Going into debt to get started as a photog?

[tcphotodesign]

How many of you and how much have you gone into debt starting out in your photography business?

Or have you? what can you share to help others who may be starting out or just trying to keep the wheels on...

How much is a resonable cost to get started at a minimum and how long to begin to see a recovering of cost to start?

For example: A basic SLR Canon 40D for example, flash batteries, CF cards, a bag, tripod a none L series telephoto lens, a wide angle 18-55 usually comes in a kit.

$3,000? Then you have a computer, software, some business cards, a cell phone or land line. A reflector or some home made materials...

Join ASMP or ASPP or a local photog group. Web site costs,

You get the idea, tell your story if you don't mind so we can all understand how to go from point A to point B and so on....I've been there but still is on going, let's hear from you-
Highlights and lowlights all are welcome in this forum. Don't be shy:o

[tim]

That's not enough to get started, really. Take a look at the gear I recommend for weddings (http://photography-on-the.net/forum/showthread.php?t=255604), probably closer to $10K than $3K. You need backup equipment (i've had two cameras fail on the same day), flashes, backup flashes, perhaps studio lighting, spare lenses (i've had one of those break too), etc.

I started slowly, bought a lot of gear as a hobby, then used it all as a professional. If I hadn't done that i'd have gone into debt. Many new businesses don't make a profit for 2-3 years AFAIK.

[Chip Andrews]

I think it probably depends on what type of photography you want to go into. I just started in May & all though business is slow I made some connections. I will be doing team & individuals for the Junior football league (150 kids) & Rec Soccer (200 kids). I think I am probably around $3,000 (40D, Sigma 70-200, Sigma 24-60, Nifty Fifty, 430ex, PS Elements 6) into it but with these 2 big shoots I can really start to make some headway. I used Yahoo for my website. Reasonably priced.

[stathunter]

That's not enough to get started, really. Take a look at the gear I recommend for weddings (http://photography-on-the.net/forum/showthread.php?t=255604), probably closer to $10K than $3K. You need backup equipment (i've had two cameras fail on the same day), flashes, backup flashes, perhaps studio lighting, spare lenses (i've had one of those break too), etc.

I started slowly, bought a lot of gear as a hobby, then used it all as a professional. If I hadn't done that i'd have gone into debt. Many new businesses don't make a profit for 2-3 years AFAIK.

I agree with Tim.

Personally I would never go into debt to get into the photography business. Acquire used equipment, use it, practice with it and generate revenue with it. Then take the earnings and purchase more or better equipment. Rent equipment in the meantime and slowly build up your revenue to where you can support the purchase. Work smart.

[ilantis]

In addition to gear, you are required to bring something that you cannot purchase in any store...experience. You can easily go out and buy 10k worth of equipment and watch it depreciate before your eyes while you struggle to learn how to really use it. I agree with tim as well...the collect-as-you-go method is the wisest approach unless you know that you are a natural prodigy with a camera and a charmer in a suit (business-side).

[Chris Dana]

I agree with Tim.

Personally I would never go into debt to get into the photography business. Acquire used equipment, use it, practice with it and generate revenue with it. Then take the earnings and purchase more or better equipment. Rent equipment in the meantime and slowly build up your revenue to where you can support the purchase. Work smart.

That's my plan. I know the woman I work with has a small business loan that she's paying off at the moment. I've got plenty of time before I go out on my own.

[Chip Andrews]

I agree with Tim.

Personally I would never go into debt to get into the photography business. Acquire used equipment, use it, practice with it and generate revenue with it. Then take the earnings and purchase more or better equipment. Rent equipment in the meantime and slowly build up your revenue to where you can support the purchase. Work smart.

Definately agree with purchasing used. I bought all 3 lenses in my sig right here on POTN. Got 3 really good deals on them. Sold my kit lens on eBay for a good price.

[Sledhed]

Of all the costs you listed above you forgot one of the main expenses which is Insurance. Don't shoot professionally without it, your just asking for trouble.

As for going into debt to get started, I didn't and I never would. I don't buy any piece of gear without having enough money to pay for it first.

[cdifoto]

Been there, done that, not a good idea IMHO unless you know you already have the work lined up to pay it all off in short order. When you take out a loan, you have the payments whether the work comes or not. As far as cost, mine's a very very basic kit and most of it was bought used - totals around $15,000.

[basroil]

tim and ilantis have the right ideas here. Do not expect to start your own photo business with just 3k. In fact, over the course of the first year alone you're looking at at least $50k, even up to $100k depending on other jobs you may have. Equipment for a decent photographer will run between 10k and 20k (including computer, camera, lenses, lights, possibly backdrops, home renovation, inspection, and legal work). If you shoot in your home or rented studio, insurance is an absolute must, location work insurance is a very good idea, though not mandatory. A small business is a small business, regardless of the field. You will need huge amounts to start with.

[tim]

I don't buy anything used for my business, support and warranty are invaluable. Lenses aren't much cheaper used, and you don't get a warranty. Warranties on bodies are also helpful. I buy bodies locally, that way if I need a loaner during a repair it's usually free.

[eigga]

I buy everything new for the same reason mentioned above. Also buy local ...its worth the small extra charge to have someone in town with inventory that will always take care of me. Building relationships like this invaluable.

I did not go into debt. I kept my day job and worked my tail off doing both. I dont see a big issue with going into debt however. Many people start that way and are successful...but some aren't. Thats a personal decision you and you family should make.

I started with a XT and 70-300 and built my way up. Other than weddings starting with $10,000 in gear isn't a necesity...just nice.

[Naturalist]

Going into debt to start any business is not good business practice.

[Vascilli]

Lots of photographers get started with the equipment they already have.

[MMD]

Controlled debt is not a bad thing in my opinion.

Don't put the horse before the cart though.

You wouldnt be asking the above question if you had of already had a reasonable business plan laid out. I'm not going to detail what a business plan is or how you should do one. What you should already know is your market, your investment sources, what costs you expect to absorb and what income you expect over a period of time. There will be a ton of research to do if you are planning on making this your main source of income.

The US government actually doesnt expect you to make any profit until year 3-4 of your new business. Thats not to say though, that your creditors feel the same way.

So, my advice is, design a business plan and set small goals. Achieve those goals and progress to bigger goals. Seeing your goals through will give you better long term perception and the ability to understand how much you need to spend to successfully meet your plan.

GL

[kcbrown]

Controlled debt is not a bad thing in my opinion.

Don't put the horse before the cart though.


Yep. Much better to put the cart before the horse. :-D

(Sorry, I couldn't resist. :-) )

[Chip Andrews]

I don't buy anything used for my business, support and warranty are invaluable. Lenses aren't much cheaper used, and you don't get a warranty. Warranties on bodies are also helpful. I buy bodies locally, that way if I need a loaner during a repair it's usually free.

I would love to buy everything new but with 3 kids & a mortgage that is not possible. Hopefully by next year I can replace a couple of my lens with some new Canon. I did have a problem with my Sigma 70-200 & I sent it in for repair. When I contacted Sigma wondering how much it was going to cost to fix it, they sent me an e-mail back saying it was already in the mail fixed. Still under warranty. Sometimes you get lucky buying used.

[FeXL]

When you take out a loan, you have the payments whether the work comes or not.

Depends on how you do it.

Rather than go to a lending institution, lend it to yourself. Our business borrowed the money from one of our household accounts (a secured line of credit against the house). We saw this as an advantage two ways. First, that initial year was pretty lean, getting clients, sales, capital purchases, operating costs. Wasn't always money to make a loan payment. As a matter of fact, we didn't start paying anything back until Q2 of the second year. Second, the business pays interest so the household account benefits, rather than the bank. The only disadvantage we could find is that your credit rating doesn't reflect the loan payments-wasn't a big issue for us as we pay for most of our purchases with a credit card that gets paid off monthly (=credit rating).

It made things tough at times, but when the household account was squeezed the business was always able to pony up something to help with groceries or whatever.

First year and a half we borrowed $38K. Since then, we've only had to borrow another $2K. All other capital purchases & operating costs have been managed without loans. Loan is about a third of what we started (4 years later). I haven't drawn a wage, it all goes back into loan payment, which finds its way into the household account, interest included. Win/win.

We bought new everything (except for an existing desktop computer) and haven't regretted a purchase. Being honest and objective about your requirements is your biggest asset.

1. You need to be a businessman first and a photographer second.
2. A solid business plan is essential (managed debt is good debt).
3. Passion is the key.

[BermyFunk]

very helpful thread, thanks OP

[Sports_Dude]

I started shooting pictures with my Digital Rebel (300D), f/2.8 70-200IS and 28-135mm IS along with PS Elements (all I already owned before officially starting my business last Fall). Sold enough pictures to buy a 40D and PS CS3 during the fall sports season. Sold more pictures this spring season to buy another 40D and 17-55IS. My suggestion is to start small and build as your business prospers.

[FlyingPhotog]

Speaking as someone who's been self-employed for over twenty years, I would strongly urge you to first make sure you can survive with zero income. Zip, zilch, nada...

I've made it a rule that I always keep enough liquid cash available to cover three months worth of full up expenses (as opposed to what I could actually squeek by on...) That way, I know that if I were to hit a real dry spell (and in my line of work, it can happen) I'm solid for three months but more realistically, if I need to tighten the belt, I could probably go 5 to 7 months with nothing coming in.

[Mark1]

I have started with no debt. But it really depends on what part of photo you are going into. A wedding photographer needs it all. And needs it now. So debt is not optional. I am doing commercial photo. I already have some of the equipment, and am buying the rest as I get jobs. I am not taking any money out of the business. Every dollar is going to new equipment. I may be lucky as the jobs I am doing do not need specialized equipment, but as I work my way into the clients it will be necessary in the future, but by then I will have what I need.

Just be smart about it. Don't buy stuff thinking " Ill need it at some point". Buy it only when you need it. Rent it if you have to (and bill it to the client). But it is possable to open shot with very little money actually invested.

[PhotosGuy]

Did I miss where the OP said just what he's is going to be shooting? Wouldn't that be nice to know? Personally I would never go into debt to get into the photography business. Acquire used equipment, use it, practice with it and generate revenue with it. Then take the earnings and purchase more or better equipment. Rent equipment in the meantime and slowly build up your revenue to where you can support the purchase. Work smart. I agree. My 300D & kit lens paid for the 20D, 28-70 f/2.8, & 70-200 f/2.8.
I still use the cheap strobes I bought decades ago: Simple "every-day-emergency" location lighting (http://photography-on-the.net/forum/showthread.php?t=66358)

[Mark1]

PhotosGuy is right. There is no point in upgrading if you dont have to. The XT could be your only body, and if it works for the kind of work you do then great! Dont up grade till it is the CAMERA that is holding you back. As he stated the kit lens paid the way for the good stuff. The same can happen to others. We all are working to the end that we can buy what we want on a whim.... "Oh that 800 5.6L would be fun to play with". But most of our realitys are not there yet.

[fubarhouse]

Well I needed something so I went into debt, but my business was only a business cause of legal reasons, and I had to have some way of getting into event photography, so there you have it. One year later I take up another debt 5 times as big, but I'll be taking it a bit more seriously this year :)

My business was always as a hobby, never really intended to make money from it, just for fun, but hey, play your cards right and you can make a killing from it.

[Patrick]

I'm about $10,000 in the hole.
I look at it like this though; I'm doing something I've always wanted to do since I was a kid and I'm happier than ever since doing this.
You can't put a price on that.

Hopefully I make a profit. I've still got my "day job" if I don't. Luckily, I set my own "day job" hours which leaves me all the time I need to do my "dream job"; Photographer. :D

[Bumgardnern]

I just started into the photo business this year. I already had a lot of stuff and most of it needed to be replaced by something better for one reason or another. Right now I have spent 12k on starting my business. I have gotten it all paid for and hopefully will start making some money. It is sort of depressing when you think how much it takes to get started in this, but don't let it get you down. It is not the job for everyone but some of us love it.

You also have to remember that you do not have a constant stream of income which is rough at times.

good luck

[Nick of Time]

Going into debt to start any business is not good business practice.

I'd rather call it an investment because it essentially is, even from an accounting point of view. You start off a business with equity which is usually the form of equipment / cash - that equity is your investment, and that investment is like a debt to the business.

[ilantis]

I'd rather call it an investment because it essentially is, even from an accounting point of view. You start off a business with equity which is usually the form of equipment / cash - that equity is your investment, and that investment is like a debt to the business.
This is very true. Many new businesses have to start "in debt", be it to the founder(s) or to investors or venture capitalists. You have an obligation to take that initial money and make it worth the risk for those that financed it.

Now going into debt on a business that you don't have a business plan for, realistic financial goals, or a field that you don't have sufficient preparation for is not good business practice. Sure there is always a good story about how a couple dudes started a business, knew nothing about what they were doing, and managed to build an empire out of pure passion and determination...but for every one of those stories there is a thousand more about those who starved under the same circumstances.

[sfaust]

MDD made the most important point. The business plan. If you have a business plan, your question about debt would be answered. Your business plan would have taken that into consideration, and the debt service would have been deemed acceptable and planned for, or discounted.

Starting with debt isn't a bad thing as long as your income will support servicing that debt. In fact, it can help you grow much faster, and is a very viable business strategy if your business plan is good, and successful in the end.

Ie, suppose you need $60K to startup the business (equipment, marketing, operating expenses, salary, legal, advertising, insurance, etc), and it took you 3 years to save up for it. You are sitting on your hands for three years saving. But if you took a loan, you could open your doors right away, and in 3 years be at the point that you are starting to turn a profit and the business is growing.

Either way you are taking a huge risk with $60K, but one way gets you off the ground sooner and up and running faster. You could save for 3 years and find your competition has already taken up and secured the slice of the market you intended to go after.

I would caution anyone before borrowing funds to start a business. It is a significant risk, and the total loss of those funds, and all the time and effort into it is real. If you are going to borrow, or make a sizable investment from your savings, make sure you do it absolutely right. Work with professionals such as accountants, business advisors, marketing and advertising consultants, business planners, SBA, or other available resources. The quickest way to fail is to ignore that advice. I think the statistics show that 9 out of 10 fail due to lack of planning and inadequate funding.

If you shoot in your home or rented studio, insurance is an absolute must, location work insurance is a very good idea, though not mandatory.

I find insurance on location far more important than insurance for your own studio. I work on location in factories, offices, manufacturing facilities, museums, etc. Plenty of liability exposure at every turn. Ie, shut down a factory for a day due to an accident on your part and you'll find out the hard way what their daily operating and profit losses are. The value of insurance on location will be evident. For example, accidently setting off the sprinkler system in an office setting would be in the hundreds of thousands of dollars. If you can afford to assume that risk yourself, you wouldn't be asking what you need financially to start up the business ;)

[basroil]

I find insurance on location far more important than insurance for your own studio. I work on location in factories, offices, manufacturing facilities, museums, etc. Plenty of liability exposure at every turn. Ie, shut down a factory for a day due to an accident on your part and you'll find out the hard way what their daily operating and profit losses are. The value of insurance on location will be evident. For example, accidently setting off the sprinkler system in an office setting would be in the hundreds of thousands of dollars. If you can afford to assume that risk yourself, you wouldn't be asking what you need financially to start up the business ;)

Quite true, I was thinking more of outdoor portraits and smaller things, since OP doesn't seem like the commercial photography type (or else he would have had a better business plan).;)

But yea, OP, before you even consider the business you do need to know your target audience before you can do anything. If you are targeting sports, a sports setup is needed, for portraits, a portrait setup is needed, and each has a minimum requirement vastly different from the other.

[airfrogusmc]

Debt and to much bad debt can kill a new business. Be careful because I have seen several friends fail because of it. If you start with allot of debt and you don't have a client base or a large amount of $$$ put aside you're setting yourself up for failure. Plan on a couple of years of not making any money. Remember the payments are do every month whether you've billed enough to cover or not. My advise move slow and spend within your means.

[sfaust]

Quite true, I was thinking more of outdoor portraits and smaller things, since OP doesn't ....;)

Even in those situations, things happen. Someone trips over a lightstand, strobe cable, extension cord, etc. $450K in medical and lost wages. Your lightstand falls over and the strobe explodes, lights the muslin on fire, which catches the drapes, then the house, etc. $800K please!

Things just happen, and they are all unexpected. And consider that if you are traveling to a client, and have an accident, you are using your personal car for business purposes. Your insurance is void should something happen. It doesn't take long to rack up a few hundred thousand if someone hurts their back and is having problems working because you t-boned them.

Regardless of how you operate, as soon as you call yourself a business, you put all your personal assets up for grabs if something happens. And we all know, if you aren't insured, thats when its going to happen ;)

Its really not worth the risk if you can migitate it for $20 a month, is it?

[airfrogusmc]

Most of the places I work in require liability insurance and I wouldn't get the jobs there if I didn't have it but I would have it anyway as a protection. You spend years building your business and it can all be lost in an instant. To big a risk for me.