How to start a small business?

How to start a small photography business?

• My mother and film and take pictures of weddings and sweet-15's in our town. We do it more as a hobby, but now we want to start a real business. We have our pro camcorder and camera, but we would like to upgrade to newer cameras once we know what to do to start this business. Both of us are unemployed, and I pay taxes because I was given more income than what I should have last year. Reading all the IRS selfemployed information just gave me a headache, and I just want basic information before I start moving a finger and end up wasting money for nothing. I know I need an acountant, but before I hire one, I want to know what to expect before he screws me over too :) I also went to get information at the office of comptroller to get a sales tax permit, but they dont know anything there. KEY: we want to pay taxes and do our income tax each year. My questions are: Should I file the business as a sole proprietor or as a partner? If as sole proprietor, who should be the owner, my mother who is unemployed and receives income tax, or me that is currently paying the IRS, and is also unemployed? Could one of us be the "owner" and the other an "employee"? and if so, what is the benefit, if any? How do I start reporting taxes to the IRS, now or until we do the income tax? and what option should i chose there too, self employed, or partnership? whats the difference when paying taxes and doing the income tax when choosing either option? This is going to start as a homebased business, I have what I need, but I want to upgrade to better modern equiptment, so I want to know If I really need to open a business bank account, or just use my regular checking account to buy a new computer, camcorder, lighting equiptment, camera, stands, etc in order to file those expenses to the IRS. Since its a homebased business for now, do I need to get insurance, lawyer, bc I am not taking pictures inside my home and there is way they can trip over cables and sue me. My home is just for customers to come and see my work. Later on if this goes well, what do I need to do in order to get an office/studio? I have a name for my homebased business, do I also need to go register my "business" name besides the sales tax permit? I have made my own contracts where it explains in detail how I work, how to pay, and that customer satisfaction is not guaranteed, because there are some crazy people that want to screw you to get everything free (my dad was a photographer and had a permit, but was not paying irs, etc... he had a customer complain about looking too FAT on the picture. How can you not look fat on a picture if you are fat?? silly, but that is why I put "satiscfaction ot guaranteed") QUESTION IS, is ok to do my own contracts, or do I have to go trough some pro to make my contracts? or do i have to go get my contracts notarized? to have my work copyrighted, do I really need to pay extra? the pictures I print have a copyright symbol from the kodak printing office where I go, but I dont want customers copying my pictures and video. (they do what they want anyway) but if i do need to pay in order to have copyright, is it worth it and how? at times, we may need assistance of others to help us with taking pictures, editing, etc and obviously I would need to pay them. Do I claim those expenses too, or is that too much of a hastle bc i would need to file other type of documentation to the IRS? I was told I need to pay the IRS 16.50% of my profit? my 8.25% and taxes charged to the customer (I hate the IRS, they are $$ hungry) How to i file my profit.. this is my understanding.. If i charge 1000.00 for a photo and video package, but I need to spend 400 in priting, frames, etc, do I just claim 600.00 in profit? I also print my pictures from mexico, which is cheaper, and the quality GREAT. way better than printing pictures here in US. I was told I also had to pay some fee in order to cross the bridge with my merchandise (pictures). is that true, and do I also claim that as an expense? Do I also need to register my business name, or not until I have an office? The sales tax permit office doesnt explain anything, allthey want is $$$$$$$ What else should I know? I know the first 3-6 months are going to be like hell, and that is the reason Y i dont want to rent an office/studio until I see that it is worth it :) I know these may be too many questions and not all may be answered, but I just want to get an idea of what I am getting myself into. I dont want to be getting the run around bc I have gone to ask questions to the city offices, and they dont know anything. I dont want to pay some accountant or whatever and then back out because this may be harder than I thought. I have researched online, trough the IRS page and other sites, but Its all confusing and I want real easy answers so I can know whether to open this business or just back out. Thanks

• Answer:

  You desperately need to find an accountant and trust him/her. Don't worry so much about all the stuff that is occupying your mind. An accountant can advise you as to the best way to structure your company with your mom. An accountant will also help you set up your book keeping. Every state is different so just find a local accountant and pay a consultation fee for an hour or two. It will be money well spent. You need to worry about making a profit before you worry about taxes. I would need to sit with you for a couple of hours to answer the majority of your questions about business. You can go to the PP of A site and get some help in many areas. http://www.ppa.com/ I shoot commercially, not weddings, so may things are different, especially contracts. They probably have contracts you can use if you join. Your pictures are copyrighted the second you create them. You are completely protected. If you want further protection you can register your copyrights with the Library of Congress. This costs money but you only need to to do it every 90 days in order to have the protection so you can save up and do a collection of pictures every 90 days. When you register your copyrights you can collect attorney's fees and punitive damages in the case of a copyright violation. Otherwise an attorney needs to take the case on contingency. I would not worry about this to start because if there is a violation, you are dealing with the general public and the violation would result in minimal financial gain. If you were exposing your pictures for commercial use then the violations can get pretty expensive for companies. All you need to do is put a notice on the shots so that labs won't copy the shots. You are protected regardless. Please find an accountant and have a little session about your plans. You are making a mountain out of molehill. Relax, spend your time finding work, taking good pictures and making profit. Good luck