In the last few years, I've spoken at conferences to several thousand photographers.  I've taught workshops for a few hundred, have done coaching for a few dozen, and have had personal - and email - conversations with a few hundred more.  I don't say any of that because I want you to think I'm cool.  Seriously - my kids already think I'm cool, and I decided a while ago that that would just have to be good enough.


The reason I tell you that is because I've had some experience talking to photographers, and listening to them tell me about the mistakes they've made.  I've worked with them to change their game plan, and have walked along side photographers as they build more profitable, and sustainable businesses.  As a result, I want to share with you, the 7 mistakes I hear over, and over again - in the hopes that you'll be able to avoid the frustration and pain of those who have walked there before you.

1. Not organizing their business as an LLC.

You are you.  You are a person, you have a family, you own assets, you have a savings account, and you probably have plans for your life.  Maybe you have a spouse.  Maybe you have kids.  Maybe you are saving up for your dream house - or maybe you've already bought it.  Bottom line, you've been walking on this earth for some period of time, and you've built a life.

On the other hand, your business is your business.  Your business has income, and expenses, and clients, and products, and assets, and obligations.  All those things are part of your business, and you are not your business. Unless of course you're a sole proprietor, in which case, your business is you.  

That means, that if something goes wrong in your business, it's gone wrong in that life you've built, because your business is you.  It means that if someone sues your business, and wins a judgement, you've just put all of that life you've built at risk.  It means that all of your personal assets (money, home, etc), are at risk. 

Fortunately, it's easy to separate your business from you by forming an LLC.  State laws created the ability to form LLC's a while back because there are many business situations where forming a corporation doesn't really make sense, but where it does make sense to have more liability protection than a Sole Proprietor.  You still have the option of being taxed as a Sole Proprietor, or you can choose to be taxed as an S-Corp, giving you the best of both worlds. 

(by the way, this is a pretty good reason to have an attorney that works with small businesses)

2. Not collecting/remitting sales taxes

If you want to screw up your business even faster than not organizing as an LLC, keep pretending like sales tax laws don't apply to you.  Sure, the laws are different in every state, and it's entirely possible that in your state, you don't actually have to collect sales tax.  If that's the case - lucky you! (though I'd be sure that it's really the case, and not just something some other photographer told me). 

You are legally obligated to collect sales tax on products and services that are considered Tangible Personal Property.  In some states (like Michigan), the act of providing a service that constitutes part of the finished product (taking a photograph, for example), is also taxed.  Some states require sales tax on digital files, where some states exempt photography services when only a digital file is delivered electronically (as opposed to on a physical media like a disc).  

Sound confusing?  Sure it is.  Unfortunately, ignorance is no defense to failure to collect and remit sales tax.  The reality is, you are obligated to understand, and comply with the laws of the states you operate in - and if you don't, you are the one that will end up being obligated to pay the tax + interest + penalties. 

(by the way, this is a good reason to have a relationship with a CPA or accountant).

3. Not tracking their income and expenses

Many photographers began their "business" as a hobby.  The problem is, once it's a business, it's time to start acting like a business.  Unfortunately, many photographers run into aspects of their business that they don't understand, or find unpleasant, so they simply don't do them.  Bookkeeping is one of the most common examples. 

Here's the thing, if you're measuring your business only on the quality of your photos, you're basically treating it like a hobby.  Don't get me wrong, your photos are your "product," and the quality of your photos is extremely important.  But don't overlook the fact that in order to build a business, you have to start measuring things like profit.  If you're not properly tracking how much money comes in (and why), and how much money you spend (and why), you'll never be able to measure the success of your business - never mind be able to accurately do your taxes.

4. Buying too much gear

As a professional photographer, professional gear is important.  It's a tool of your craft, and it's what helps you provide a professional service to your customers.  At the same time, a lot of photographers are spending far too much money on gear that doesn't help them grow their business in any way.

Based on a survey that I've done twice now (with over 400 responses each time), photographers spend on average $4,300 a year on new gear, in their first 3 years.  Here's the problem: many of them are buying them on a credit card that charges them interest.  And since we know that 80% of business don't even last past 3 years, you have a lot of photographers that have spent as much as $12,000 on new gear, paid for with interest, who aren't even in business anymore.

Bottom line, don't buy gear until you can afford it.  Instead, consider renting just what you need to do your job, and saving cash to buy gear as you grow.   

5. Trying to be everything to everyone

I know that as you are building your business, it's hard to say no to business.  It's hard to turn away a potentially paying customer.  There's a constant temptation to open your doors and let in any time of photography work that will pay the bills.  Resist that temptation.

I'm not advocating you not pay your bills.  In fact, I'm a big advocate of making money.  But I'm an even bigger advocate of doing it in a way that's sustainable, and being all things photography, to all people, isn't sustainable.  Instead, focus your business on your ideal client.  Figure out the type of photography that you specialize in, and figure out the types of clients to whom you want to market.   Once you've done that, say no to everything else.  Every time you say "yes" to the WRONG type of client, you end up having to say "no" somewhere down the road.

Back to the "paying your bills," thing - my suggestion is that if you're still at a point where you're photography business isn't paying your bills, there's nothing wrong with having a job that will pay your mortgage.  There's no shame in being able to provide for yourself and your family - especially for a short time as you build your business.  There's no pride in going broke.

6. Not charging what they're worth.

Just like working with the wrong types of clients can kill your business long term, failing to charge what you're worth is the quickest way to let your business ruin your life.  Photographers often base their pricing based on fear and ignorance.  Ignorance of the expenses that really go into running a photography business (see #3), and a fear of rejection - that no one will hire them because they're "too expensive."  

Here's the thing - every time you work for less than what you're worth, you're basically writing that client a check, for the privilege of photographing them.  I don't know how much you like your clients, but I'm guessing that you don't have many (if any), that you like enough that you're willing to pay for the privilege of showing up to shoot their wedding. 

7. Trying to do it all.

So many photographers burn out because they find themselves trying to wear dozens of different hats.  You're the photographers, the image processor, the marketing director, the CFO, the director of operations, the customer service director, and the owner.  At any given time, a photographer is working in 3 or 4 different jobs, but feeling like they are failing at all of them. Here's the thing - and I've said it a bunch of times - ONLY DO WHAT ONLY YOU CAN DO.  It will always be less painful, and more profitable, to pay someone else to do the rest.  

Some things are easy to let go of - like bookkeeping, for example.  Once you find a good bookkeeper, it's easy to let them handle that aspect of your business, since you probably hate the idea of dealing with it anyway.  On the other hand, sometimes you have to swallow your pride and realize that doing things like editing your photos, isn't a profitable (or sustainable) use of your time.  Instead, find trusted partners that you can outsource as much as you possibly can.

8. Not having adequate insurance

Insurance definitely isn't sexy, but it's easily one of the most important things for your business.  All it takes is one thing going bad, and your business is toast.  I think a lot of photographers find insurance coverage to be confusing and intimidating.  It's really not that complicated, but the short answer is that you should definitely talk with your insurance agent about the best types of policies and protection for your business.

The bottom line is that there are three types of coverage every photography business should have:

Liability Insurance is designed to do basically one thing - protect you in the event of a lawsuit or other claim. It protects your business by covering things like attorney's fees, court costs, and the cost of a judgement or settlement arising from accidents, injury or negligence. Liability coverage isn't for when something goes wrong and suddenly you've lost all the images from a wedding. We'll get to that in a few minutes.

The most common general liability policies have coverage of around $1 million per incident/$2 million lifetime, and this is what is usually required by venues who request to be named on your policy. 

Property Coverage for your gear, equipment, etc. Usually, you're looking for an Inland Marine policy to cover camera and photographic equipment. Don't think that you're covered just because you have homeowners or renters insurance.

Coverage for property insurance is usually based on a dollar value of the equipment covered. This can range anywhere from $1.50 - $4.00 per $100 covered, depending on the deductible, where you live, and other variables. One thing to be sure of, is that you have replacement value - NOT fair market value, or cash value.

Errors & Omissions covers you when things go bad.  Even when they aren't your fault, sometimes bad things happen. Sometimes hard drives fail. Sometimes you lose a compact flash card on your way home. Sometimes cameras fail, or equipment fails and you miss important shots.

If you are a member of PPA, you are able to take advantage of their Indemnity Trust, which - while not insurance - is similar in practice to E&O coverage. Even if you're a member of PPA, and are covered by the trust, it's still worth exploring with your insurance agent the types of Professional Liability coverage that would be appropriate for your business.

What about you?  What do you think are some of the biggest mistakes that you, or photographers in general, make?  Leave a comment below with your thoughts!