About 5 years ago I attended a photography workshop given by one of my idols in the industry (for lack of a better word), Zack Arias. I learned most of anything I know about lighting from him. He's incredibly talented.
He's also one of those "tell it like it is" type folks....and I clearly remember him telling us all during this class that taking on debt to fund our photography businesses was DUMB.
I shuddered a little inside...because I had put the cost of the $800 class on a credit card.
I have NOT always been a good steward of my business funds. I have fallen victim to Gear Acquisition Syndrome (GAS) FAR too often....I've been persuaded to purchase things because I didn't want to lose momentum with marketing....I've been convinced "you have to spend money to make money" one too many times.
Business ownership is TOUGH. Especially if you have absolutely no foundation in finances or business administration.
Since 2008, I've been pretty much making it up as I go along.
So what if you WANT to start a business, but you're already in debt or don't WANT to go into debt but really have no start up capital? What do you do?
Well, I am absolutely no expert (remember....making this all up as I go along)...but I have supported my family for 8 years on my self-employed income...so, maybe I can throw some helpful nuggets out there...or some cautionary tips based on mistakes I've made.
1. DISCOVER YOUR "PASSION".
Now, okay. I hate that word. HATE IT. If you were in the photography industry you'd probably grow to hate it too. Because every "About Me" page on every website OUT there starts with "Photography is my passion"
So what? Right? You can be passionate about something and completely suck at it....truth.
Photography was NEVER my "passion"....in fact, I had absolutely no interest in it when my husband first bought me a camera to catch faster snaps of our newborn baby. The thing mostly sat in the box. When I finally DID turn it on and start using it regularly, it was mostly because I had been canned from my 9-5 job and had a lot of time on my hands.
I realized pretty quickly I had an affinity for photography....I was pretty okay at it. In fact, I was better than okay at it. And the way my mind works....I was instantly brainstorming "How do I make this work for me so I can stay home with my kid?"
I had to replace an income of $38,000 a year (yeah, insurance contract negotiation isn't exactly a road to riches). And doing that without having to talk about deductibles, copays, or "daily usage rates" seemed okay to me!
It became my passion : Not necessarily the photography part (yet)....but starting a business.
I've learned over 8 years that I really LOVE the act of starting something new. THAT is my passion. Whether it's photography or record stores or anything else.
2. GET YOUR HOUSE IN ORDER
Now, when I started my business, I had (as mentioned) just been fired. I was on Unemployment and I needed to start generating an income ASAP. So, what I did was as I was looking for a new job (because who KNEW how this idea was going to pan out?) I started putting my work out there. Just pictures I shot for myself or for my friends. For free. I had a friend design a logo for me and I actually stuck an ad on Craigslist (HA!).
I remember my first ad: Portraits for $75.
SEVENTY. FIVE. DOLLARS.
I had no freakin' clue about proper pricing for the market. My only thought was I was a complete newbie and I couldn't justify anything higher than that.
This was not an ideal situation to start a business in. I had not done proper pricing research, I had NO advertising funds or start-up capital. I had 1 camera and a whole lot of gumption...and that's about it.
Be ye not so stupid.
If you want to start something, START IT....but don't start it with no safety net. I had no other job, so my safety net was my husband's income and....at that time....a business credit card I took out. (Say it with me folks: DUMB)
So what do you do if you are broke....or working the Baby Steps and have no extra funds?
You start SMALL. Tortoise wins the race....not the hare.
Let's say you want to start a landscaping business? Do you go right out and buy a new truck, new tools, new everything and THEN worry about paying it back? No. You start by making up some business cards (Vistaprint.com....CHEAP! I use this for all of my marketing materials! ) and handing them out to your friends...your family.....that guy you know at the coffee shop. You use the tools you have and you start with small jobs. DO NOT QUIT YOUR CURRENT JOB YET. No no no....do this on the weekends. Evenings. Hustle in your spare time.
Pretty soon word is going to travel and you can bump your prices a bit. Open a DBA business banking account (DBA: Doing Business As) and start socking the money you make into there. Pretty soon, you'll be able to upgrade your equipment.....pretty soon, you'll be able to buy a nice, USED work truck to haul your stuff.
Pretty soon your day job income will be replaced by your side-hustle income and there....you're in business.
This is NOT a fast process....but you don't want to put the financial cart before the horse. Because what if you finance your business....you build it...and they don't come?
3. DO THE HUSTLE (Dooo dooo dooo do do do dooo doo)
Entrepreneurship is not for the lazy. It's not for the easily offended. It's not for the tired or weak. It's ROUGH. Just because you think you have some amazing product or service doesn't mean you're going to be instantly flush with mad cash.
People need to LEARN about your product/service.
They need to try it.
They need to be impressed.
They need to spread the word.
Like I said, this is NOT a quick process. And you can't just sit back and expect it to happen. If you are cash-flowing a start up, you have to go out there and GENERATE that cash.
How do you do this?
I like marketing layering. One marketing concept is not going to cover you. You need to, first and foremost, provide AMAZING service to your first customers who take a chance on you. Go so above and beyond that they have to tell their friends. You have to be willing to work when others won't and be willing to go that extra mile that others won't. The buying public has been conditioned to accept mediocrity. Surprise them and reap rewards.
Then, get your online presence on point. Facebook is free and can be one of your BEST early marketing assets. If you have a page for your business you have to make sure you UPDATE it....keep it current....otherwise people are going to think you lost interest in your venture.
HAVE A WEBSITE. These are not expensive. In fact, some are FREE with a domain purchase. Seriously. HAVE A WEBSITE, I cannot stress this enough. This is where people get their information now. Not the yellow pages. Certainly not newspaper ads. They get it from Google and Facebook. You need to be there.
Join local organizations. Your local Chamber of Commerce, Downtown Associations, or Business to Business type groups are a great way to market your new idea and network with others who may be farther along in the process.
The tricky part comes in when you are getting going and you start to get people asking you to market with them in exchange for money. Is this worthwhile?
If you have the cash from the business set aside and you believe a paid listing somewhere will gain you traction, that is fine.....but, honestly, I've never put a TON of money into my marketing ideas and I've never really experienced a huge lack of work.
I put money into marketing I know will be wide-reaching and effective. Even then, I am frugal. There are companies out there who will charge you A LOT of money to design brochures, rack cards, etc. for your business. This is not difficult to do yourself and it can save you a ton. For example, I recently ordered 250 mailers for my senior portrait business. This cost me a total of $55 because I designed them myself and ordered them through Vistaprint. The same amount would have probably cost me upwards of $300-$400 going through some service.
Every dollar helps with regards to keeping money in the business.
4. MISERLY WAYS MAY BENEFIT YOU, OR HURT YOU
Now, being a cheapie (like me) isn't always the BEST way of going about doing things with regards to a business.
For example, I could not bring two point and shoots to a wedding and expect to book high-end events or be taken seriously. I need a professional DSLR and professional lighting equipment. But, if you are starting slow...starting small...and banking the profits from your start-up, you can cash flow the purchases of needed equipment.
Also, know when to spend and when it doesn't matter.
Photographers get sold on a lot of things that could cause financial disaster: Really expensive workshops and retreats ($2500 for 2 days to hang out in a yurt in Oregon with some photographer who plays guitar and will tell you how to save your marriage through photography......ugh). PROPS, backdrops, extra equipment....it can get astoundingly expensive. My expenses my 3rd year in business hit $37,000. And I didn't even have a studio yet.
I learned quickly that I didn't NEED everything everyone said I needed. What I needed was what WORKED. So, I've become quite the minimalist when it comes to the business. Because its what works.
4. DON'T GET AHEAD OF YOURSELF
I know it can be REALLY tempting to just chuck it all and take a huge risk of opening a business. But rushing into it can lead to some costly mistakes.
Take your time...research your market and the industry you want to enter. Make sure you are bringing something of value to the marketplace that people will WANT. This is huge.
For example, in my town we have had countless "secondhand stores" open. Consignment shops for clothing or used knick-knacky thrift types. Now, there is nothing wrong with places like this, honestly...and maybe in a larger city they would do well...but in a smaller city of only about 36,000, the market wasn't really able to bear several of the same type of business in the downtown area.
Make sure you do your market research so you don't discover you're trying to fill a hole that's already overflowing.
5. KNOW YOUR NUMBERS
It's important to be right on top of your numbers. Otherwise, you'll never know if you are sinking or swimming.
If you do it right and you are cash flowing your start up, this should be relatively easy. Make sure you are keeping track of your sales, your profit and loss, your taxes (yes, you have to pay taxes), your expenses and mileage. This should all be documented so you can see if you are actually making any money, or if your passion is costing you more than you're taking home.
Keep your expenses in check and don't go hog wild, price yourself competitively and correctly for the market, and you should be okay.
6. KNOW WHEN TO HOLD EM, KNOW WHEN TO FOLD EM
Part of being smart about business in general is to know when something is a lame duck. If you've been going for a year or more and you're still not making a profit, it may be time to start reevaluating your idea. Don't drag your family's whole financial foothold down because of a dream and a wish. You gotta know when to walk away, even if its hard.
You will work harder than you've EVER worked before when you take on working for yourself. And, I cannot reiterate this enough, it is HARD. The money is variable...it's a CONSTANT hustle for work....some days you're working when normal 9-5'ers at enjoying their weekends and you want to scream.
Even THEN.....I've seen the other side and I know that my heart belongs to small business. It just does....it makes SENSE to me, as hard as it is sometimes.
I truly believe there are folks out there born to work for themselves. They just have that innate inability to conform to the 9-5 grind....the "game", as I like to call it. COULD I do it? Of course. But once you've tasted the freedom of self-employment, it is REALLY hard to go back.
Some really good books to read if you're looking to start you're own thing (Remember: Reading is part of the process of building wealth! Educate yourself and always be learning!):
- START by Jon Acuff (I'll probably review this one later. Because it is SO. GOOD.)
- TRIBES by Seth Godin (I ADORE Seth Godin. He is a Marketing Genius and his stuff has always spurred me on. HIGHLY recommend any of his books)
- The $100 START UP by Chris Guillebeau