I went to the local SBA and got a ton of great info. If they have a business "start up" class, take it.
Regarding name for your business. In today's world I would start from finding nice and short domain name for your future web site, reserve it lets say for 5 years, and based on this I would work on actual business name.
As for taxes etc., make money first and then worry. Good luck in your venture.
i have a name selected; i have contacted Mn SBA and i checking on county and state licenses today. i don't need to buy equipment...i have most of what i want already as a hobbyist. my wife simply wants me to start showing a profit for the gear purchases. i have requested information from University of St. Thomas here, which is our entrepreneurial leadership spot and have been to IRS and Mn Dpt of Commerce websites. i guess i am on the right track. had not thought of the website though. that is why i wanted to put the collective wisdom of APUG to this task.
i once belonged to an investment group so already familiar with setting up separate accounts, etc and simple accounting principles.
any special pitfalls you might think of. i am shooting first paid wedding in just a couple of weeks and have been asked to shoot PJ wedding in August and request for portraits are starting to come in.
To create one's own world in any of the arts takes courage.
PROFIT!!! LOL Whats that???
I have been doing over 20 years and we might break even in another 5 years!
You are in a sticky situation because you are converting a hobby into a business. If you have not run a small business before, get help in setting it up and some management advice. Your accountant should be able to help you set it up. You will need to decide several thing from the outset:
2. Form of business enterprise. You can start a sole proprietorship (the easiest) or corporation. Probably from what you have described there is little need for the corporation in the beginning. You can always change to one later. If you elect to go with a corporation, there are generally higher fees to start and annual requirements for minutes etc.--many of which can be minimized by becoming a LLC. Taxation--if a corporation, do you want it to stand alone or to be taxed as ordinary income, in which case you will want to become a Sub-s corporation.
3. Set up. You will need to designate which of your personal assets (cameras, film, darkroom set up etc.) you are contributing to the business. These will be the initial assets of the business. Do delivery memos showing your contibution and value the assets reasonably. The accountant will help set up a depreciation schedule. The sticky part is that you will be limited in depreciation in the early years because you are converting a hobby to a business. Generally, you are only allowed to deduct an amount up to your income when converting from a hobby, until it is a going concern.
5. Record keeping. Keep good records of film purchases (an expense) and processing fees. Your accountant will help you set up a chart of accounts for record keeping.
You should contact the small business Admin if you haven't run a business before. They used to have a program called SCORE, Service Core of Retired Executives, which matches new business owners with experienced retirees for advice.
The above sounds like a lot, but most of it can taken care of with a visit to a good accountant or attorney.
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Dave you crack me up..* lots of wisdom here.* I do the buisness for the love of it rather than the profit.
Originally Posted by Satinsnow
I've been "in business" now for three years and welcome an IRS audit. Maybe they'll catch a deduction I missed!
If you have no bad history with them, and all is up front, don't worry it. I'm going to Maui for my 20th, and will deduct 50% of most everything because it's a "working vacation". You gotta love this system!
If you want to be really busy call it something like
Richard Avedon Photography
I don't think he's using it any more.
[SIZE=1]Lighten up it's a joke[/SIZE]
I couldn't think of anything witty to say so I left this blank.
Be very careful with your insurance. A business, even a hobby business, puts you in a different catagory. Check with your agent about business specific insurance for your gear, transportation and liability. Don't rely on homeowners any longer as most companies will not cover your business... and may even find an 'out' for claims at home due to the home office use.
"any special pitfalls you might think of"
Although Dave's profit? comment was, I'm sure, meant to be humorous, I think he hit the nail square on its head. Actually making money at it is the major pitfall, and failing to make a profit is the bottomless hole, tax-wise, right behind it. Remember, in addition to the on-going materials expenses, you'll be "contributing" equipment to the business for its sole use, thus creating an additional amortization expense in accordance with tax regs. As such, generating sufficient income to offset both the job-specific materials expenses and the built-in business expenses can be a challenge - one that will take time away from your family. Thus, both you and your wife need to recognize and accept the consequences of starting the business venture, along with the consequences of shutting it down later.
I'd really suggest working through the process on paper first, just to make sure of that factor.
[COLOR=SlateGray]"You can't depend on your eyes if your imagination is out of focus." -Mark Twain[/COLOR]
Rio Rancho, NM