Building a Real Estate Photography Business: Making a Business Plan and Selecting a Business Structure
- An executive summary, in which you briefly outline what your business will be.
- A company description, in which you determine specific details about the business - your target market, the services you will provide, suggested pricing for your services, and the company name, to name a few.
- A market analysis that explores the outlook for real estate photography in your area. Note any competitors you will have, explain what products and services they offer, and list the ways in which your business will be able to improve upon those services to fill a void in the market.
- An exploration of the organization of the company. This is where you explain how the company will be structured (more on that below) and who will be in charge of the company’s day-to-day affairs.
- An outline of your proposed products and services.
- An overview of your marketing strategy in which you explain how you will attract and retain clients.
- A summary of financial projections that explores your ability to turn a profit over the next five years.
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Starting a business is a process that takes time, a lot of planning, and a commitment to learning and growing as a businessperson.
In that regard, building a real estate photography business is about much more than being able to create beautiful photos. Instead, you have to develop a solid business acumen if you are going to find success in the long-term.
In this guide, we address two critical steps you need to take to get your real estate photography business off the ground and running - developing a business plan and selecting an appropriate business structure.
Getting Started With a Real Estate Photography Business: Develop a Business Plan
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The first crucial step you need to take when building a real estate photography business is to develop a business plan.
Think of a business plan as your road map to success - it should outline each aspect of starting the business and establishing it on sound footing.
Not only is a business plan important for getting you organized and focused on primary goals, but it can also help you get funding for your venture or bring partners into the fold. As such, you want to develop a business plan that is extremely detailed. A business plan might include:
Creating a business plan might not be something you feel comfortable doing, and that’s okay. There are numerous resources upon which you can rely, including this handy guide from the Small Business Administration.
Likewise, the video above by Young Entrepreneurs Forum offers an excellent guide for organizing your thoughts and getting your business plan developed.
Determine the Business Structure
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As noted above, one of the aspects that should be included in your business plan is a discussion of the proposed business structure.
How you structure your business is important not only for organizational purposes, but it also influences things like taxes and income reporting, depending on the type of structure you determine is best for your needs.
Below is a summary of different structures you might consider for your real estate photography business:
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You, and you alone, are in charge of your business.
This business structure is the easiest to set up because it doesn’t produce a separate business entity. Instead, your business and personal assets and liabilities are not distinguished from one another.
While sole proprietorships are easiest to form, because there is no disconnect between your business and personal finances, you will be personally liable for any business debts.
For example, if one of your light stands falls on a guest at a wedding and they sue you for medical expenses, your personal assets could be seized to pay the judgement against you.
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A partnership is formed when two or more people are involved in the business.
In a limited partnership (LP), one partner - called a general partner - does not have limited liability while the other partners do. Income is passed to each partner’s personal income taxes, while the general partner must also pay self-employment tax.
In a limited liability partnership (LLP), each owner has limited liability and therefore each owner is protected from debts related to the business.
Limited Liability Company (LLC)
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An LLC protects you from personal liability for the most part. For example, your major assets like your home and savings accounts cannot be taken in the event of bankruptcy or a lawsuit.
Another feature of LLCs is that profits are not subject to corporate taxes. Instead, profits (and losses) are passed to your personal income. On the downside, self-employment taxes are required as each member of the LLC is considered to be self-employed.
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Another option for structuring your real estate photography business is a C corporation.
Corporations of all types are separate from the people that own them, therefore they offer the most protection to you from personal liability. Corporations can make profits and losses, pay taxes, and can also be held liable in legal matters, again, all separate from the owners.
The downside of forming a corporation is that it can be both expensive and time-consuming, especially compared to the other options listed above. They require highly detailed record keeping and reporting as well.
Another potential issue is that unlike the structures outlined above, corporations must pay income taxes on profits. In fact, in some instances, profits from a corporation might be taxed twice, first on the company’s profits and second when dividends are paid to company shareholders.
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An S corporation differs from a C corporation in one significant way: it avoids the double taxation described above.
Instead, S corporations are designed to pass profits (as well as some losses) directly to the personal income of the owners. This avoids corporate taxes.
There are limits on S corporations as well. For instance, they can’t have over 100 shareholders, which, for a real estate photography business, is likely not an issue. Furthermore, all S corporation shareholders must be U.S. citizens.
A potential complication is that if you live in the United States, S corporations are taxed differently depending on the state in which you live and work. This means you not only have to register your S corporation with the IRS and with your state, but if you move, you might need to do it all over again to meet your new state’s criteria.
If you don’t have formal business training, all of these different types of business structures can be a little confusing at first.
To help clarify things, the video above by FitSmallBusiness discusses the primary business structures outlined above and provides pros and cons of each type of business.
Likewise, the Small Business Administration has an excellent guide that offers deeper insights into common business structures.
Final Thoughts - Starting a Real Estate Photography Business
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As noted in the introduction, if you are to find success in the real estate photography business, you must take the time to develop a solid business plan so you have a detailed road map for getting to where you want to be.
Likewise, exploring the different options for business structures is a crucial step, that way you build your real estate photography business in a way that makes the most sense for your needs.
Remember that these are just two steps in the process of getting started in real estate photography. Be sure to consult our real estate photography section to get more pointers on building a successful real estate photography business.