwork to form a corporation. You also need to figure out which structure will work best for you. If you don't mind risking everything, Sole Proprietor will work just fine. The same applies to Partnerships. I personally always file for an LLC. Here in Nevada it's only $75 to incorporate and $125 for the initial list of officers. $200 total for corporate status and protection.
> 
> Click to expand...
> 
> 
> I strongly disagree that being a Sole Propietor is *never* a good idea. For many small business it makes the most sense even when the issue of liability is considered.
> 
> Business Structure and Tax Implications | SBA.gov
> 
> "State Income Taxes    Nearly every state levies a business or corporate income tax. Like federal taxes, your state tax requirement depends on the legal structure of your business. For example, if your business is an LLC, the LLC is taxed separately from the owners of the business, while sole proprietors report their personal and business income taxes using the same form used to report their business taxes."
> 
> Which also means more stringent reporting and record keeping requirements for business that ar not SP's.
> 
> Like most business legal issues, getting the advice of a qualified attorney and accountant is preferable to business legal advice in an online photography forum.
Click to expand...


This is great advice. Get legal advice from an ATTORNEY. As far as my opinion, I have to admit it is biased because here in Nevada WE DON'T HAVE ANY STATE TAX LOL. We file our taxes quarterly (once every 3 months) so it's not that bad.


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## etnad0

2WheelPhoto said:


> bazooka said:
> 
> 
> 
> 
> 
> etnad0 said:
> 
> 
> 
> Regarding your question about being a Sole Proprietor, it is never a good idea. You can be sued for all of your personal assets if something happens. With a Corp or LLC you have protection from such lawsuits. Sole Proprietor is a cheap way to do business if you don't have the cash to file the proper paperwork to form a corporation. You also need to figure out which structure will work best for you. If you don't mind risking everything, Sole Proprietor will work just fine. The same applies to Partnerships. I personally always file for an LLC. Here in Nevada it's only $75 to incorporate and $125 for the initial list of officers. $200 total for corporate status and protection.
> 
> 
> 
> 
> Yeah, it seems like common sense to get an LLC. * I don't want to risk losing my home if my frame falls of the wall of someones home and kills somebody*....  So of the people here that run their own photog businesses, you guys are all LLC's or Corps?  No Sole proprietorships represented here?
> 
> Click to expand...
> 
> 
> What about insurance?  As cheap as it is in this industry seems the only way to go anyway.
Click to expand...


Insurance is listed in the OP.


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## etnad0

KmH said:


> bazooka said:
> 
> 
> 
> Yeah, it seems like common sense to get an LLC.  I don't want to risk losing my home if my frame falls of the wall of someones home and kills somebody....  So of the people here that run their own photog businesses, you guys are all LLC's or Corps?  No Sole proprietorships represented here?
> 
> 
> 
> Who says you could lose your home if your business type is a Sole Proprietorship?
> 
> My last business was a Sole Proprietorship.
Click to expand...


Did you get sued? In a corporate structure people can go after the corporate assets. Just look at successful companies, can you name one single successful company that remains a sole proprietorship? I can't. Not to say that it can't be done, but if someone gets hurt, they are coming after you, your home, etc, if you don't have enough insurance. The reason for this is because there is no "corporate veil" protecting you when you do work as a sole proprietor. With that said, even with an LLC or Corp, there are ways to screw up the corporate protection and people can still come after your personal assets. 

People seem to think that simply filing the paperwork provides the protection, but certain things like meeting minutes must be kept to maintain a legitimate corporate status. You can't mix personal and business funds, etc.

If you've never been sued while having a sole proprietorship, look up some info on it. There are things you can do with an LLC or corp that you can't do with a Sole Proprietorship when it comes to taxes and finances as well.


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## swanchild

This is all great advice! Thanks for putting this together. I printed it out.


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## Filipebr

Very great post!! 5 stars  

When I coach my clients I have very hard to install in their head that they should treat this as a true BUSINESS. They get caught up in the fact that they just "love doing this kind of work" and they don't really care about "giving discounts" or working more hours for free, since it is not such a "hard labor" they feel like it's ok to just put whatever price they feel like, offer what they feel like and etc...

But the only thing about offering the client exactly what the client wants is where I have to deviate a little, because I suggest not offering too many things, choice can really hurt a business because people love to give you a hard time. So I suggest a pre-made package and offer certain things so that the person can see what you have to offer and not try to "get creative" and end up wasting your time getting too fancy.


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## pollutia

These steps are really helpful. Everything is there. Thanks for sharing.


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## MuddyRiver

Awesome post. Thanks for sharing.


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## MuddyRiver

What risks do I run taking pictures for a small monetary cost without doing all of the things here... Such as the legal paperwork?

For example, I sometimes charge my friends $30 - $50 for a shoot for them to cover gas and editing time. Are there risks involved there?


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## KmH

You risk serious financial burdens from a variety of sources if you do not have a legal business - customer law suits, local, state, federal, fines and penalties.
Charging for your photography services, gas, editing time, selling prints, discs of photos, etc - is running a business regardless if your customers are friends, family, or someone who contacted you through your web site.

More start up, self-employed businesses have been financially done in by failing to collect and forward state sales taxes than any other type of government sanction. You may also have to pay Use taxes.
You have to have effective accounting procedures in place and have to meet various reporting requirements. If you don't, the government people will estimate, and they rarely estimate low. 
Sales and Use Tax
http://www.texas.gov/en/discover/Pages/topic.aspx?topicid=/business/start
Starting & Managing a Business | SBA.gov
Obtain Business Licenses & Permits | SBA.gov
Understand Business Law & Regulations | SBA.gov

Regular insurance, like homeowners and car insurance usually does not cover a business, legal or otherwise.

The minimum amount recommended for business liability insurance is $1,000,000, but $2,000,000 is better. You likely need an Inland Marine insurance rider to cover all your camera, computer, software, etc you use for the business. You also need to check about insurance your car when using it for business.

It is my understanding that Texas, like other states, gives a % of unpaid taxes, fines, penalties they collect as a reward to someone reporting your not legal business to them.


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## MuddyRiver

Thank you!


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## Photobe

Great post, thanks for sharing!


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## laverne

Thanks for the information. Its been really helpful


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