Sales tax, insurance, business licenses oh my!

Q. Are a business license and a retail license the same thing? Other local photographers say to have a license for each city/county you live in, but I’m not really sure how this works. Thank you!

 

A. This is such a tricky answer generally because different jurisdictions use different terminology when they mean the same document.  Business licenses are typically the permission to DO business in a area (home based business, etc.)  and retail licenses are typically the permission to have a retail space (like a studio).  Keep in mind some places have these as one document, some are separate – and some use the terms interchangeably when they mean the same thing.  Make sure you have a credible and informed source to help guide you on this!

 


 

Q.  I have an almost non-existent marketing budget. What can I do to get the word out about my business. I don’t want to spend money on something that won’t bring clients in the door. Thank You 

 

A.  Marketing is so crucial to business that you should definitely invest, however, this doesn’t mean you have to be extravagant to make it work.  During my first year of business I wasn’t even sure I was going to “make it work” so I was afraid to invest alot of funds so I found creative ways to market.

  • Forward Plan

If it’s the month before Christmas and you’re just starting to market, you’re already left behind!  By planning out your marketing plan ahead of time you can watch for sales, research creative and less expensive ways, plus the longevity of marketing has a probability for increased success over a short period of time (thus, maximizing your money!)  Forward planning also will keep from impulse spending, that can result in blowing through your marketing budget and cut into profit. Sit down, plan out your yearly marketing plan.  It’s not written in stone tablets so it CAN be changed but it will help keep you on budget and creative track!

 
  • Hit up after holiday sales/off season sales
Stores like to clear out their shelves after holidays.  Photography vendors are no exception! During the “slow” times (right after Christmas through Spring) stores/vendors offer incentives and lower prices to get rid of older inventory.  Utilize this time to stock up on your packaging and marketing products
 
  • Keep your social media/blog interesting
What is better than FREE marketing? Web presence (aside from internet, hosting and domain) is the cheapest and easiest way to spread the word about your business.  This will give you the most bang for your buck if you’re utilizing it correctly.    Also, ensure that your SEO is working for you. These are no -cost things you can do to increase your web presence!
 
One of the biggest tips to having web marketing working for you is engaging your clients/fans.  Utilize free and low cost applications (such as RipeSocial) to provide capabilities to your Facebook page that make it stand out against your competition!
  • Have others market for you!
Do what? Yes! Seriously!  I’m not talking just word-of-mouth.  Get engaged and plugged in with local businesses or vendors that are willing to talk you up.  Scratch their back and they’ll scratch yours!  Keep a list of preferred vendors that you know (i.e. that you trust!) and that have a quality product.  Work out a system!
 
This is especially true for client incentive programs.  You don’t necessarily have to invest alot in your client incentive program – just a small thank you will go a long way to encouraging your clients to spread the word about you.
  • Buy in bulk
After looking at your entire budget and allocating for what type of marketing you want to use, figure out how much per client you want to spend.  This will help when you go to buy in bulk to ensure that your cost of items aren’t cutting into profit.  Every time you go to spend keep in mind what you’re going to use that item for and the PPU (Price per unit).
 
 
Don’t forget to use a free application, such as Google Analytics, to give you feedback on how well your marketing is working!  This will tell you the time of day people are logging on the most, where they are coming from, what campaigns are working or aren’t working! This information is FREE And so crucial to your biz!
 
 
See: Marketing Offline and also check out the online course Marketog <~~ phenomenal course!
 

 

Q. Best piece of advice for someone who is starting a proper business plan and sticking to it

A.  Always reevaluate at least quarterly – Check your benchmarks and where you are falling short.   I really recommend a monthly view at session and income goals and real numbers but at least quarterly adjust your plan as you need.

 


 

 

Q. What about photographers who live close to state lines or shoot in more than one state? State and Sales tax-wise what do we charge, who do we pay to, etc.?

A. The general answer is that whatever state you enter into to photograph (and that product/service is taxable) then you submit sales tax to that state for that transaction – not the state you’re set up in or a resident of.  Don’t forget you need to register + pay sales tax according to that state’s requirements!

 


 

Q. When you photography a charity event for no charge or as gift-in-kind do you need model releases to post to social media/advertising?

A.  Model releases for charity events, or any events not for pay, still have the same model release rules that paid transactions have.  Keep in mind public rules (such as the principles in this article on Street Photography). It is a good rule of thumb to always get  model release if possible – many times events will include these in their event registration terms – making it super easy! Always double check the language to make sure you are getting the appropriate permissions you need!

See: Model ReleasesContracts and Commercial Use Licenses

 


 

Q. Do you need to charge sales tax?? For shoots or giving them prints…

A. Majority of states charge sales tax, each state is different when it comes to what is charged -whether products, services, both.  It even gets more complicated when you deliver digital files only – some states require sales tax, others don’t!

See Taxes for Photographers

 


 

Q.  Business licenses . I know it varies locally by city and state. But I gave had the hardest time figuring what I need for the area I live in. I’m afraid I’m missing something that’s required

A. If you need more 1:1 help I can help you do some research through consulting services  or you can call your local governing body as well – they can’t advise you on business decisions but can send you to resources.  I wish you had left your info on the question to help answer a bit more !

 


 

Q. What type of insurance should a photographer have and why?

A.  There are a variety of insurances depending on your business plan and circumstances.  At the very least you need liability and equipment insurance.  If you have a studio then add on property insurance.  There’s also disability, death and other insurances needed.

 


 

Q. How does tax work for a business? Do I pay income tax only on what I take for income, or entirely on what the client pays me?

A. Your income tax is calculated based on your business income numbers.  You take your gross business receipts and subtract costs of goods then you get your gross profit.  From there you can also deduct expenses and depreciate equipment.    Report it all, deduct what you can, consult a tax professional, pay your taxes! Don’t forget state income and sales taxes too!

 


 

 

Q. If you shoot on location do you charge sales tax per the area you are in or do you charge where your actual business is located? How does this work? Is there an across the board sales tax that you are supposed to charge?

A. The general answer is that whatever state you enter into to photograph (and that product/service is taxable) then you submit sales tax to that state for that transaction – not the state you’re set up in or a resident of.  Don’t forget you need to register + pay sales tax according to that state’s requirements! Even when it comes down to counties you may have a varying tax rate – so if you shoot in another county within your state there may be another tax rate to be mindful of!

 


 

 

These are just really quick answers to help steer y’all to  get some research going.  

IF you’re still overwhelmed and lost here are some more resources:

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