How many years until you make a profit? ;)

I am into my second year of photgraphy and I'm doing very well. My question

is, does putting all of your money back into your business ever end? I can't

help but buy things, back-up equipment, new lenses, new website, etc. I have

been pretty good about buying only what is necessary to take my business to

the next level with the occasional splurge. ;) I imagine I'll be satisfied

with my gear at some point right? So to all of you veterans, how long was it

before you had what you wanted and started raking in the dough?

'started raking in the dough?'

Pardon me while I fall about the floor giggling! :-). I make enough from my work to pay for my rent and the mortgage on a house that I will hopefully move into in December. Enough for the food and bills. For all that I'm earning far less then my friends with regular jobs, but I work less and am far more relaxed. Wedding photography isn't the only thing I do, the Barmitzvas and commercial jobs fill in the gaps nicely.

Once your equipment is paid for, and your learning paid for, you can make a spreadsheet of all your costs for each job and the amount of profit made. Offset that against insurance, upkeep, tax, etc and you get an idea of how much profit you are really making. If that profit is enough to satisfy your needs and your pride, you are doing OK. If you are coming out with a minus or not enough to satisfy the above then you have to really look at your business in general. It doesn't make sense to buy equipment with the profit from the work. Buy it up front and use it to pay off a loan with the increased profits realised by using your top level equipment. If the need for better equipment will not result in higher revenues then you have to question the expense and maybe seperate it from your business, i.e. you are buying for your hobby.

I have no business training but that is the way I work and it seems logical to me.

I shot my very first wedding in 2001. Didn't begin pursuing it seriously until 2004. Went

full-time in 2006 (no other income) and barely scraped by, what with the costs of both living

AND doing business all coming from the same income pool. Our revenue for 2007 will be

double what it was in 2006, but we're still not "raking in the dough" by any means.

We made a profit relatively quickly, but it wasn't much of a profit. Earning enough to account

for everything from the daily bills to retirement to healthcare is a much bigger achievement.

The whole truth is that some years you will make more than others.

It is tempting to keep putting money into the business but you need to really ask for each purchase "will this make me more money or is just something I think I want." SO HARD TO DO.

In reality I do purchase equipment although not as much as a beginner might but in the last two years we have gone full digital so that ment more cameras, matching flash and handles etc. Right now about to upgrade computers to allow for a dedicated huge memory and hard drive option only for use with image processing. Will it make me more money YES and save time which equals money for sure.

In looking at my income history I have supported myself with photography right form the start but there were lean times and better times. Much depends on your expectations and how you regard time for work and time for life.

At this point in my career I value time for life a bit more than money and am more selective in the work I take on happy to pass on some things to those getting started.

Photography is a business and you need to allocate and keep track of expenses and revenue to be sure you are making money. More photographers go under from cash flow problems than from not being talented! It takes discipline to work through that the money taken in on a job is not all profit, some needs to go to overhead and some to furture expenses not only for that job but to get the next and the next job.

Brooke

Brooke said: "It takes discipline to work through that the money taken in on a job is not all profit"

I agree with Brooke and think that's where a lot of people underestimate what they're making/spending and could use help. For example, when my fiancee first struck out under her own company about four years ago. She understood many of the business-side things she needed to do but didn't want to do. (Her favorite song back then could have been "Math Suks" by Jimmy Buffet) I had to remind her to make sure that she was paying herself first, not just putting money to the tax estimates, business expenses, and equipment maintenance/upgrades. By planing things like retirement contributions, short-term savings, debt repayment, and take home salary, she could continue to make her personal and business bills during our slow months in July and August. That's not to say we didn't have some big ticket problems (hurricane canceling part of the 3rd and most of 4th quarter 2005, a very slow 2006, cat surgery, camera surgery, and her computer power supply going boom and taking out the motherboard in 2007) but having those funds both in the business and her personal account meant she was able to keep from making too much of a run on her line of business credit or worse the Bank of Jeff.

Hiring a professional accountant and/or financial planner does wonders if you are also in the "shoot more - math less" camp. They're good at keeping track of where your money is going and when you have the cash to make upgrade/ backup purchases instead of making last minute emergency purchases.

While it's nowhere near "raking in the dough" her business is doing well and hitting goals.

I'm not quitting my day job.

I started shooting weddings to be able to buy more photography equipment. I wasn't trying to "rake in the dough," just buy anothre camera, and a few lights. After a few years of playing around with it, I started to see the potential for making real "play money." Then along came digital and there went a couple seasons of play money. Still today a big hunk goes into buying more photo stuff. I just can't help myself.

I'm sure glad I'm not trying to make a living off this. :)

I am just coming into this career after 15 years in the financial planning field. I am very excited to be running my own business and trying out all of the strategies I have studied over the years. Some of these strategies are those of big business and some are those of my successful clients.

The strategy of this original post is not unlike that of a farmer: always putting last years profits back into equipment. Their mentality is that one day when they sell their farm it will be high yielding and their equipment will be of high value so they will get top dollar. This was told to me by a client who was a farmer. Luckily his wife worked for Wal-Mart so he could retire on her company stock.

Take stock in Jeff Caradona's post above and "Pay yourself first".

Books to read are "The Richest Man in Babylon", by George S. Clason and "The Millionaire Next Door" by Thomas J. Stanley.

It is so hard to resist acquiring new equipment. I want a Nikon D200 but am waiting for my D50 to die first. I would love a collection of prime lenses but my 18-200 VR Zoom is still helping me get going. I would love a pair of Quantums but my on-camera flash with light sphere has incredible capabilities. I really want that Bludomain.com website but my customized Smugmug account will have to do for now.

Making a living as a photographer is tough.

Making a consistent profit is really tough.

Owning your own business and having a high credit score is a real challenge!

If photography is your business, then IMO a better question would be 'How many MONTHS until you make a profit?' (I'm talking about real profit here, not profit for tax purposes).

Wedding photography is capital-intensive, but the capital expenditure is low in comparative terms, if you compare it to the capital expenditure needed by a studio photographer, or to the cost of just a basic pickup truck or van as used by a jobbing builder - you can get all the gear you actually need for a lot less than the cost of a van.

If you can't recover your capital costs within a few months, while paying yourself a good rate, you're either spending on gear you don't need, or not doing enough weddings, or not charging enough, or spending too much on other overheads.

The trouble now days is the influx of wannabe wedding photographers. They have dilluted the market, and lowered quality and prices drastically. And most don't know how to change the settings on their cameras.

The biggest expense in this business like most others, is labor. And sales and marketing is a large second. Untill digital reared it's ugly head, wedding photographers bought new gear every 5-10 years. Not every year. A serviced 20 year old 'Blad, shot the same image as a new one. Now days my head spins watching people play the incredible increasing sensor and mega pixel size games.

I have first bridal fair is in August, and honestly wasn't prepared on the cost of things.

From equipment, insurance, sample albums, upcoming bridal fair, computer, software, digital bodies the investment never ends.

I've scratched enough togeather, but it's almost a given that I have to go forward just to justify and recoup my digital investment.

The short answer is, well, it never ends~!

But, I'm hoping it does. I started four years ago on a shoestring, and have been using extra profits to buy more gear, and so forth, and I still have some lenses that i need to buy, maybe one more camera body.

I could sure use one of those nifty flash sites, but I'm not certain if it would help.

Patrick

According to my accounting software, I'm currently turning a teeny-tiny profit, although it basically just means that I'm paying myself a well below minimum wage pittance. I'm gearing up to do my first advertising 'campaign' (thekknot.com, and a yellow pages ad) in August, so I've been putting money aside for the less fun stuff, like a color laser printer, folders, sample albums, advertising expenses, PPA membership, insurance, and those expenses. It's been tough to convince myself to spend money on that stuff, though-the Mac Pro i just bought, and the QFlash I ordered today are way more fun things to spend money on. But, the way I look at it is if I don't spend money on the business stuff, all my fancy camera gear isn't going to do me much good, because I'll have to sell it to pay rent :)

However, I agree with Garry that there is a much lower cost of entry to the photography business than many other industries-as far as equipment goes, a wedding photographer could be very well equipped complete with backup equipment for under $20,000, while a contractor would have about half of a truck.

Of course, there is the trap of their always being better gear out there....I would love to get a Hasselblad, digital back, and a bunch of Norman heads to light everything, but I'm sure once I got that I'd find something else to spend money on.