Deciding to turn your passion into a professional career is a big step for photographers. And the biggest question is that they face how to start a photography business legally. The more you go into the depth of the research on legalizing your photography business, the more you will find yourself in the middle of nowhere.
Legalizing your business is definitely a complicated procedure and you need to be careful of every detail you put on it as it will represent your business. It is essential to do good research on how to start a photography business legally or what are the legal requirements needed for a photography business.
The initial business decisions make a huge impact on the business’s future and it is important to ensure you learn the basic photography business license requirements and have a good business plan ready.
Here’s to starting a photography business checklist and the initial and basic information and steps you need to know to get a photography business license to make your passion official and legal.
1. Business Plan
It’s a bit more complicated to start a legal and successful photography business than just a camera. First, opening and creating the basic structure of your licensed business needs a proper business plan.
Even though there is no legal need to have a business plan, it helps you combine all your thoughts and goals into an actionable plan. It enables you to strategize and find ways to achieve those goals and set a time frame to make it all happen. A business plan for your photography business will give you a more precise objective and vision for your business.
What should my photography business plan include?
A comprehensive and well-thought business plan will include the description of the photography business and idea, including the type of business you want to focus on. Below are the key points to focus on before starting a photography business.
- Market analysis based on the target customer.
- Determine the competition in the market.
- Market price and value
- Financing options and sources.
- Goals and objectives.
2. Business Structure of Your Business
One of the notable decisions you have made as the first step on starting a photography business is to determine or decide the entity of your photography business. What type of business entity do you prefer to operate. It is crucial to know, research and learn about each one before deciding which one will be the best for your business type.
What type of business structure should I consider for moving forward?
While researching how to start a photography business legally, the type of business entity you decide for your photography firm will directly connect. It should be the amount of tax you are paying, your finances and personal liability, as well as the amount of paperwork you would need to do.
If you are not very much sure which one is right for your consulting, a CPA will be an excellent choice to help you decide; however, here are few suggestions for you to get an idea:
Sole Proprietorship: The simplest business entity and a standard structure to get started with any business. Businesses are owned and run by individuals or only one person without distinguishing between the owner and the company itself. It is the easiest to operate. However, owners have to be solely liable for any liability.
Partnership: These types of photography businesses consist of two or more owners, and it is essential to carry out either written or oral agreements to carry out a partnership business. It is somewhat similar to sole-proprietorship, however easy to set up and get your finances efficiently. However, liabilities have to be taken by the partners themselves.
Corporation: It is a separate legal business structure and a costlier business entity. Therefore, shareholders can enjoy the protection of liabilities. However, there has much paperwork, and the taxes are higher for these business operations.
Limited Liability Company (LLC): Last but not least, when comes LLC. Mainly, LLC sets to operate as partnerships with multiple owners or partners. Benefits of LLCs are that it is taxed similarly as individual tax returns and gives you liability coverage similar to a corporation. However, the major drawback is it carries out more formality fees and expenses than a partnership or sole proprietorship business entity.
3. Employer Identification Number from IRS
It is necessary documentation for business entities like Partnerships, Corporations, LLCs. Sole Proprietorship businesses, however, can avoid this. This documentation needs to help the banks identify your photography business as an entity when you sign up for accounts.
4. Choosing a Business Name
Now that your business structure is set and is good to go, the next big step would be to find the perfect name to name your establishment. Giving a name for a company is a big deal and is a challenging job to accomplish as it is such a vital component to launching a successful firm. Now, there are two different kinds of names that you can choose.
One type is when the owner names the company after their name or something very personal to them, and the other type is when one creates a unique character that explicitly embodies the company’s brand and work. While the “personal” option seems easy enough, making a name out of scratch has more complexity to it than one would think.
The first thing to keep in mind is to make sure that the name you choose is simple enough and short to pronounce and spell easily, as that would allow people to remember the term without any problem. In addition, it would be best to be careful to use a unique and new name to have your domain for the website. Along with this, each country has its variation of legal procedures and fee structure, hence make research a top priority when selecting a name for your business.
5. Business License
Your business permission and license depend on the state you are living in. You may need sales and use permission, tax certificates, and a few more as per the state rules. Make sure to check out what documents you would require as per the state you reside.
6. Bank Account for the Business
Money is undoubtedly the founding factor of a business, but what’s even more important is to handle it correctly by keeping track of transactions. The safest and best way to do this is to open up a business bank account to ensure that your funds are separate and that you have a monitored transaction history. In addition, it reduces unnecessary spending and makes procedures for legal purposes infinitely more accessible, especially regarding taxes.
Having a fair trial and a bank vouching for your business’s credibility is highly beneficial to your establishment. And aside from the complicated procedures, a bank account also gives a good rep to your branding when customers ask to pay into the performance as they’ll feel safe sharing their money rather than a random anonymous person.
However, the woes of fulfilling legality do not end there. You must be well aware of the process in the bank you are going to be opening a bank account. Every bank has its policy, which differs from city to city and country to country, and it is vital to follow them.
Hence, we strongly recommend you to ask your bank authorities beforehand, and they’ll help you with all the documents you’ll need and the fees you are going to have to pay.
7. Prioritize your Taxes
Something that absolutely can’t ignore in any way is the taxes that you will pay. So naturally, your business type will decide what kind of taxes you need to pay for the said establishment. As mentioned before, the tax fees wildly vary between locations and if you choose to have employees or special conditions.
Be sure to consult a professional before registering the business name and type to know the tax requirements in your establishment’s area. Since the tax procedure added with the other transactions are so complicated, it is best to hire an accountant to keep track and manage the taxes, payments, and liabilities in the best possible way for the firm.
8. Capital for a Start-Up
It is a given state that all businesses need seed money for the start-up to establish. Ensure that you have the funds for all the paperwork fees for legal procedures, taxes, equipment, location, and estimated miscellaneous expenditure. The amount of the fund of course reiterated previously. That will be different depending on the place or country you are living in.
Either way, have preparations to spend a handful sum on the firm. It recommends having a bit extra separately as a precautionary amount in an emergency.
9. Photographing License
While there is no specific ‘Photographer’s License,’ one still needs to gain specific licenses to establish legally in the city or whichever location you choose. So again, you should get help from a lawyer or a reputable business development agency. They will explain everything and process the procedure for you.
It is essential to know the ins and out of the laws of taxes and finances with your photography business. Therefore, hiring qualified tax professionals will save you more money than you can imagine. In addition, you would also know that everything does according to the law. Therefore, hiring a CPA is very helpful for your business.
All of this might seem overly complicated and very difficult to pull off. But we assure you that the real key is to have an organized plan and to follow the said plan through the end. If you have the passion and will to make your business successful, it is only a matter of time that you will start to see your art-making its money worth.
However, it would help if you remembered to be well-versed in using the machinery and working in post-production, but that guideline is another time. We hope that this article helps you to understand. At the very least get an idea of what things to do or not to establish a photography business legally.