Showing posts with label finance. Show all posts
Showing posts with label finance. Show all posts

Friday, June 6, 2014

5 Steps to Making Your Business Legit

While there are many more things involved in running a business, you can set foot on much more stable ground if you have these five things in place before you start to collect money for your services.  I've been surprised to find that even people who have been in business for up to 2 years don't actually have some of these business basics taken care of yet (I may or may not be talking about myself as well when I started over 10 years ago.)  If you want to call yourself a professional, than you need to operate as a professional by answering all of these questions first:

1. Do you have a Federal Employer Identification Number?

2. Do you have a business bank or credit union account with your DBA name?

3. Do you have Business Liability & Equipment Insurance?

4. Have you contacted your local small business agency or chamber of commerce to understand your local business laws regarding operating, employment, benefits, and promotions in your city and state?

5. Do you have a Certified Public Accountant (CPA) to advise you on your bookkeeping, expense tracking, sales tax, and income tax reporting?

... also, while there are many resources available online for contracts and legal documents, you will also want to make an appointment with a local small business lawyer to look over any documents which you use as agreements with your clients in order to make sure you've covered all of your bases to protect yourself and comply with any local laws regarding your offerings.

Anne Ruthmann is an editorial & event photographer in New York City. She spent 10 years practicing marketing & management in corporate and non-profit businesses before pursuing her passion for photography in 2004 as an independent small business. She loves helping others find smart solutions to business problems. Stay in touch on Twitter or Facebook.

Sunday, April 21, 2013

How Much Does Each Click Cost?

When I was shooting film, costs felt so much more obvious when I was wasting negatives that I couldn't use, but what about shutter actuations that put wear and tear on the camera?  So, I decided to go and figure out how much each click costs me....

5D MkIII = $3,500 
$3,500.00/150,000= $0.023333 per actuation
That means it's 2¢ for each click of the shutter, whether or not I actually use the image.

When I'm shooting events, my keep rate is somewhere around 20% of what I shoot, which means that it's actually 10¢ to click the shutter 5 times just to get a shot I really like and think is worth keeping.  If I end up with 800 images on a wedding day, that's about $80 of wear and tear on my camera just to show up and click- not even taking into account batteries and flash wear and tear.

Now, since I'm likely to go through 150,000 shutter actuations in one year, let's approach camera costs from a warranty perspective.  Canon provides a limited 1 year warranty on their cameras, but if you purchase a camera plus an add-on Mack Diamond 3 year warranty, you get cleanings, repairs, and replacement if your camera is a lemon.  It seems if you're going to spend a lot on a camera, you want it to last longer than one year, right?

5D MkIII = $3,500
Mack 3 Year Diamond Warranty = $225
$3725/ 3 Years = $1241 per year

So when my equipment is on a diamond 3 year warranty, theoretically I should be able to get 450,000 actuations out of my camera, even if it has to go in for repairs.

I bring this point up because it's often overlooked as an overhead cost that gets factored into pricing.  Whether you do the math from a usage perspective or a warranty perspective, it's good to know how much you need to budget for your equipment each year so that you're able to replace it regularly without being in a pinch.

It's also good to know if it would be more affordable for you just to rent your equipment on an as-needed basis.  I've determined that if you shoot less than 150,000 actuations each year or less than 25 shoots a year, it may actually be more affordable to rent than to buy a new camera each year (assuming you already own a back-up camera).  When you consider it's $133 for a weekend rental of a 5D MkIII, there's only a savings in owning a camera versus renting one if you use it enough to make it worth the cost of replacing it regularly and if your camera outlives its manufacturer's warranty and expected shutter actuations.

Anne Ruthmann is a lifestyle & wedding photographer from Boston, MA. She spent 10 years practicing marketing & management in corporate and non-profit businesses before pursuing her passion for photography in 2004 as an independent small business. She loves helping others find creative and smart solutions to business problems. Follow her on Twitter to see her daily adventures and thoughts.

Tuesday, February 26, 2013

Launching A Photo Business - Zach Arias

Every once in a while, I run into something online that totally aligns with my beliefs about getting started in the photography industry (not often enough, ironically).  Even if I feel like I've written it all before or said it all before, it's always interesting to hear someone else say it in their own way.  So, I'm reposting this little interview/presentation in the hopes that you don't miss out on some of the gems of wisdom from Zach Arias' point of view:

Zack Arias: If I had to start my photo business today from on Vimeo.

Tuesday, February 19, 2013

Are you a sucker for technology upgrades?

There are generally two types of people- those who must have the latest piece of technology no matter what and those who upgrade when what they have no longer works.  Which person are you?

Assuming that both people bring in the same amount of revenue, one of these people spends an average of 3x more in expenses, resulting in 3x less profit/income.  They may have the latest equipment, but they're also more likely to be living on the financial edge.  Those who wait until their equipment dies often save themselves from the potential pitfalls of buying gear that hasn't been in the marketplace long enough to be tested by regular users and receive accurate reviews.

According to Moore's Law, if you use your technology until it breaks, you will get exponentially better equipment at an exponentially lower price.  However, if you purchase new technology as soon as it's released, you may be keeping up with the latest trends but you end up spending more money and time learning new gear each year, instead of every few years, which means less time spent on functions essential to building revenue in your business.  Tech companies know that early adopters- who must have the latest technology, will buy whatever the latest release is, regardless of whether it's a significant improvement or not.  These small yearly upgrades just to have something new on the market is how tech companies make greater profits and how early adopters get suckered.

Now, if your business model is to always have the latest equipment and your clients pay a premium for you to keep up with equipment trends, than it is an essential part of your business strategy and you'll need to make sure that you're regularly capitalizing on your previous investments before they see a significant drop in value so that they aren't going to waste.  Another option (depending on how often you use certain pieces of equipment) is to rent the newest equipment instead of purchasing it, so that you aren't paying full price for something that will be useless to you in a year or lose its value at an exponential rate.  When you know how often you use your equipment, and you measure that against the cost of purchasing new equipment annually, you can make the smartest business decision for you.

My personal upgrade strategy is to budget in advance for upgrades- knowing that good cameras last about two years and good computers last about three years.  Even then, I still wait for things to break before replacing them, but at least I've budgeted this expense into my business needs.  What equipment replacement strategy works best for your business?  Share your thoughts in the comments.

Anne Ruthmann is a lifestyle & wedding photographer from Boston, MA. She spent 10 years practicing marketing & management in corporate and non-profit businesses before pursuing her passion for photography in 2004 as an independent small business.  She loves helping others find creative and smart solutions to business problems.  Follow her on Twitter to see her daily adventures and thoughts.

Tuesday, February 12, 2013

Will You Put My Proof Gallery Back Online?

Most clients are able to make decisions in a timely manner, but there will always be a client who does't make a decision before their proof gallery expires and ends up asking for extra time.  If you find yourself in this situation, here are a few different ways you can approach it:

1.  Set Ordering Deadline Expectations
If your photography agreement or contract did not state up front how long a gallery would be available, or a cost for extending gallery viewing and ordering beyond the contracted availability, you'll probably need to be gracious for the first extension or reopening of a gallery after it has expired.  This is when, in writing or over email, you will need to communicate exactly how long the gallery will be available to make their decision, and the cost to extend that timeframe if they cannot place their order or make their decision in a timely manner.

2.  Invite The Client To An Ordering Meeting
If the client is having a hard time making a decision, communicate that in order to view the images again, you will be happy to set up an in-person appointment, at which time you will be able to provide your expert opinion to make their ordering decision easier.  If the client is unavailable to meet in person, you could also schedule this arrangement over Skype and use Screen Sharing.  While the quality will not be as great for the client via screen sharing, you will be able to discern the better options and help make it less confusing for an indecisive client.

3.  Request An Ordering Deposit
If you clearly outlined that a gallery would only be available until a specified date and a client has chosen not to make a decision during that time, an alternative form of an extension fee is a deposit toward their order, which can be collected before making the images available again and applied once an order is placed, to cover any costs you might be incurring for hosting their images in an online ordering cart.

Obviously, the goal is to have clients who are happy with your service and product, while still setting appropriate expectations so that you aren't draining your resources and ability to serve clients in a timely fashion.  Do you have other ideas?  What works for you?  Share your thoughts in the comments!
Anne Ruthmann is a lifestyle & wedding photographer from Boston, MA. She spent 10 years practicing marketing & management in corporate and non-profit businesses before pursuing her passion for photography in 2004 as an independent small business. She loves helping others find creative and smart solutions to business problems. Follow her on Twitter to see her daily adventures and thoughts.

Tuesday, January 29, 2013

Photography Overhead Costs (or Why Photography is Expensive)

[image source]

Over the weekend, I received an innocent question from a couple just starting to look for wedding photographers and perhaps you've received this question before as well:  "Why is photography SO expensive?"  I sympathized and agreed that photography is, in fact, quite expensive for the photographer providing the service as well.  Professional cameras and lenses are expensive and need to be replaced frequently, maintaining computers and post-production equipment is expensive, regular software upgrades are expensive, not to mention all of the costs of simply being in business.  In fact, because these costs are elusive to people who haven't run a business before, but who may own a camera, many beginning photographers don't even know they're pricing themselves out of a business simply because they are failing to account for their overhead costs.

To aid aspiring photographers and pricing skeptics, I've constructed a table of some basic overhead costs of running a photography business.  These are rough estimates, and many businesses have even more overhead expenses than this, but I wanted to provide a very basic outline of the monthly and annual costs of being in business as a photographer.  If you're an aspiring photographer, I'd encourage you to start a spreadsheet of your own to help you gain a more accurate look at your overhead costs, so that you can budget your future needs into your current pricing.

Overhead Expenses for Photography Business

Please note, this does NOT include the expenses of a Salary or Health Insurance.  If you want to have a business that actually pays for your home, transportation, food and provides you with health insurance (rather than just a side business to supplement your income), we'll need to figure in those costs as well.  Health Insurance can range anywhere from $100/mo-$600/mo per person with a national average is estimated to be around $185/mo.  Also, if we assume a salary of $36,500/yr (the national mean for photographers according to which is determined before self-employment taxes are taken, we would need to add $3,226 to the average monthly overhead expenses and $38,720 to the yearly overhead expenses. 

 Photographer Salary and Health Insurance Costs

As with all things, every business is different and will have different expenses.  This is only meant to be one example and not a representation of what your expenses should be.  Definitely check out the comments to see what more photographers have to say!

Anne Ruthmann is a lifestyle & wedding photographer from Boston, MA. She spent 10 years practicing marketing & management in corporate and non-profit businesses before pursuing her passion for photography in 2004 as an independent small business. She loves helping others find creative and smart solutions to business problems. Follow her on Twitter to see her daily adventures and thoughts.

Wednesday, July 11, 2012

Charging Travel Fees for Destination Clients

LOLCat Cabin Looked Bigger in Travel Brochure 

When estimating travel costs for out of town or destination work, it's important to take into consideration all of the costs associated with doing business away from home:
  • Transportation- flight, taxis, car rental, gas, tolls, parking fees, insurance, emergency changes to transportation options, additional fees for handling of extra baggage or equipment
  • Lodging- hotel, wifi fees, hotel parking or valet fees, shuttle service to/from airport
  • Food- eating out, room service, groceries
  • Travel Insurance- in case of cancellation, to refund booked flights and deposits placed with travel agencies or resorts (often less expensive than a refundable ticket) and possibly travel health insurance in case you end up in the hospital due to a local infection or encounter with poisonous material (hopefully you'll have researched this stuff in advance)
  • Personal Travel Agent- who can help you deal with any last minute changes in travel plans without losing your head
  • Discretionary Funds- in case you need some piece of equipment at the last minute, like a power adapter for a different country to charge your batteries, or a power strip because there aren't enough outlets in the room, or even a pre-paid phone to communicate with clients overseas because yours isn't working, or to pay for international roaming charges on your current cell phone to stay in touch with clients
  • Working Time Lost During Travel- the most underestimated cost is the amount of working and communication time lost while in-transit.  Getting to and from a destination reduces your work week by at least 2 full days- putting you two days behind in your workload and preventing you from serving other clients during that time.
For these reasons, I don't recommend an itemized bill of travel costs, but rather a flat travel rate included in the contract up front.  By providing an all-inclusive flat travel rate up front rather than itemizing everything, a client is less likely to negotiate paying less or using their frequent flier miles to purchase any of your trip- which you need to retain full control over at all times in order to make any emergency changes to the itinerary.  Occasionally, I will allow a client to pay for my lodging, in the event that they get a better rate through their travel agent for a group booking, but will only take 30% off of my flat rate in order to make sure there is enough for the rest of the fees.

While you need to decide what distances and travel rate is reasonable for you based on your location and fees, I am happy to share what I do as an example of what works best for me as of this posting date in my East Coast location (note my fees and distances were different when I lived in the Midwest, and when prices were different for gas and airfare):
  • Travel within 50 miles - Included (because I can drive there and back in the same day)
  • Travel between 50-100 miles - $500 (2 hotel nights, driving expenses, eating out, and any emergency expenses for being too far away to get anything at the last minute if needed)
  • Travel over 100 miles, within the continental US - $1000 (2-3 hotel nights depending on the scarcity of flights into remote areas, flight & car rental/shuttle/taxi expenses, eating out, emergency, travel insurance, travel agent, etc.)
  • Overseas travel- Quote based on location (on top of all travel expenses mentioned above I always include 3 hotel nights minimum- one for the arrival day, one additional day for any emergency flight cancellations/reschedules and-or jet lag adjustment, one for the wedding night- and if I get lucky, a fourth night for myself to just enjoy the location.  It's also important to include costs for an additional shooter while working abroad in case you fall ill to some strange location based disease from accidentally brushing your teeth with bacteria laced water, or in case you need a local photographer who can help translate the local language.)
While many American photographers are often excited to travel abroad for international destinations, be advised that traveling for work is NOT the same as traveling for a vacation.  There are international working visa considerations for each country that need to be dealt with, as well as constantly being "on the clock," especially when staying in a resort with all of the guests from the wedding.  If you underestimate the costs of doing business internationally, you may travel a lot, but at the end of the year you could find yourself without enough in the bank to upgrade equipment or clean your camera out from all the sand, humidity, and wear and tear it's acquired from its travels.

Anne Ruthmann is a lifestyle & wedding photographer from Boston, MA. She spent 10 years practicing marketing & management in corporate and non-profit businesses before pursuing her passion for photography in 2004 as an independent small business. She loves helping others find creative and smart solutions to business problems. Follow her on Twitter to see her daily adventures and thoughts.

Sunday, May 20, 2012

Making It Big Without A Big Investment

Did you know it's cheaper to start a business than it is to get an MBA?  To top that off, if you invest in a business for 2 years and only break even, you will be better off than someone who has gone to school full time for two years and has to pay back a $30,000 loan for the next 30 years.  Plus, when you work for yourself, no one can fire you and you can create your own pay scale.  This is why I enjoy being an entrepreneur and making my living by doing what I love the most.

Inevitably, the diatribe I get from new photographers is... "but, I can't afford the fancy equipment, the fancy blog, the fancy website, yada yada yada yada."

Who said you needed these things?  Not me.  I certainly didn't have any of those things when I started out.  What did I have?  I had a hand-me-down Olympus OM10, 35mm with manual focus and manual advance.  I just gave people photos as gifts after family gatherings or weddings.  My photos ended up on their walls and on their coffee table, and THAT was how my business started- even before I knew my business was starting.
 I actually didn't set out to become a professional photographer- people just loved my work and asked me if I could work for them.  
I had no website.  All of my images were being posted to Shutterfly galleries (after I finally got a small point & shoot digital camera and learned that labs would scan my film to disc), just so other out-of-state friends and family could see them.  I did headshots for people who wanted to be actors, models, and performers - simply because they were my friends and I had the technical know-how of working a camera with depth of field.  They paid for my film, and my processing, and I even got a little extra to help me upgrade my lenses and buy more batteries.  Eventually I was asked to photograph a wedding and I knew I couldn't photograph a wedding without an auto-focus SLR to get the results I wanted, so I just asked to be paid enough to cover the cost of a 35mm Canon Rebel and an extra flash.  They got all of their images to scrapbook, and I put a few on a basic "dot mac" website, as well as on a free gallery and on a flickr gallery.

That was how I started as a professional photographer- no website, no fancy lab, no fancy gallery, no fancy lenses, no fancy cameras, just whatever I could put together with what I already had.  Of course, that's not how my business or my equipment looks now, but that's what got me to where I am now- where I can own all the professional equipment I want to own, where I can hire people to help me, where I can go to the workshops I want to attend, where I can pick and choose the clients I want to work with, and where I can take vacations and time off when I want to rejuvenate.
The reality is, if people want to pay you for the work you're already doing, with what you already have, than it's a good sign that you have enough talent and skill to earn a living from your craft.
Whether you have the talent and skill to run a business and turn a profit is an entirely different subject, but you most certainly can rely on the economic engine of people wanting to hire you for your talent to be a good judge of whether you can become a professional.  Actually, this is how many entrepreneurs start out- by simply sharing their passion with other people and creating from their heart.  Anytime someone says "I will pay you to do XYZ for me"- it means that you have a talent or skill that is valuable enough and desirable enough for other people to pay for it.  The key to being profitable and making a living from it, is to always spend less money than you make.  If you only make a little but spend even less, than you're creating good business habits that will help you sail easily toward long term success and a great retirement plan.
Anne Ruthmann is a lifestyle & wedding photographer from Boston, MA. She spent 10 years practicing marketing & management in corporate and non-profit businesses before pursuing her passion for photography as an independent small business. She loves helping others find smarter solutions to business problems. Follow her on Twitter to see her daily adventures and thoughts.

Wednesday, April 4, 2012

Filing Taxes & Finding An Accountant

[original source]

With taxes on the mind for many small businesses and other productive procrastinating perfectionists, I'm happy to share this guest post from Kathy Rappaport...

It’s almost April 17th! Whenever the tax due dates fall on a weekend or holiday we get extra time to procrastinate on filing our taxes; so this year we get two extra days. When you need more than the two extra days, you do have the option of filing an extension. That would make your due date October 15th and once you file it’s called an Automatic Extension TO FILE. Sadly, that doesn’t mean you get more time to pay.

You would file Form 4868 but you must include how much tax you have paid and how much you estimate you will owe. And you might need help from an accountant or tax preparer to figure that out. As a business owner, it’s recommended that you actually have an accountant review your profit and loss quarterly to coincide with your quarterly estimated payments so you have no penalty and won’t owe when it comes time to file your actual return. Doing this actually eliminates that “heart attack” when you hear the actual amount of tax. If you do have a review before the year end, you can actually plan ways to reduce your tax obligation by opening a retirement account, spending money on tax deductible expenses and grouping deductions into one year to maximize deductions. Often, you can save whatever amount you might pay for the service to have it figured for you.

And this assumes that you are filing as an Individual. You may have a small business return that you file with your personal tax return called a Sole Proprietorship and you file a Schedule C for your business return.

To choose an accountant that is right for your business you should have an idea of the different designations of people who can prepare your tax return and why they are qualified:

1. Certified Public Accountant (CPA): This is the most educated person regarding business and tax; they’ve gone to school for a Bachelor’s Degree, taken a multipart test and done a two year internship in various types of accounting. Most have a specialty like working with Closely Held Businesses or Entrepreneurs or Corporate Tax Work or Audits or Financial Planning. Highest Caliber of Tax Knowledge and business knowledge. Licenses by state and can represent you in front of the IRS for tax matters.

2. Enrolled Agent: This person has studied tax and accounting and passed a test administered by the IRS which allows them to represent you at an audit. No degree or formal course of study required.

3. Enrolled Return Preparer: This person may have just worked down the street for that national chain that is well known for filling in the blanks. In some states they must complete annual testing and limited studies in Tax Preparation to know what to fill in. They may not represent you in front of the IRS or actually give you advice on what to do with your taxes.

How do you choose the right tax preparation for you?
First ask people in the same line of work you are in if they are happy with the person they use; You need a professional who can guide you in important choices for your business like whether to incorporate or become an LLC or S-Corp you would want a CPA who can recommend what is right for YOU; one size doesn’t fit all. Interview them. There are many options to select from and what is right for your friend is not right for you. Education is important but you should also be comfortable with the person you choose. They should never “pat you on the head” and tell you not to worry about it any more; you should be educated and informed so you know what is going on. After all – it’s you who is ultimately responsible if they make an error in your filings. Do you have bookkeeping issues you might want help with? Then you may want someone knowledgeable in QuickBooks or other accounting software who can help you. If their office is messy, will they lose your paperwork? Do they pay attention to you as a client? Are they listening to your concerns? All of these questions are just as important as the one question everyone wants answered – How much do you charge and how much will I owe?

Kathy Rappaport is a full time photographer with a studio in Woodland Hills California. Her first career was banking for 17 years when she opened a Bookkeeping and Tax Business which she now consults exclusively with Photographers. She is married to Frank – a CPA with a tax practice specializing in small businesses and entrepreneurs. Both Kathy and Frank are Certified QuickBooks Advisors.

Friday, March 9, 2012

How To Hire A Remote Photo Assistant & Outsource

While my business may appear to be a one-woman show, let me assure you that I cannot do everything necessary to run a successful business on my own. Even though I HAVE the physical and mental capabilities to do everything my business needs, I simply do not have the TIME to do it all.

I believe in spending more time doing what you love and in hiring people you enjoy working with to handle the rest.

For me, that means I enjoy spending my time doing: photography, personal service, marketing, strategy and mentoring/consulting. Even though I can get away with running a business on what I love alone, I was never really successful until I found people to take care of: production, retouching, accounting/finance, travel arrangements, and random details and projects.

It took me a long time and a lot of frustration to learn that I needed to outsource the things I didn't like.

It also took me a long time to find services that I liked and trusted with my images and my business- about 2-3 years to be exact. Almost as soon as I would find local services and people I enjoyed working with, I'd have to move. So, I've had a lot of experience searching for and finding those people and services that I enjoy working with!! Hopefully, by sharing my process with you, you'll be able to find the people you need to run a successful photography business as well.

I started off with local labs because I wanted to keep my business local and support my local economy. Unfortunately local professional labs are quickly dying in favor of nation-wide online labs, but I think it's still very important to have a local lab you can go to at the last minute for a same-day or quick-turn around job that a national lab wouldn't be able to easily accommodate.

How to find one?

  1. Take 10 sample prints with different processing techniques on them and submit them to the lab as you would if you were ordering prints for clients. Order the papers you want, the cropping, the toning, the turn around time, the mounting, etc.
  2. Evaluate their turn around time, the service they provide when dealing with your order, and of course, if they are able to produce results that you like and if they offer all of the products that you're interested in selling to your clients.  The more they can handle in one place, the more streamlined your business will be to deal with any last minute issues or orders.
  3. If you like their service, but they weren't able to produce results, find out if they can work with you to create a custom printer profile that you can use when submitting prints to them.  If the service is great, they should be able to walk you through this process to help you get the results you want.
After trying many of my local labs and running into horrible service left and right, I ended up testing all of the national labs with the same method and finally found a lab that I love using for more than just printing and album production.  What I pay to use their service and their professional team of printers, retouchers, packagers, album designers, and production assistants is far less on a monthly basis than I would be able to pay a professional photo assistant to work in my office or even to drive to for print pickup.  Hands down, the best investment I made in my success was turning my production over to a professional photography lab.  The lab also guarantees all of their work, so if there are any problems, it's not my fault, it's the labs and they handle it on their dollar, not mine.  As a side note, using a professional lab has also made it easier for me to sell more products and increase my profit margin on individual jobs by offering products that consumers can't get anywhere else but through a professional photographer.

Doing your own finances is fine when you don't have a lot of money or work coming in the door, but if you don't love crunching numbers and spending your time in excel spreadsheets or accounting software, than I would suggest that an accountant or bookkeeper is as essential to your business as your camera equipment.  I'm not a CPA.  I don't spend my time studying tax code or best accounting practices and I have no desire to whatsoever.  I'm a photographer.  I take pretty pictures.  A good accountant or bookkeeper will help keep all of your business finances in order once a year, once a month, or once a week, depending on how much work you're doing to make it necessary.  
Personally, most years I'm good with hiring a CPA once a year at around $300-$500 just to clean up my lazy expense tracking and maximize my tax returns.  However, in years when I was REALLY busy because I was charging less and taking a greater volume of clients, I worked with an accountant quarterly- basically each time a quarterly tax payment was due.  Businesses with even more volume may simply hire a bookkeeper once a week or month, and then only a CPA for taxes.  Having a CPA do your taxes also helps reduce your liability because they have to practice ethical accounting standards in order to maintain their certification.

How to find one?  
Your local Chamber of Commerce or Small Business Development office is the best place to start looking.  Ask other photographers in your area, or other local small businesses that provide a service like yours.  Set up an interview with three people before committing to one.  You might find one that's recommended but not click right away.  I can't stress enough how important it is to like the people you work with in your business.  If you feel like you can't call someone and ask them for advice easily, or you're too intimidated to talk to them, you're less likely to get the help you need when you need it for any business problems that arise.  Find an accountant you really like, it may take a few conversations over coffee, but ask them to talk about the other businesses they work for and what they do for them to help you get a sense of how they'll be working with you.

The first two areas are easily outsourced to an established company.  However, finding an office assistant and random task master generally happens on a much more personal level.  While there are services like and that will help you with individual projects and on a remote basis, I've learned that having someone you can depend on locally is actually more beneficial for your business.

Even though I'm traveling the world this year and working in several different countries, I have a remote office assistant that already knows the ins and outs of my business because we worked together side by side for several months in person.  This was essential for me being able to trust my assistant in a situation when I might need someone to deliver something to a client in person while I'm away.  While I've streamlined all of my payments to happen electronically, if a client needed to send a check, I'd want someone I could trust with my money to do that random task for me.

How to find one?
The best place to look for an assistant is through your existing audience of fans, followers, and friends.  Some people hire family members, some people hire friends, and some hire former clients or interns.  More often than not, the assistants that become a best fit for you and your business already have some kind of relationship with you or are already interested in you and your business.
  1. Create a list of tasks that you'd like someone to do for you.  Outline the types of software they'll be using, what things they'll need to know in advance, and what you're willing to help teach them in order for them to do things they may not know how to do yet.  Identify how much you're willing to pay per project or per hour.  This list will help set appropriate expectations for the work that you're asking other people to enjoy doing for you.  It's critical that they will actually enjoy doing these jobs, otherwise they will be just as frustrated as you are when trying to accomplish them.
  2. Start by reaching out to people you know you'd love working with and see if they'd be interested in working part time for you.  Start with family, then friends, then fans & followers.  Some family and friends do well in a business relationship and some don't- think of it like a partnership.  If you don't feel you can work through problems peacefully and professionally together, than they aren't going to be an ideal assistant.
  3. If you don't find what you're looking for in your existing audience, reach out on your Blog, Facebook Page, or LinkedIn before posting on Craigslist.  There's a very good chance a friend of a friend or an existing follower knows someone who would be perfect for you.
  4. Interview several people.  Unless you've hand picked your assistant and they said yes, you'll probably need to interview a few different people to find the best fit.  Sit down with them in person and ask them if they're comfortable handling the tasks you need help with.  Notice their body language to see if you feel like they're excited about the opportunity, or just thinking about doing it for the extra cash.  You really want someone who is excited about working with you, because it their energy and desire to work with you will help you trust them and hand over more work to them.
  5. After you've found your ideal person, create a contract for the working agreement and determine if they need to be an employee or if they can be an independent contractor.  In my business, I haven't needed an employee, just independent contractors who can either work at my office or away from my office on various tasks and projects as they see fit.  
  6. If they'll be working for you all year, regardless of their employment status, you'll also need to collect tax information from them so that you can report it at the end of the year.  Here's another post on the paperwork you'll need and How To Outsource with Independent Contractors.
A successful business does not exist in a vacuum by itself.  It requires many people making things happen simultaneously in order to create a business that allows you to really focus on what you love doing and the reason why you started working for yourself in the first place.  If what you want is freedom and time to enjoy your life when you aren't earning a living doing what you love, than you need to find a way to bring other people on board that you enjoy working with- or you need to find someone else you can work for who will handle all of the stuff you don't like.  Running a business isn't easy and it's a lot of responsibility. 

In the life of your dreams - what are you paid to do and what do you pay other people to handle for you?

If you can put a price or a budget on how much it's worth for someone else to take a task or a project off your hands, than you can create a plan for your business that provides room to hire other people for help.

CONFESSION: I pay people to do my laundry, make my travel arrangements, and cook my food (by going out to eat more often than I cook.)  Sometimes I do these myself, but mostly I just prefer to hire other people to do it for me.  I might end up with slightly less money at the end of the year, but getting back my time to enjoy life and spend more time doing what I love is well worth the cost!

Anne Ruthmann is a lifestyle & wedding photographer from Boston, MA. She spent 10 years practicing marketing & management in corporate and non-profit businesses before pursuing her passion for photography as an independent small business. She loves helping others find creative and smart solutions to business problems. Follow her on Twitter to see her daily adventures and thoughts.

Friday, March 2, 2012

Why You Need To Pay Yourself Starting Right Now

A lot of small business owners start their businesses by taking all of the money they earn and reinvesting it into equipment, marketing, branding, a new website, or some other business expense until they feel like they "have it all." The only problem is, for quite a few small business owners, they'll never feel like they "have it all"- there will always be new equipment, software updates, workshops, or the latest gizmo that money in the bank could be buying in exchange for another business tax write-off.

While it may be tempting to get the latest of everything for your business, "keeping up with the Jonese" can easily become a fast track to letting your business expense you out of having a paycheck and a living wage.

This is why it's so important to pay yourself a dedicated portion of every bit of revenue that walks in that door.

Now, in your starting years, that portion may realistically only be 20-30% while you need to build your business and make important investments, but it is important to start taking income from your business the minute you start taking money. You deposit a check into your business account and then cut yourself a portion of the revenue as income to your personal account. The reason is that you need to develop good financial business habits from the very beginning so that you don't find yourself overworked and underpaid picking up work at Starbucks just to make ends meet. Frankly, this is the biggest reason people go out of business in two years or less. They simply don't pay themselves enough to make a living and they let their own business run them into debt and out of a job that they can't collect unemployment for.

Ideally, you should aim to take home 50% of your revenue before taxes.

(Sole Proprietors) This forces you to run a lean business that makes decisions based on needs, rather than wants and whatever the latest trend happens to be. It forces you to be creative when solving problems rather than just throwing money at them. It also makes it very clear when you're using your personal income to purchase something for your business and vice versa, so that you can measure your financial success against whether or not you're making enough for everything you need or want.

If you're two or three years into your business and still haven't given yourself a paycheck. It's never too late to start. You can start with the next check that walks in the door. Yes, you'll need to make changes in how you handle money and solve problems, but they will be healthy changes that will allow you to continue doing what you love far longer than you'd be able to if you continued not to pay yourself.

If you wouldn't be an unpaid slave for someone else, why would you choose to enslave yourself?

Anne Ruthmann is a lifestyle & wedding photographer from Boston, MA. She spent 10 years practicing marketing & management in corporate and non-profit businesses before pursuing her passion for photography as an independent small business. She loves helping others find creative and smart solutions to business problems. Follow her on Twitter to see her daily adventures and thoughts.

Sunday, February 5, 2012

It's Not the Economy, It's You - How To Get Unstuck

It's easy to blame the economy when things are going tough.  However, the fact is that there are still people who survive and thrive no matter what the economic circumstances are.  How do they do it?  They revisit, rework, and retool their strategy to fit the changes happening around them.

If you're feeling like you're in a slump, it's because you're resisting changes you need to make, or you're unable to identify where you have opportunities for change.  

If you're resisting change, than you have already identified what change is needed- but now you need to have an honest conversation with yourself (or your business mentor) about why you aren't motivated to make the changes you know will help your business.  However, if you're simply at a loss for ideas to make changes, here are several ways to change and rework your business:
  • Service Offerings
  • Product Offerings
  • Overhead Costs
  • Workflow Systems
  • Marketing Plan
  • Budgeting
Do any of the items above stand out as something you've been neglecting or know needs improvement?  If so, than you know where you need to focus your energy already.  Below I've provided some basic ideas about how to create change in these areas.  This is in no way an exhaustive or complete list of possibilities, but merely a sample of things I've seen work in various businesses that I've worked with.  As you read these, see which one(s) stand out to you as something you need to do and write them down in a list.  I'll share what to do with your list after you've read through them:

  • Change business hours to provide added convenience to clients
  • Offer smaller introductory services to allow more people to develop a relationship with your company 
  • Pair down services to focus business strategies, or expand services to reach new markets

  • Simplify your product line to make client decisions easier and to streamline production time
  • Expand your product line to offer more customizable, unique, or affordable products for clients
  • Eliminate outdated products and introduce innovative products

  • Eliminate unused or underutilized assets and services with recurring costs
  • Let go of unproductive employees to make room for highly skilled and motivated ones
  • Invest in assets or property that will produce ongoing income

  • Find automated solutions for common repetitive tasks
  • Outsource production or administrative work that is easily reproduced by others
  • Streamline workflow process and production schedules to be more efficient

  • Create an annual marketing schedule for promotions, social media communication, and newsletter updates
  • Analyze return from previous marketing efforts and eliminate those which do not produce income or measurable results
  • Identify strategic relationships with other brands for partnership marketing opportunities

  • Analyze spending habits to get a clear picture of where money is going and when- use this information to create a month to month budget for spending
  • Create an annual budget for marketing, equipment, supplies, overhead, labor, etc. to find opportunities to cut back spending or to eliminate unnecessary upgrades
  • Work with an accountant or bookkeeper to help you gain control of the numbers and to keep you financially organized

It would be impossible to do all of these at once, so once you've established a list of the things you feel your business needs, prioritize it from most needed to least needed changes.  The key is to pick just ONE thing you want to focus on changing at a time.  Make that change before moving on to the next.  By making one change at a time, you can give each change your full attention.  Once you've completed a change that benefits your clients, spread the news to reinvigorate your brand and demonstrate growth.  Growth and change attracts positive attention and forward momentum, both of which are great for attracting new business!

Once you know what you're going to start working on first, get additional ideas from by clicking on a category keyword listed on the right of this blog, or try the search box at the top left of the blog for more posts and ideas.

Anne Ruthmann is a lifestyle & wedding photographer from Boston, MA. She spent 10 years practicing marketing & management in corporate and non-profit businesses before pursuing her passion for photography as an independent small business.  She loves helping others find creative and low-cost solutions to business problems.  Follow her on Twitter or Facebook to see her daily adventures and thoughts.

Wednesday, April 6, 2011

The Dirty Little Secret of the Photography Industry, Pt. 1

80% of people who call themselves a professional photographer are not making their full time living as a professional photographer.

Unfortunately we don't have a way to get the hard facts on this number because it might actually be something more like 90%. How would we measure it? Photography websites compared to tax returns? If you restrict the answer to a survey stemming from a professional organization, than it's going to look very different because you're surveying a set of people who have already fully invested in joining a professional organization. So, this number is based on my personal experience of living and working as a full-time professional photographer, talking with other photographers, and engaging in community groups with other photographers.

Photography is a great part-time hobby turned extra source of income for a lot of people, but very few photographers are able to make a full time living doing this. Many photographers won't reveal to their clients- or even to other photographers- that they have another job because they are afraid it will make them seem less serious as a photographer. While I don't fault people for this when it comes to working with clients (as long as they're still giving their clients the best service possible- though I think it would help clients have a better understanding of a lot of things), this lack of full-disclosure is most dangerous with young photographers or aspiring artists who don't know the full story. They have no idea what percentage of the websites and blogs that they see are actually doing photography for a living. They end up thinking photography is an easy way to make a full-time living doing what they love and then base their own business off of people who may not even be running a business that's profitable enough to pay the bills.

In Boston, we have five major photography schools that pump out at least 150 photography graduates each year who expect to make a full time living in photography just because they now have a degree in it. They get starry eyed reading photography blogs and they assume that people who post a lot on their blogs are making a full time living in photography. They have no idea what's really happening behind the scenes, or how what seems like a "career" on someone's blog is really just a part-time job that helps cover expenses like iPads, nice lenses, and the latest camera gear for 80% of the photographers out there.

I work out of a studio where I'm surrounded by over 150 other artist studios. When I look at the people who are making a full time living doing what they love, I see people who are spending at least 50% of their time on running, managing, and marketing their business. They are both business savvy and artistically creative and they work hard at furthering themselves in both areas on a regular basis. Without the two, it's pretty difficult to make a full-time, self-employed living doing what you love. Now, you could actually be a horrible artist and still make a living from art if you're very business savvy, which tends to piss off a lot of artists, but..
If you're an amazing artist without much in the way of business smarts (or someone managing your business for you) than you're going to spend a lot of time living the "starving artist" lifestyle.

There, I said it, someone needed to.

(Update: This post has stirred quite a discussion... view the comments to see what other people have to say about the topic...)

Anne Ruthmann is a lifestyle & wedding photographer from Boston, MA. She spent 10 years practicing marketing & management in corporate and non-profit businesses before pursuing her passion for photography as an independent small business. She loves helping others find creative and low-cost solutions to business problems. Check out her next workshop at

Saturday, March 5, 2011

Regular People and Money

Binita Patel dropped by my studio last week to chat about life and business (I love visitors) and she made reference to this little Cosby clip, which is perfect for the photolovecat audience. We all just want to be regular people, right? ;-)

Monday, January 31, 2011

How Much Do You NEED To Make?

This is usually one of the first questions I ask people before I start consulting with them on their pricing. Some people don't even know what they need to make before I ask that question, so it's the essential first step to determining what your goals and prices should be. Most newer freelancers just pick a price based on what they think other successful people are doing- but that's the kiss of death. You have no idea how successful those people really are, how much they're working for that price, who is actually buying that price, what kind of expenses they do or don't have, and what other sources of income they might have in order to support their price. This is why the most important question to answer for yourself is: How much do YOU need to make?

What would your annual gross salary be if you worked for someone else? $30,000? $60,0000? $120,000? $250,000? What salary amount do you need to maintain the quality of life you have right now? Just for fun, what salary would you need if you're going to live your dream life?

Once you know what you need your salary to be, you can double it to find the amount of revenue your business needs to make in a year (this is the super simple method for sole-proprieters and for the sake of keeping this easy). If you were working for someone else, everything you make can be taken home and contributed to your household income. If you're running a freelance business, it's good to aim for taking home 50% of your business revenue so that the other 50% can be reinvested, cover overhead, COGS, expenses, upgrades, emergencies, and benefits (note: income taxes may be deducted from your salary and from the business depending on how you account for it.) If you have employees or if you outsource part of your service, you may take home less than half of your revenue, which simply means you need to earn more in revenue in order to take home what you need.

If you'd like to go one step further to help you budget: consider how many weeks you'd like to work each year- so that you can make sure you're leaving time in your schedule for vacations. Do you want to work 50 weeks with 2 weeks off? 48 weeks with 4 weeks off? 26 weeks because you're only part time? Once you know how many weeks you want to work, we can find out what your business needs to make each week.

Now let's do the math... oooohhh.... calculators.... ahhh....
[Annual Salary Needed] x 2 = [Annual Revenue Goal]
[Annual Revenue Goal] / [Working Weeks per year] = [Weekly Revenue Goal]

$60,000 salary x 2 = $120,000 annual revenue goal
$120,000 / 48 weeks = $2500 weekly revenue goal

Want to go further and find out what your hourly rate should be?
[Weekly Revenue Goal] / [Weekly Working Hours] = [Hourly rate]
$2500 / 40 hours per week = $62.50 per hour

What can you do with that number?
Determine if the hours and costs you're investing into a product or service are being covered by the price you're charging. So, if it takes you one hour at $62.50 to fulfill a print order and you have a $2 print cost, $3 packaging cost, and $5 shipping cost and the client paid a total of $25 for the product & delivery, than the hour that you spent on ordering, receiving, and packaging that product just made you lose money on your sale. In order to make that print order worth YOUR time, you should have charged $72.50.

Now, you could have hired someone else to do it at a lower rate- let's say $15/hr, which means you can now just charge for the $15 hour + $2 print + $3 packaging + $5 shipping = $25, and now you've just broken even and not made a dime on that print order. As long as you weren't counting on that print sale as part of your total revenue, you're probably fine. If you count on print sales as part of your revenue to support your salary, than you need to figure out how to make them profitable and how they factor into your revenue goals. If you work with a lab who does print fulfillment, you only need to make sure you've accounted for the costs plus commission for them to produce that product- and you might even have some profit left over because you didn't need to hire someone and you didn't have to do it yourself - saving you both time and money.

Is this scary? Eye opening? Informative? Confusing? Let me know in the comments below!

Anne Ruthmann is a lifestyle & wedding photographer from Boston, MA. She spent 10 years practicing marketing & management in corporate and non-profit businesses before pursuing her passion for photography as an independent small business. She loves helping others find creative and low-cost solutions to business problems. Follow her on Twitter to see her daily adventures and thoughts.

Monday, January 24, 2011

Budgeting for the Year Ahead

If you're on top of your business, you're probably doing your year end finances right now and planning for the year ahead. If you're not on top of your business, you'll probably put this off until the last minute and maybe even pay late this year because you'll realize at the last minute that you hadn't set aside enough to pay your income taxes. Well, my lovely lovecat- let's make this year better than the last, OK?

Here's how I generally like to budget in order to help me appropriately manage my income to cover my current and future expenses:

- 30% personal salary & quality of life
- 30% planned for IRS (whatever is left over becomes bonus or retirement)
- 25% business expenses
- 10-5% education/conference/workshops/networking
- 10-5% giving back
- 10-5% savings for emergency repairs/replacements and/or retirement

This means, for every $1000 that walks in the door...
$300 goes to me personally
$300 goes to the IRS
$250 covers business expenses
$50-100 is invested in my education
$50-100 is paid forward or given back
$50-100 is saved for a rainy day or future

There are more breakdowns within each category- especially business expenses to cover overhead and operational costs, but this is a good guide toward making sure that you're setting aside enough from each little piece of income you earn in order to account for everything you need to pay for when you're self-employed. If I've missed a larger picture item that you like to budget for, feel free to share in the comments below!

Anne Ruthmann is a lifestyle & wedding photographer from Boston, MA. She spent 10 years practicing marketing & management in corporate and non-profit businesses before pursuing her passion for photography as an independent small business. She loves helping others find creative and low-cost solutions to business problems. Follow her on Twitter to see her daily adventures and thoughts.