Managing the Finances of Your Photography Business
If you’re managing a photography business, you are a business owner who may be enjoying the benefits of choosing your work schedule and having full control of your income. However, one of the biggest hurdles new business owners have is not being able to control their source of income. As opposed to traditional employment, one day you might be bringing in a good amount of money from multiple clients, and the next you could find yourself without any work at all. With an unsteady flow of income, one of the keys to surviving in this industry is being able to manage your finances.
Budget Your Income
When running a photography business, you are often going to be paid on a commission. This also means that you can choose to charge more than at a part-time hourly job. However, while these high earnings can be exciting at first, there’s also risk involved. Without proper budgeting, you might find yourself spending all the money in one go.
Keep in mind that even if you’re receiving a lot of work now, there may be weeks or even months when you won’t have any new clients. To mitigate this potential financial loss, start tracking your weekly and monthly expenses. Then, budget out your money from commissions to cover these expenses over a long time. For example, if you have $200 of expenses every week, and you earn a commission of $600, divide that $600 over three weeks, allowing you to have three weeks of the costs covered off of one commission. You can do this after every commission, giving you a long term-safety net.
Separate Your Finances
Whether your photography business is a side hustle or your primary source of income, you are going to need a different bank account for your company. One of the best ways to create an easy-to-manage business account is to sign up for an online bank account. Online banks offer a direct way for you to access your finances, so you won’t need to drive to a bank every time you want to make a payment or transfer money. This can be a great way to keep your finances organized and prevent them from getting mixed up with your finances.
Remember: your income will also be taxed quarterly. It’s a good idea to manage all business income in a business account, thus being better prepared for when income taxes hit. Consider looking into the Federal Income Tax Brackets and see where your enterprise would fall in line. Once you know how much your business could potentially owe, put aside that percentage for taxes. Having your business income in a separate account also allows you to keep track of business expenses, giving you options to use as tax write-offs.
Keep in mind that taxes are complicated, and this is only a rough guide on preparing for tax payments. As you begin to get more invested in your photography business, it will be especially important to consult with a tax expert or financial planner. They can help you get all of your finances for when tax season rolls around.
Reinvest in Your Business
As you start to get more serious about your photography business, remember that you should be in it for the long game. Now it’s time to start reinvesting some of the leftover money from commissions. While this can sometimes mean hiring employees to help save time and earn more money, going this route may not be for everyone. Some people prefer to focus on their work as photographers. This is entirely understandable, and not the only way you can reinvest and grow your business.
Instead, consider looking into buying new camera equipment, better editing software, or marketing materials for your business. By doing this, you are going to be able to show that you are a serious and professional photographer to potential clients. This will allow you to grow your client base and provide better results for them as well. By offering better results, you will start to see more clients coming back to you for projects regularly. Over a more extended period, this will result in a steadier source of income, as well as the ability to charge more money for your services.
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