When I was starting my business, one of the things that frustrated me most was not being able to find information anywhere I needed or wanted, or if I did anything; it was written by Americans and not really relevant to me over here in Australia!
A recent phone call with a mentoring client got me realising that nothing much has really changed in the last four years, except that now I have all that information I needed and wanted (earned through a lot of blood, sweat and tears) that I can share with you. No doubt my background as a lawyer has also given me a huge wealth of knowledge and experience to draw from which many people won’t have access to.
One of the most important things to me is cultivating a spirit of community, not competition. There’s enough work for all of us, and the more we learn from and support from each other, the more we connect with each other, the happier and more fulfilled we will be (or so I believe anyway).
Being a photographer is about more than having a camera and taking a photo, so if you are interested in turning your hobby into a business (whether it's photography or not, these tips will help you as well) then please keep reading, and I hope this helps you!
Strap yourselves into your office chair (make sure you have a cup of tea and a notebook handy) - this is a long one!
1. Balancing admin and creativity
When you first pick up a camera, and start learning how to take photos and editing them (or any other creative activity really) – that’s all you do.
But you need to wear many hats when you run your own business, and the truest piece of advice I ever read on the internet was that running a creative business is more like 80% admin, and 20% creativity.
The sad truth is that I stopped taking personal photos, almost the same month that I started being paid to take photos for others. My husband and my dog hate having their photo taken, and I haven’t found a project that inspires me enough to pursue it yet (just waiting to have babies now I think, because I’m full of inspiration about that!).
And it’s not a bad thing! I bloody love what I do, and my creativity is challenged in other areas of my business now, like designing pricing guides, learning marketing, learning how to take better photos of my clients, all of which is fun and exciting.
But it’s definitely different to when photography was just a hobby, and you need to be prepared for this!
So now that I've got that out of the way, let’s dive into the more business-y side of things.
2. Decide on your business structure
There are multiple ways you can run a business in Australia, but there are certain legal requirements that you must follow.
You must legally register your business in Australia, with ASIC (http://asic.gov.au/). You can register a variety of different types of businesses, as either a:
- Sole trader;
- Company; or
For people who are just starting a small creative business where you are the only person working in it; then it is likely that running a business as a sole trader will be all you need to do. However this might be different based on your financial and personal circumstances, so if you aren't sure then you should absolutely seek independent financial and legal advise.
For more information on the difference between the various structures, you can read this article on the Australian Government’s business website (https://www.business.gov.au/Info/Plan-and-Start/Start-your-business/Business-structure/Business-structures-and-types).
Running your business as a sole trader
All you need to do to have a business, is register your business name with ASIC to get an ABN – and you are done! You have a business!
You will need financial advice as to whether you need to (or should) register for GST. Essentially, you do not need to register for GST unless you are generating revenue of more than $75,000 in any 12 month period (not a calendar year, or a financial year, it's any twelve month period).
Yes, it’s one of those annoying things that you pay for and may never use…but imagine the following scenarios:
- Your camera gear is stolen….all $10,000 of it. Do you have the capital to re-purchase it? Or ability to pay off a loan to re-purchase it? Or would this ruin you and your business?
- What if someone trips over your camera bag or tripod, and breaks their neck? What if they sue you to pay for their medical costs because it was your fault and you negligently left the bag in a spot where someone could reasonably expect to trip over it? Would this bankrupt you?
- What if you lost someone’s wedding images because all of your memory cards failed? What if they sued you for this loss?
Does that give you the cold sweats?? It should!!! It's the stuff of nightmares. So there are three different types of insurance you can get to cover these scenarios:
- Equipment insurance;
- Public liability insurance;
- Professional indemnity insurance.
I’m not going to lie – it’s expensive, but SO worth it if anything were to happen.
When you run a business, your equipment is no longer covered (if it even was to begin with) in your home insurance policy.
Some insurance copies, which cater specifically to photographers, will also send you emergency hire equipment or pay for your hire fees until you can obtain new equipment.
Public liability insurance
This insurance covers you for things like:
- Someone tripping over your negligently placed equipment and injuring themselves;
- You backing into someone accidentally, and that person falling over hitting their head and suffering permanent brain damage and that person’s family sued you for 3 million dollars to cover their medical treatment (this actually happened in the UK);
- Damage you negligently cause to someone’s property (even if it was accidental, it can still be negligent)
- Damage you negligently cause to someone’s goods (for example if a client sends products to you for a commercial shoot and you spill red wine all over them and ruin them…you need to pay for them, and pay for the clients costs to resend them to you).
Professional indemnity insurance
This insurance covers you for things like:
- Memory card failure;
- Clients being dissatisfied with your services.
Your insurance policies usually cover your legal fees in defending these kinds of matters, as well as any damages you might need to pay (up to a certain amount).
Only you can decide what level of cover you can afford, or think you need based on your individual circumstances! You should always obtain quotes from as many companies as possible, to ensure you are getting the best level of cover for your $$$.
It goes without saying that you should always read your insurance policies. They are boring as batshit, but you really need to make sure you understand what you are covered for, and what you are not.
There are many insurance companies in Australia that will cover you as a small business, but there are a few who cater specifically to photographers and I’ll link them below (these links are not affiliate links, nor are they sponsored, just the companies I found to have the best policies for the best dollar value over the years).
- Professional Photographers Insurance Broker (http://www.photoinsurance.com.au/insurance-policy/public-liability-professional-indemnity-insurance)
- Aon Photography Insurance ( http://business-insurance.aon.com.au/Professions/Entertainment/Photographers)
- AIS (http://www.aisinsurance.com.au/specialist-classes/photographic-equipment-insurance/)
4. Contracts + Other Legal Docments
I wouldn’t be a very good ex-lawyer if this wasn’t near the top of my list!
Let me clue you in on a little piece of advice for free: CONTRACTS CAN SAVE YOUR SOUL FROM THE DEVIL, OR SELL IT TO HIM.
A well written contract is worth its weight in gold (and more), and should protect both you and your client.
There are some very, very, very basic contract templates available from the Internet, and some more advanced ones you can buy, however many of these are written by Americans, which are not applicable here in Australia with our very different laws and could get you into a lot of trouble.
If you provide several different types of services, you’ll need a contract to cover each of these. You wouldn’t put the same terms in a contract to your bride, as you would to a commercial client or a newborn client for example. And what about people buying gift vouchers? You need a contract for the person buying the gift voucher, and a contract for the recipient of the gift voucher (once they contact you) especially to deal with things like who gets a refund in the event of cancellation etc.
While they might be similar, there are difference for each type of work that need to be provided for.
In every contract, you also need to cover basic things like:
- The scope of your services;
- Fees & payment terms;
- Refunds, cancellations;
- Limitations of your liability;
- Model releases and child releases;
- Copyright and intellectual property;
- Privacy & Confidentiality;
- Governing Laws & Dispute Resolution.
GET A GOOD CONTRACT PEOPLE!
B. Other Legal Documents
Do you have a website?
Australian law requires that you tell people what you are going to do with their contact information, and how it will be used (and Google will punish you by penalising your website in search results if you don’t have one).
Okay, okay - I hear you screaming at your computer screens “...but I have NO IDEA how to write these documents!”
It’s okay, there’s this nifty website called TermsFeed where you can input your business details and they will generate these two documents for you (that are customised for the laws of your location) and they don’t cost too much either. And YES - they can be specifically modified for Australian laws. And NO - this is not a sponsored or affiliate link; just sharing coz it's great!
Of course, you could copy-paste these documents from other websites if you are into that kind of stuff, but I don’t recommend this (obviously) because you need to make sure that the contents suit your business needs (and that's also a breach of copyright).
As a registered sole trader, you are not legally required to have a separate bank account for your business.
You could use your personal every day bank account, but I absolutely do not recommend this because at tax time you will rip all of your gorgeous hair out of your head in frustration in less than 10 minutes (#satisfactionguaranteed).
Your accountant will also (most likely) insist that you get a separate bank account – it’s just common sense, and will make your life a million times easier. It was the second thing I did after getting my ABN (you’ll need an ABN to open a business account).
You could alternatively just open a personal account too, and while you might avoid bank fees; you’ll look more professional for sending your client an invoice that links to a business bank account because you can say your "Account Name" is "Lecinda Ward Photography”.
Not a huge difference – the important thing is that you just keep business monies separate from personal monies.
Do you need an accountant?
Even if you decide not to use an accountant regularly, you should absolutely consider investing in a one off session with a book-keeper/accountant to ask questions like:
- What’s a business expense and what’s not;
- What can you claim as a deduction?
- What do you need to provide to your accountant at tax time?
- Do you need to register for GST?
When I first launched this business, I started with a trusty old Excel Spreadsheet, but I outgrew this really quickly.
Like I said in a previous post, I'm really determined, so I stuck it out for nearly a year before switching to a proper client management system, that managed everything all in one place. When I did it was like the heavens opened and I heard angels singing.
Originally I used LightBlue – however once I followed by own advice and finally invested in some accounting advice, I learned that this software didn’t do everything it needed to do for tax time (namely, provide reconciled bank statements).
So now I fork out some money every month to Xero. It makes tracking and managing my income and expenses a gazillion times easier than any other program I've ever used, especially now that I am registered for GST and have to send of BAS statements. It attaches to my business bank account, and I can assign and write notes on each transaction as well as match income to client invoices so I know at a glance who has paid and who has not. Plus my accountant loves me at tax time (errr…one can hope).
Yes; it's very expensive.
And yes; I hate all the subscriptions we need these days to function. What a hole in my wallet! Annnnyyyywaaayyy...some things are just unavoidable.
HERE'S THE TL;DR version
Want the TOO LONG; DIDN’T READ version? Don’t blame you, I talk a lot.
Here’s the basic overview:
- Embrace the new level of paperwork that is about to enter your life as a creative professional;
- Register your business as a legal entity of some kind;
- Get insurance to save your pretty tooshy from financial trouble;
- Invest in a good set of contracts to also save your pretty tooshy;
- Find an accountant or book-keeper, even for just a once off session to ask all the beginner questions you need answers too (I recommend Stacy, from Healthy Business Finances, she's a total GEM of a person, and offers a variety of coaching and training services to get you up and running #notsponsoredjustlove).
I’ll be back next week with Part 2, which gives some insight into client management systems, branding, pricing, marketing etc – so stay tuned!
Thanks for reading ♥