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Finances: How Not to Be a Moron

Few events will make you completely overhaul the way you look at your finances like a bankruptcy. When I returned from three weeks in Ethiopia in 2006, I walked into my trustee’s office and signed away my debt. I hadn’t intended it to go that way and had tried every other option available to me. After credit counseling, I tried to do a credit proposal, a legitimate means of asking your creditors to take pennies on the dollar on a strict repayment schedule, but my self-employed status made it easier for them to write off my debt as a loss and simply send me straight to bankruptcy. I recommend you do everything you can to avoid getting to this place. Bankruptcy isn’t the end of the world, though it makes things complicated; what makes it so undesirable is the road you need to take to get there. Generally, we start businesses to build something, to make a living—not to drive our finances and all we’ve worked for into the ground. Arriving at the point of bankruptcy usually means taking a stressful road full of bad choices and circumstances—many of them avoidable.

Going bankrupt was a bit of a dehumanizing process at first, but I was forced through a reprogramming process in regard to money. And when I made the transition that would allow me to pursue my photography full time, it put me in the position I should have been in the first place—debt free and with a solid plan informed by some actual financial wisdom. Since then I’ve been amassing a list of ideas for an imaginary course called How Not to Be a Moron with Your Money. This is the syllabus.

Go In with Capital

If you’re looking at this as a transition you will make—and not something you’re already up to your neck in—then the single best financial advice I can give you is to make the transition with the most amount of capital you can possibly arrange. Save a little longer if necessary, but go in with more money than you think you need. Sit down after you’ve read the rest of the financial stuff here, and figure out what you really need for a year in business—bearing in mind that launching a business can be exponentially more expensive than simply maintaining one. Depending on the kind of market you decide to work in, you could have marketing costs, setup costs, accountant costs, new gear, new office equipment, and a new facility lease. Not to mention the possibility of employees.

Go In Lean and Trim

If it makes more sense, rent instead of buy. Talk to your accountant and consider leasing as an option because it lowers your initial cash outlay and can bring tax advantages that purchases can’t. But above all, make sure you’ve got money in your pocket. Going into a new business with an unproven track record and financing it with credit is nothing short of gambling. One of the best ways to keep your overhead low, and your nights restful, is to avoid debt. A line of credit can be a helpful thing at points, but even then I suggest you talk to your accountant about it. The world of money is complex, and a good financial advisor is key. If you don’t have a good advisor, find one. Consider also finding a financial or business mentor.

Keep Your Overhead Low

One of the effects of financing your business with a credit card is the gradual increase in your overhead. The income you need to earn to make the same amount of profit increases monthly. It sneaks up on you. Credit has its uses, but its abuses are much more common; in effect, you are borrowing against future income, which is neither predictable nor guaranteed. Furthermore, borrowing generally guarantees you’ll always be borrowing, never giving you a chance to get ahead. On the other hand, lower overhead means you need to bring in less income to make ends meet, and you have the freedom to pursue travel opportunities or that pro bono gig in Bali without being tied to higher monthly obligations.

Credit is not the only way to drive your overhead up. Leasing a space that is more than you need, or at the top end of what you can afford, means you have less room to wiggle when the economy gets tough or your market dries up. If you specialize in shooting actors’ headshots and the Screen Writers Guild goes on strike, your revenue could drop significantly. But overhead never does. You still have credit to service, employees to pay, and a studio to pay for. Weathering that can dry you out; keeping your overhead as low as you can keeps your belt tight, and it means you can move faster, change directions quicker, and compensate for the ups and downs of business with fewer casualties.

So how do you keep the overhead low? Begin by intelligently assessing your credit spending, and don’t carry a balance. If you must finance with credit, do it with low-interest credit, not a credit card. Then look at your monthly recurring costs. Do you really need a landline, or would a cell phone with a good package be smarter? Do you need that large studio? If so, do you need it all the time? Could you rent it out one or two days a week and allow that rental fee to take a chip out of your overhead? Are your employees making you money? I’m not arguing that you should fire someone. In fact, hiring one more employee is the better decision if you pay him $2,000 a month and he makes you $5,000; just know how the numbers add up. Then take a look at all the gear you own and get rid of the liabilities—consider selling the stuff that doesn’t make money and free up that storage space. Selling a piece of gear that you don’t use so you’ve got the funds to buy gear you will use and make money with is trading a liability for an asset, and is a smart move.

Assets and Liabilities

Simply put, an asset is something that makes you money, and a liability is something that costs you money. That fancy macro lens you bought just to play with is a liability to your business. If one day you make money on it—more money than you paid for it—then it becomes an asset. For now, it is not. If an extra computer means you can grind through your digital workflow faster and therefore take more work, then it’s an asset if and when it has paid for itself.

Too many photographers—and this is a hazard of the craft and the types of people drawn to it—get lured into believing that the more gear we have, and the more expensive it is, the more professional we are. Unless that sexy expensive gear pays for itself and makes money for you, it is a liability. I don’t think I can be clearer about this. Decide whether you want a tightly run business with money in the bank, or gear that will make you feel more professional but costs you money and keeps you from spending money on projects that truly matter.

Remember that most technology will either wear down or obsolesce within a predictable timeframe. I expect to get three years of use from my computers. More is great, but unlikely. So if my MacBook costs me, for example, $1,500 and lasts three years, it costs me—and must make more than—$500 per year. Does it do that? Absolutely. If I bought a $2,000 tilt/shift lens, it’s unlikely that lens would pay for itself, let alone make me money, no matter how long I owned it. So what do you do when you want gear but can’t truly afford it? Rent it. More convenient in some places than others, the ability to rent a lens for a project and charge that cost to the client means you can create the work you need to with the tools you require but without making purchases that will only become liabilities.

Stay Debt Free

This one bears repeating. There is smart debt, even necessary debt, and there is crippling debt. Usually they look the same at the beginning when you desperately want that new—shiny!—laptop or lens. One of the best ways to stay out of credit debt is to avoid impulse purchases. Simply not making unplanned purchases is a good way to keep the emotional aspect of a purchase at bay. Planned purchases can be thought through intelligently and paid for with savings. Unplanned purchases are often the ones that go on the card. Don’t do it. If you see something you “just can’t live without,” there’s a better chance than not that if you leave it for a month, you’ll realize you don’t need it after all. If you really did need it, you probably would have felt that need before you saw it in the catalog and your impulse kicked in. There will be times when your impulse puts up a fight. “If I don’t buy it now, I’ll have to spend more money on it later,” you say. Maybe. But again, if you’re in this position you probably weren’t planning on this purchase in the first place.

Plan your major purchases ahead of time. I generally sit down at the beginning of the year, at the same time I’m making plans about my marketing and my business development. I look at my need/desire for new technology, and I plan it out. Do I need a new lens this year? What about a new camera body? New laptop? New hard drives? Of course, some purchases creep up on you; these things happen. How can you possibly plan for unexpected purchases? Easy: Plan for the reality that the unexpected will happen and save for it.

Prepare for Contingencies

You can’t plan for your hard drives to fail, but you can plan for contingencies to occur. You don’t know which piece of gear will break or die an early, just-out-of-warranty death, but you do know something will. Consider putting 5 to 10 percent of your gross receipts into a savings account for contingencies. Not for urges or to buy that new Leica you just have to have, but for actual emergencies and unplanned necessary expenses.

Unplanned contingencies lead to unplanned spending, and unless the money’s there that expense goes on the credit card or the line of credit and then these things just spiral higher and higher. You know it’s going to happen, so save for it.

Prepare for Taxes

Speaking of the unavoidable, tax time comes around at the same time—or times—every year. It’s not a surprise, and if your accountant is doing books regularly the amount you need to pay shouldn’t be some mystical number derived by throwing rocks at a circle of candles while standing on your head. Ask your accountant how much you should be tucking away and then do it. Create an account that is for taxes only and be faithful with it. It’s boring. It’s not glamorous. That money could buy a nice new lens. Don’t do it. Save for the tax-man. You’re running a business, and this is just one of those realities you need to live with; pretending it won’t come around again this year won’t make it so. In fact, the less you acknowledge and plan for these realities, the more stressful things will be when the time finally rolls around. Stress is a terrible companion to creative work, so do your emotional and creative life a favor and put money away faithfully each time money comes in. Make it a non-negotiable.

Save for You

I’m guessing you don’t want to work 365 days a year for the rest of your life. There will be vacations and the needs of your children and family, and the inevitable point at which you can’t, or choose not to, work anymore. Saving for these eventualities is a choice you make based on your needs. It took me years to get around to this, primarily because I was servicing a huge debt; putting money aside when I was paying 18 percent interest on credit debt just didn’t seem like the best place to put my money. I now put a set amount of money each month into a registered savings account. It’s withdrawn automatically, and with my permission that amount is increased by a certain percent each year. It’s not much, but it adds up, it isn’t something I need to make a decision about each month, and it keeps my taxes a little lower at the end of the year.

Price Your Work Wisely

So far we’ve talked about spending and saving, but not about earning; talk about putting the cart before the horse. This one’s impossible to write about with specific numbers—there are so many markets representing so many demographics and areas, and economies rise and fall. So let me skirt the numbers and talk about a couple principles.

Creative people hate talking about money with clients. I think there’s a feeling among creatives that talking about money borders on prostitution and sullies the dress of the muse in whose influence we work. But even muses need to eat, and taking on a false nobility on issues of money will make you broke. So I’m going to be blunt. If you intend to make a living from your photography, you need to embrace your multiple personalities; you are both a photographer and a business manager. When you are shooting, you are a photographer. When you are discussing business, you are a business person. No exceptions.

The first step is knowing your cost of doing business (CDB). There are online tools for calculating this, but you should probably first understand the principle. Take all your annual expenditures, including the salary you pay yourself, your savings for retirement, taxes, and contingencies, and add them up. That’s how much it costs you to do business. If you do it right, the number should shock you. This is your cost of doing business, and it’s the number you need to determine before you begin to know how to price your work.

Now that you have your annual CDB, step back and look at your calendar. How many gigs can you realistically take? I couldn’t tell you what this number should be, but if it’s international assignment work, as it is for me, your spouse might be able to. Divide the big number by the small number and you’ve got a pretty good idea of what you must charge. This number can be offset by other income-generating activities. Selling prints or other activities that do not require your presence is a good way to pull down the number you need to charge to stay afloat, and we’ll discuss that in the section “Dig More Streams,” later in this chapter. You might also consider that some markets can subsidize others; clients with big pockets and big contracts can pay you more, while charities and small clients can pay you less. If you do the math right they can balance out, allowing you to make the money you need to meet your CDB and still remain accessible to the markets you want to serve.

The other option is guessing and quoting the number you feel comfortable with. I can tell you from firsthand experience that this is a strategy reserved only for those with “Drive this business into the ground so I can work at the local coffee shop” in their business plan. Take the time to crunch the numbers.

Finances are not something most creative people love to talk about, preferring at times to hope for the best or trust the talent fairy to hit them on the head with the wand of profit. Don’t be mistaken about this—you wear two hats, if not more, and when it comes to your finances the creative hat needs to be stuffed in the closet and the door locked.

Your Next Step

If some of this is still a bit too abstract, try this: Take your current salary and add it to the calculations for your cost of doing business. This should give you a quick way of seeing what you’ll have to make to both pay for the cost of running a business and still maintain your current lifestyle. If it looks intimidating, that should further build a strong case for solid financial management.

I suggest you take a couple of hours and look at your CDB. Search for an online calculator, or follow this link to a calculator on the National Press Photographers Association (NPPA) website:

For further reading on this topic, consider checking out these two excellent books: The Wealthy Barber (Three Rivers Press, 1997), by David Chilton, and Rich Dad, Poor Dad, by Robert T. Kiyosaki (Business Plus, 2000).


ZACK-ARIAS is an Atlanta-based music photographer with a successful studio and a full shooting schedule. Although he’s increasingly well known in the photography world, you’d be forgiven for thinking that Zack’s journey has been a smooth ride. In fact, it’s been anything but smooth, and his story’s a reminder of the power of perseverance. I mention this paradigm elsewhere, but it’s worth remembering that while so many people talk about becoming a vocational photographer in terms of taking a leap, it’s more like walking up a hill. You take one step at a time, and when you slip and lose ground, you get back up and keep forging ahead. There’s not a single working photographer I’ve met who’s decided to pursue his or her passion with abandon, and after putting a business card under their pillow they wake up the next morning with a viable business shooting the work they find most gratifying.

Zack took a photography class in college to keep from flunking out. His teacher saw talent and suggested he go to art school, which he did, flunking out within a year. He took some time off, traveled for six months in a VW van in 1995, then entered a two-year commercial photography degree program at Gwinnett Technical Institute. It was there Zack won a large photography competition and got his first taste of the potential in pursuing photography as a career. He graduated and moved his young family to Dallas to pursue photography while working at Starbucks. In 1998, he left Starbucks to take a job managing a JCPenney corporate studio, then bounced around from gig to gig, eventually landing at in 2001. It wasn’t sexy work, but it paid well and gave Zack the chance to shoot and work on his craft and freelance business. He got absorbed in his work. His family fell apart, and within two years he was back in Atlanta in his brother’s basement, selling his gear piece by piece on eBay. The alternator went on his car, and he sold his 70–200/2.8 lens. Piece by piece, it went out the door until he was left with an old camera bag and a beat-up Vivitar 285.

By the end of 2003 he was working at Kinko’s, having given up on photography as a career, when his friend, photographer Marc Climie, asked him to be a dedicated second shooter at weddings. Marc loaned Zack enough gear to shoot the weddings, and Zack began shooting again. He left Kinko’s soon after, still borrowing a Nikon D100, some glass, and CF cards from Climie. Zack began his return to photography through the back door, shooting “anything but porn” and taking $25 gigs on Craigslist.

When he left Kinko’s, Zack accompanied some musician friends to a show they were playing. Zack shot the gig for a couple bottles of Newcastle, but shot some images that captivated him and sparked an interest in music photography. The next day, he got on Google and began a couple of months of music photography research. At the beginning of 2004, he stripped his website of all his portfolios except the work related to music, and painted himself in the niche of his choosing. He posted his name as Zack Arias—Atlanta Music Photographer, and began going after local bands. Since then, he’s worked with over 400 solo artists and bands.

Zack’s research made him aware of his market in ways many photographers never do. One of the main challenges has been building value into press kit photographs, which is the work Zack most actively pursues and shoots. Local musicians knew a photograph was a key element of press kits, but inevitably had a friend with a camera shoot them against a brick wall. Very edgy. Very cheap. Spending anything more than a six-pack of cheap beer is out of the range of most budgets. Zack’s task was to convince them to change the budget and give them a reason to do it.

Zack treats each gig like a shoot for Rolling Stone, in part as a clue to his standards, and in part because he shoots for the gigs he wants, and Zack wants to shoot for Rolling Stone. Zack began shooting images of higher caliber than what local artists were used to, the images were posted on MySpace artist pages, and comments about the images began to increase. These comments have huge value to musicians, and as more bands took notice, Zack got busier. Booking agents were taking images more seriously, and that too had value for musicians. Zack spent a year hustling the streets and venues in Atlanta, shooting for $25–$100 for press kit photos until he got busy. When his calendar was full of $250 shoots, he increased prices again, and again, until he was still booked solidly at rates in the $850–$1,000 range.

Zack’s success has come not because he knows the secrets but because he’s been tenacious and undeniably good at what he does. He’s learned from his defeats, and now operates a tightly run business with a clear picture of his market. He shoots what he loves and is not distracted by projects that don’t appeal to him. He knows why his clients come to him, and he delivers a great product and service. Zack focuses on building relationships with his clients, and invests himself heavily on the internet. “I really have no idea how anyone did this before the internet,” he says. “You can buy a domain for $8, get a template website for another few hundred dollars, and then get out there and hustle work. There were phone books, source books, and brochures before that, but they all had setup fees that were 10 times more than the purchase of a basic website.”

Zack leverages his presence on his website, as well as his popular blog, Twitter, and Facebook, all of which help him connect with current and prospective -clients, and serve as the watercooler he uses to connect with peers in the industry. His clients keep up with his latest work through his blog and stay in touch through social media and blog comments. Like other photographers looking to diversify, Zack’s a passionate teacher and uses his blog and Twitter to advertise his workshops.

For Zack, the key to social media is to keep it social. “I’m not trying to win a popularity race in social media right now. I see too many people trying to get their followers and friends numbers up like there’s a race to win. There are iPod giveaways, free this, free that, just to get numbers up. That, to me, feels disingenuous, an obvious attempt to begin a marketing campaign or feed an ego. There is no race to win; no one is handing out trophies when you hit your Facebook 5,000-friend limit. Just be genuine, and contribute work, ideas, and techniques that have real value to them, and you will slowly build a strong community of like-minded individuals that you will be proud to call friends instead of sheep.”

Zack’s advice to photographers making the transition is twofold. First, put away the credit cards. “I know the pressure of having to have all the gear. At one point, I was $20,000 in debt. I owned a ton of gear that I knew I had to have, yet I barely knew how to use all of it. Debt created a lot of pressure in my life, and I ended up selling all that gear before it was even paid off. That’s a pretty terrible position to be in.”

Second, he says, find your niche. “Dig deep into your visual soul and find out what you really, really, really want to shoot and just go after that market. You may find you have to spend your first year or two shooting a lot of different things until you find that specific niche you want to fill in this industry, but find that niche as soon as you can. The fear of the niche is that you will be leaving all of the other kind of work you do on the table. The problem with being the jack-of-all-trades photographer, though, is that everyone is your client—and you can’t market to everyone. When you find your niche, you find your market; you can identify where your prospective clients are, and market directly to them. The goal is to become so busy working within that narrow market that you don’t worry about all the other jobs you could be doing.”

All images on pages 199–204 © Zack Arias (

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