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miércoles, 18 de julio de 2012

The Certain Things in Life

My blogging is lagging like a parent without sleep. Still it?s amazing how much time shirking my writing frees up ? more on that later.

April 18th, also known as IRS dooms day is fast approaching. On a twist on Benjamin Franklin?s famous quote, only two things in life are certain: the baby pooping right after a diaper change and taxes. As much fun as it is to discuss poop, we?re going to talk about taxes or more specifically what it takes to run a photography business (which I happen to know because I just finished my taxes). In the process, we?ll debunk a few myths:

  1. Shooting digital is free (and kids are cheap).
  2. There?s no sales tax (and it?s actually much worse than that)
  3. Photographer?s charge too much (and too little).

We'll have some fun along the way, but I'm also hoping this is instructive to the growing number of parents who have an interest in professional photography or even as a way of keeping accountable to my clients. The astute observer will note the business is run on a cash basis (kind of like the Mafia, only legit) which means there are some fluctuations for major capital investments that are not amortized across five years, but the effect tends to average out.


Digital is Free. Ironically my biggest expense is printing. Since my business is run on a cash basis, this does not include the $2000 9 color, wide-gamut printer purchased in 2009 used to produce magnificent art prints but does include the cost of ink that the printer drinks like a baby to formula.

Despite the name, Phat Baby Photography runs a pretty lean operation. My second Canon 5D is used (obtained at about half retail) and came in handy when the first broke during a shoot. My lenses are mostly professional grade, because they take nicer photos, work in low light, resist baby drool and just last longer (my only broken lens is a 35mm consumer lens). So about $1000 a year goes to upgrading or maintaining $10K+ worth of camera equipment. Put another way, it's like I'm replacing my set of equipment every 10 years which makes sense if you think about the shutter life of your average camera body. A small budget goes to renting equipment that I use infrequently (primarily for weddings or corporate work).

Computer equipment also needs to be updated, though thankfully less frequently. One annoying trend is the growing number of megapixels on camera which requires more hardware to process it all and more disk space to store it all. A good 12 MB camera (like my trusty 5D original) can be blown up to 20"x30" with good results so why Canon is going past the 20MB mark in more and more of its cameras is beyond me. My Mac Pro churns through my photo shoots quite effectively but I upgrade all my software licenses as needed. Photoshop CS3 is two generations old but does what I need, while a $100 Lightroom 3 upgrade was a no brainer even for a thick headed photographer like myself. My personal photos are archived on three drives (two in house and one in a bank vault) and I treat my client photos with the same care. That means purchasing an endless stream of hard drives to store everything as well as paying for offsite storage in the local Fort Knox and not disclosing the location to my children.

Sales Tax, Income Tax and Business Licenses Oh My! The cost of liability insurance required at venues, getting photography permits (yes, Stanford University, for example, requires permission), business licenses and paying, gulp, sales tax is a real cost. Sales tax is a negotiation point at more than one wedding and in some cases threats to go to another photographer ensue (heck, we did that with my wedding photographer). My blended federal tax rate is about 30%, California is almost 10% and ~10% goes to charity about half of every dollar in profit goes to someone else. Sales tax is collected as a percent of revenue, so account for that how you will but I think of it as a pass through expense (i.e. it passes through me like? oh I said I wouldn?t talk about poop). Fortunately I max out my self- employment taxes (Social Security, SDI and Medicare) from my day job otherwise that?d be another 15.30%. Give to Caesar what is Caesar?s, but Caesar is taking just about everything except my first born.

Photographers Charge Too Much and Too Little. So how much did Phat Baby Photography make last year? $20K in gross receipts minus $10K in expenses means a take home of about $5000 after taxes and giving. On average I spend ~10 hours per week on photography and the business so net net, I'm making about $10 per hour - more than a burger flipper and about half what the Costco cashier and the latter has benefits. The actual amount is a little lower for a variety of reasons, but the thought is depressing so this mathematical exercise ends here.

But it's not about the money right? In an ideal world maybe, but the reality of raising children in California is fundamentally expensive. Aidan loves ice hockey and eats like a dinosaur which is about as bad as it can get. Well a friend told me about his daughter and her love of horses, so maybe it could get worse. Zoe has an eye for designer shoes and clothes. Truth be told, I worry for her future husband. So unless I?m the government, I can?t run endless deficits and print money (even with my expensive printer).

More importantly, since my weeks have few leisure hours and sleep is a scarce commodity, every hour of photography is an hour I'm not with my family. Other options of saving time are largely an act of diminishing returns: tying\untying my shoes in the car bought me a minute or two each day, eating at my desk saves some time (and money), cutting my hair at home saves a 20 minute round trip to the barber but I'm open to reader's suggestions.

So it's with great joy that I find myself slowly unwinding the business. I say joy because even though I'd love to spend more time photographing other children, I instead get more time to play with my own. I'm still open for business (especially for existing clients), but I think you'll find me blogging less, doing a little less marketing and otherwise enjoying life (like experiencing ice hockey with Aidan). Besides, I can?t shut down the business right away, otherwise I?d have to recapture (i.e. pay back to the IRS) my business deductions on my taxes :)

Baby Photography Notes: 1/200 at ISO 400... just kidding, I used Keynote for the graph.

Source: http://feedproxy.google.com/~r/PhatPhotographer/~3/XWG3xUdHzOg/certain-things-in-life.html

Shea Delilah Belle Elizabeth Emerson Rose Katie

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