Starting the Business...

I kind of romanticized having my own business. Being in charge. Working for yourself. Take as long a lunch as you want. Well, I'm not quite there yet. I've actually taken the conservative route and I'm doing this photography thing as a side business while I work at a real 40-hour per week corporate job. I think for the photography business it's the wisest choice. There are a lot of people doing photography here in Orange County, let alone California, and I know I could not make enough doing it to live the life I can afford with my regular job. My advise is unless you have a ton of money in savings that you can afford to do your business full-time, or your idea has a niche market that will rabidly go after your product and/or service, you might do the same thing.

Still, there are certain steps you need to take when starting your own business. In a nutshell that's as follows:

1. Pick a company name or use your own name. If you choose a company name (like "ACME Photography"), you need to fill out a "doing business as" or DBA with the state and city where your business will take place. If you use your own name, you usually don't. When you do a DBA, you go to city hall and they will check to see if the name is already in use. If it isn't, it's yours! But to be sure, some places require you file your new business name in some sort of periodical just to inform everyone you exist and make sure nobody else has the name. This can vary, so check with your local city.

2. If required - get a business license. Some cities require you apply for one, some don't. My city didn't. Check with your city and find out. Lots of times you can find out on the web if you do or don't.

3. Get a Federal Tax ID Number. This identifies you to the federal government as a legitimate business. This means you have to pay taxes as a business (if you make a profit), but it also allows you to do write-offs for business expenses. I got to write off my new camera, lenses, and trips to Washington DC, Seattle, and New York because I have this ID# (my father-in-law is an accountant so he figured it all out for me - check with an accountant to see how it works). Without this ID#, the feds don't know you have a business, and if you start writing things off without it, you can get into trouble. This also lets you get things like a resellers permit (which I'll explain next) and business accounts at banks. Some vendors you work with may require to see it too.

4. Resellers Permit. You need this if you are selling a product. Since I'm doing photography, I can use this to sell prints of my photographs, or even framed prints of my photographs, and charge whatever I want to charge. Now if you aren't selling anything physical yourself, you don't necessarily need this. You can upload your photographs to Websites like Shutterfly and sell your photographs through them if you purchase a business account. Stock photography sites like iStockphoto or Photospin will sell your photographs for stock. Since they are the ones actually selling your photographs, you don't need the resellers permit - they do. And because they do, they are required to charge people sales tax, as are you if you get a resellers permit - as long as you are selling something physical like a print or even a CD with images on it. Interestingly enough, if you provide a customer with an image via e-mail or a non-physical way, you don't have to charge them sales tax. That may change in the future, but right now it's the rule - at least in California. With a resellers permit you can also get discounts at certain places. For example, you can buy frames wholesale and get a discount through them if you provide a resellers permit proving you are a legitimate business and you'll be reselling what you're purchasing.

Now this is what I did to start my business. Check with your local and state governments to make sure of your rules so you don't get in trouble. And as I mentioned before, if you use other vendors like Shutterfly or iStockphoto, you don't even need the resellers permit - but technically you can't sell your physical prints or CDs to other people.

How did I learn all this? Talking to small business owners and doing research on the web. That's all part of having a plan as mentioned in the previous post. Your results may vary, so do the research and find out what you need.