Did you take out a loan for your start up costs including a website, hosting, liability insurance, equipment insurance, professional memberships, business cards, branding, etc?

It can add up to a thousand or two just to get everything started, aside from the equipment you need. Thoughts? Thanks!

We just saved up until we had the money and started out really slow. I would be very concerned to take out a loan to start a business of any kind. Nothing against anyone that did it, I am not trying to be a downer but their are so many variables out there that can cause you to get behind real fast.

I would suggest you start out slow and reinvest every penny you clear back into the business. All the things you listed are very important but not a lot of money really. Do your own web site and use cheap hosting, join PPA for the indemnity trust and contact a local insurance company for your equipment and liability (maybe start with just equipment and then when you have some more money start your liability policy). Branding is important but I would recommend you wait until you have established yourself a little bit and have the money, skill and ability to do it right.

The above is how we started our business and it worked for us. We did not win any races in starting up but we are doing great now and I would not change a thing if I had the chance.

Hope this helps.

Do NOT take out loans. Bad, bad, bad idea.

Inflation is already at 10% and is expected to only get higher, and with the interest rates on most loans you're likely going to pay twice what you originally needed. It's BAD for you and GOOD for the banks. Period.

Most people don't buy what they need to start a business -- they buy what they want. When they could buy used gear, they get new instead; when they only need two workhorse lenses they get six; when they could get more business by building relationships and networking, instead they sink their money into branding and advertising.

Most businesses fail in their first year, in part because of things like this. Rule #1 is to check your ego at the door be totally honest with yourself about what you NEED versus what you'd just really, really like to have.

Loans will hurt your business. If you really cannot buy the absolute necessities on your budget, get a part time job to help bring in the dough. Even if it comes down to waiting tables vs. taking out a loan, although the first one requires more sweat it is an INFINITELY better investment.

I haven't taken out a loan--not a big fan of debt. I am just using a free blog for the moment and have kept plenty busy via that and word of mouth. However, I am not making a living off of my income, it is merely supplemental to my day job salary. If all the sudden I was depending on my photography business to pay the bills I might re-consider.

As I didn't want to go into debt, I prioritized the things I needed versus the things I wanted and I have weighed my priorities against the dollar value the items cost versus the additional income each will bring. That has helped me determine the order of my purchases. For instance, a free blog with a few customizations done by myself and high quality business cards came before a fancy website and hosting fees. Would my sessions increase with a nicer website--probably, am I willing to pay interest on that additional expense when given a couple more months I can easily cover the expense debt free? No.

Just my 2 cents though

I think it is a personal choice as to whether you want to go into debt or not, its just not my thing and so far in my little business things have been just fine.

+1 million...


I did not take out a loan.
If I couldn't (can't) buy it with cash, I save up for it.
If I can't save up for it, I get extra work.

Loans are evil.



I think that writing a sound business and marketing plan is a better use of one's time when starting out. Something I wish I would have spent more time on 9 years ago...

Ya I wasn't planning on going all out and buying equipment, but this business is is starting out as a side business and I don't want to dip into our personal funds to 'fund' the start up of the company. Lets just say my husband wouldn't be so thrilled. So I am finding it tough coming up with money to start it up if I can't use money I make at my day job.

I suppose there is no way around?

As long as you do not take too much money their is nothing wrong with using your personal money to start your business. Just be careful and do not spend too much until you have a little coming in.

I would also suggest you contact your local Small Business Development Center. They have some great free or low cost classes on starting a business to set it up right so you do not make any expensive mistakes.

Ya, I am going to set up an appointment with SBA. They have an office near by and offer free 1 hour counseling. I just want to make sure I have all my forms and all my questions before I go in.

I know a lot of people use personal money to start up. My husband is supportive but when it comes to asking if I can do this, get that, he gives me that look. I really want to join PPA because I heard they have counseling services as well. But that's $200 for an intro fee. So far, my funds have been coming from selling 'stuff' on ebay that i don't need anymore. But even then, I am running out of stuff to sell.

Some people recommend an accountant to set up my taxes.. But aren't accountants really expensive? Are there alternatives? I am hesitant to set them up myself as I don't want to mess up.

Thanks!

As far as taxes their is not really that much to "set up" until you establish an LLC or start making a lot of money. You really just need a separate account for all your business money and expenses. Just check with your local SBA to make sure you do not have any other special requirements.

Do not let that overwhelm you until you start making some money.

No loans here, we're going the slow burn route. I wish I could just drop 10K and have a kick ass custom site, blog, and 3 sets of gear, but I just can't. We customized a blogger site and use photobiz for our main website. We currently handle our own print orders and are slowly and surely adding to our equipment (just ordered my new 40d!)

Eventually we want to have a separate wedding site from our portrait site as well as video intro and custom blog. We want a 5D and to use an organizational program like ShootQ. We'll get there. I know we will. And I know that when we do, I'll be so happy that I don't have to spend all my money paying off my credit cards or the bank

(I'll spend it on Christian Louboutins instead! )

No loans for me, but I know some here that have done so.

Please remember: You better have a solid business plan in place if you wish to take out a loan or use credit cards to finance your start-up.

That needs to be etched in stone somewhere.

I did when Mike and I switched to Canon.

It's really a personal decision but in general taking out a loan to start one's photography business is a bad idea. If someone has a sound business plan and can comfortably afford to pay back that loan from their personal income should the business fail, then maybe that might be a situation when it would be okay to do it. But even that is a "maybe".

Then should you really be trying to start your own business? You've got to spend money to make money. And if you're spending YOUR OWN money, you'll be about 1000% more careful than if you grabbed a couple grand loan from a bank.

i think your bank will determine whether or not they feel you are a good risk - if this will be your only income, they will take this into consideration when they make this decision.

if your working 9-5 still and you can afford the repayments - i really dont see waht the big deal here is, people have been taking out small business loans for decades - getting the equipment you need to do the job right i think is what is one of the deciding factors.

but just remember the percentage of small businesses that fail - the odds just arent in your favor. and also the number of photography businesses that are in your area and are your competition.

oh and i dont think loans are evil, i think under the right circumstances, they can really help you out and help you to hit the pavement flying.

Not sure where you are getting your data, but inflation in the US is just over 5% as of June 08. If you are going to give a financial forcast "expected to go higher", you should cite a meaningful source rather than scare folks.

I disagree with your advice not to take out a loan to start a business. In fact, I think it is an excellent idea to go through the process with a bank or two even if you ultimately do not go through with the loan. Why? A couple of reasons.
1) If forces you to think hard about your business plan and have a knowledgable professional at the bank (business pro, not photo pro) review it to see if it makes sense.
2) Sometimes, it takes money to make money.
3) Every situation is unique, and there is no one size fits all answer.

To be quite honest only you can answer this question. Nothing like having the tools you need to do a job. And if those tools are available is the knowledge there to make use of them. How will this money help you establish a client base? From what you have listed so far I would be hard pressed to try and obtain them through a loan with the exception of equipment. Equipment can mean many different things, are we talking office, computer, software, camera, lighting, printing, framing, cutting, etc. Once we have this equipment where wiil we house it all. Commercial space? That would open you up to a whole new dynamic. This could run into the tens of thousands. None of what I have listed though guarantees you a steady flow of clients to pay for it all.

If you have not put a business plan together you are putting the cart before the horse. You've listed some things that you were selling to come up with some start up capital. I found a curious ommission "images".

I used my credit card to purchase my first digital SLR - a 300D back in 2002, then I did stock photography with it, and the stock income allowed me to purchase new lenses, lights and all of my equipment. It came in slowly for a year, but it was all paid in full with that extra stock income.

My post was eaten, so I'll try to re-write it quickly. I didn't cite sources in my original post becuase, uh, no one here on OSP posts sources. This topic is easily Google'd for more information, and I figured that most people either a) already knew about it or b) didn't care enough to read the sources.

What's America's real inflation rate? A decent article that talks a bit about the CPI and why it is so flawed.

Long-term linear trends in consumer price indices is a paper published in the Journal of Applied Economic Sciences and talks quite a bit about the real inflation numbers.

Exporting Inflation to China is worth the read, as it talks about how China sets it currency to the American dollar and how their inflation has more than doubled ince 1990.

Wiki Page on the Inflation tax (with external sources) and its ramifications on the dollar.

That's completely understandable and acceptable!

I appreciate the sources. Your intent seems positive and well motivated, however, I would caution you from posting figures as facts, when they are creative interpretations of the well known standards such as the CPI and Core Inflation Rate.
These well known standards are far closer to 5% including energy and 2.5% for the core rate excluding energy.

The effect you may unintentionally cause with your statement is that the sky is falling, don't take on new business risks! 10% inflation in the US, using established standards, is just incorrect. Citing sources is probably a good idea if you are going to say something pretty far out, like seeing bigfoot.

If you are going to say you saw bigfoot, you better have really good pictures. And claiming an inflation rate (as the standard is described) twice what the truth is...that is big foot. It is irresponsible, scare mongering and wreckless. I doubt that was your intent.

I may not know a shutter from an aperture...but I have 17 years in the securities and credit markets, I have FINRA Series 4, 7, 8, 24, 53 & 63 licenses, I am an MSRB Principal and am one of less than 460 people ever to earn the CRCP designation from Wharton & FINRA.

http://news.bbc.co.uk/2/hi/business/7509729.stm
http://www.rateinflation.com/inflation-rat...lation-rate.php
http://www.hoover.org/research/factsonpoli...ts/4804201.html
http://www.bls.gov/bls/inflation.htm

And most importantly
http://www.bls.gov/cpi/cpifaq.htm#Question_12

This may be harsh, but I think it needs to be said. Why would you expect for a bank to loan you money for a business when aren't willing to invest in it yourself? I understand wanting a "safety net" of your savings account, but still.

I did it the old fashioned way too. I've saved for everything I bought for our business.

You can also book jobs, then rent gear for it. www.lensprotogo.com has almost anything you need to to shoot a wedding available to rent.

I've never had a problem with buying used from KEH either.

Hey Frances-

Yeah, renting the gear you need is definitely a good idea. Samy's, Calumet and Pro Photo Connection are all close to you and rent pro glass for very reasonable prices, and you can rent the gear you need over the weekend for only a single day's fee. I know you use a D300, so you're good as far as bodies go, and renting the pro glass you need won't set you back too far. You can always build that cost into your shooting fees for paid jobs, and for unpaid portfolio-building sessions, it's a small cost to invest in building your business.

As far as the other stuff, you've already got a website + hosting, so I'm assuming that that's a cost you've already set out to cover with your own funding. And since you've settled on doing pet photography, I'd probably take the risk and forego equipment insurance for now since you most likely won't be in potentially demanding situations like shooting a wedding (that's just me though). Though if you're shooting a 150 lb. dog named Butch that might be a different story. LOL.

For business cards just go to WHCC; they're super inexpensive! You can get 250 color printed cards for $25 ($30 for double-sided cards).

For me, the odds are statistically against new photographers when they enter the market (myself included), so you really need to be careful with where you invest your money and how much debt you incur to do it. It doesn't mean that you shouldn't do it, but your decisions need to be based on sound business principles and market research. Part of that is knowing whether or not you've got a viable business to launch, and you won't know that until you know that people like your work and the infant stages of your business are growing. Since your business is centered largely on the artwork you produce, to me it's really too subjective to know that otherwise.

I know you have concerns about your husband being hesitant to support the business with personal funding, but if you're really serious about getting your business up and running you really need to sit down and have a heart to heart with him about it.

Again, my opinion is that taking out a loan when you're just starting out in this business is just way too risky. And if you're hesitant to use personal funds to get things going in the beginning, just imagine if the business fails - then what will you do with that loan on your back?

(Sorry for the long post!)

Saying that inflation is greater than the CPI is not akin to claiming to have seen Bigfoot. At all. I guess we'll have to agree to disagree and leave it at that.

I would just suggest a little of both. I have been in business for about a year. I have been using the money I make to go straight into the business. With the weddings I have already booked for the upcoming year, I felt confident to take out a large loan. My husband is crazy about debt and we would of only really done this after sitting down and figuring out everything. I used Accion http://www.accion.org/ to take out my loan which caters to small businesses loans for women and minorities. I feel as if I am going to keep going up on my prices I need to have the equipment to back it up. I would not change this and quick frankly dont know how you can do it when you buy very slowly. I am also heavy on the advertising this year to get my name out, so that takes a lot of money as well. But it has paid off. So just make sure you are happy and that you do what is in your best interest. Neither way is bad (loan vs. no loan) as long as you think things through.

Good Luck!!

I don't think there is anything wrong with borrowing money. I can understand that you would like to keep your own money liquid and not wrapped up in assets just in case you need it. I have borrowed money for camera equipment...at 0% for a year. I put away money in a high-yield (which is not so high-yield anymore) savings account and once the 0% is over I have the money paid in full...and I saved a little while borrowing. You just have to be sure to pay it off immediately because those interest rates could kill you!

Seeking out help from a bank is also a good option. Interest rates are low now so it is to your advantage.

Find out how much you need. If you are uncomfortable borrowing, set up a savings plan until you reach your goal and then borrow it from yourself and work out a paying schedule. In the meantime research advertising strategies, work on your skill level, practice with family and friends, etc.

I borrowed money.

I have a personal loan and credit card that I am paying off slowly via my wedding bookings. It is a hard one - spend as you make it or spend upfront. I do think if you spend upfront on valuable things - like a good website, good advertising, good sample products and good equipment - you will be much better off in the long run, but not the short term.

In my biz plan I will have paid off the debt in a year. I am working part-time still as a teacher to help pay back the debt and I am not worried about it. People who I book say I am professional, I offer professional products and have a modern and professional website. I know these are the main reasons they book me.

I have always been the type of person that wants things now and pays later - it's just in my nature, but I am always confident of things working out. I did have a good business plan but it helps being an English teacher I suppose.

ETA: By the way it will not be 'a thousand or so' to set up a professional business. I have spent $25 000 setting up my business over the past year. Not to mention the amount spent on the University degree a few years ago.

I echo the need for a business plan. If you are going to get a loan make a time line of how and when it will be paid off.

However, I'd advise against taking out a loan. Take it slow, get your equipment as you go. You probably would have to dip into your personal funds to do it though.

I borrowed too.

This is my situation, I am married, 3 kids and I paid off the house before I met my husband. So borrowing $25K to start was a no brainer for me. But that is ME not YOU.

This is what I did. I bought my camera, 2 L series lenses, my Macbook Pro, Adobe CS3, Flash and Camera Bag. All the other things like website, aditional lenses, CF Cards, business cards, sample albums and products have all been paid for by my earnings. I have in less than 12 months also paid off half of the business loan. Every dollar I earn goes back into my business and I will continue to do so for the next year. That is my business plan. After that next year I will be able to pull in a good wage for myself, until then I am very comfortable and I have no regrets.

Wow Cath, genuine kudos to you for having your house paid off and your finances in order. Clearly for you it made sense to borrow. That's how it's supposed to work! It's a shame that so many other people get in over their heads.

Thanks Bryce. I agree, you have to make decisions that suit your financial situation and have a plan. I plan on selling my house in 2 years, buying some acreage and building a home + outdoor studio. It's my dream and I will continue to work to it. Why 2 years, well by then I'll be shooting more weddings and I'll be able to show the bank my projected income and my first 3 years of tax returns.

When I was getting started, I took every second shooting job I could find (some paid as little as $50 or $75!), and banked every cent until I had enough to buy the next piece of equipment I needed. I should have spent more time renting, and less time buying - lesson learned!

The only real expenses to focus on in the beginning should be equipment and business cards. Its easy to drop tons of money on gadgets, marketing materials, websites, actions sets and fancy programs - just stick to the basics and you'll be on the right track. Also don't go overboard on album samples - I spent loads on albums in the beginning, when I didn't really know what I wanted to offer, and ended up shelving them a few months later.

Best of luck to you!
Laura

Indeed it does.



ETA: I started out buying equipment and software on a credit card. I went back and forth between going to school and teaching myself with whatever I could get my hands on. I figured a credit card to be the better route to equipment that could produce income and not student loans that may not guarantee jobs. A year and a half later I'm working to pay off my debt and build my business on a cash-only basis. Here's the thing your business should make you money... I was throwing too much money into the mix charging this and that to realize the business wasn't throwing off any money. Now I'm working to keep things honest. I'm paying down my loans, polishing a business plan, and taking things one step at a time. I've never been frantic or restless about the debt -- of course now, I'm fanatic about making it go away; never to return again. That has more to do with Dave Ramsey and my own change of heart than anything else.

At the end of the day, you do what works for you. I can't say debt has worked for me. I was the prototypical buy what you want, instead of what you need case. Either way, you learn (hopefully), and make adjustments as you keep it moving. Having a sound plan to follow makes a big difference.

I've been doing the same thing! I also bought a lense on Ebay... my 70-200 2.8. I saved about $400. I'm getting burned out with Ebay though and still have alot to pay for. A loan seems easy but debt is not so easy.