Is your photography business starting to boom? Have you made more money this year then you expected? Maybe its time to start incorporating wealth building strategies into your business to help you grow even more successful in the future.
When you have a 9 to 5 job, they take care of the payment process for you. Every payday you get an expected amount of money, and you know you have a certain number of days to use that money before you get your next paycheck. So you learn to budget.
But with a photography business, it’s up and down all the time. I remember some summer months we could bring in tens of thousands of dollars in a single month. Then early spring rolls around, and we would be lucky to bring in a couple thousand. How do you plan for that fluctuation?
1. Pay yourself first.
It’s easy to take the money you earn during the month and spend it. Yet that may leave you short in the slow months. Instead, budget out what you need every month to survive, and give yourself a paycheck, just like when you worked a 9 to 5. You’ll find this is easier to make sure the bills are paid, and give you the freedom to know you’ll be covered each month, no matter what your booking rate is.
2. Create separate savings accounts.
Set your business up to take care of you in a variety of situations. Make sure you have a retirement account for the future. Build up an emergency fund to cover the slow months. How about an equipment account to replace or add to your camera gear? The more you make, the more you can work into your budget. And if you create an account and only buy when you have money in the account, you’re less likely to buy during the good months, leaving you short in the bad.
3. Protect your assets.
This is a business, so treat it like a business. Check with your lawyer/accountant about setting up a corporation. By having your business as a corporation, you are limiting your liability to the businesses assets, and a potential lawsuit won’t be able to come after your personal assets. Also make sure you are fully covered with insurance: health, life, disability and liability/business coverage. As a business owner, you may find insurance is costly and opt out of full coverage like many small business owners do. Make sure you consider the consequences first. Lawsuits, car accidents and major disabilities can wipe out everything you have very quickly. Talk with an insurance expert who can steer you to a variety of small policies, and look into associations with insurance options as well. Professional Photographers of America has always provided great business coverage to photographers, and has helped many out when sued by a client.