How Should I Organize My Real Estate Photography Business?

December 21st, 2016

Colin recently asked:

I’ve been reviewing your site for a few days now and I can’t seem to find an article that talks about how to actually structure your business like, licenses, state registration, EIN number, DBA or things like that. Would you be able to point me to an article or explain the best way to structure the business?

This post discusses the majority of what you are asking. A key item is that you need to research the law in your particular state about collecting sales tax and registering as a business. I some states that have sales tax if you don’t deliver a tangible product (like the photos on a CD) then you don’t have to collect sales tax. This varies all over the map. There is no one answer that applies everywhere.

I think it is worthwhile to register as an LLC (Limited Liability Corporation). $149 at LegalZoom. Because this protects your personal assets like your home etc if someone sues you. Many real estate photographers operate as a sole proprietor.

DBA (Doing Business As) is only an issue when you want to tailor the name of your business. Here is some basic information.

You only need an EIN number under these circumstances. Here’s how to get an EIN number.


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5 Responses to “How Should I Organize My Real Estate Photography Business?”

  • You can file for a LLC yourself without using LegalZoom, the cost to file with the state is not included in the LegalZoom fee. My state (MN) walks you through the process and so you only pay the state filing fee. The process is very simple. I would think all states do this.

  • This is a great question and Colin has taken the first step in becoming successful by recognizing the need. Research or take some classes on how to run a small business. Invest some time and money to bend the ear of a good accountant and have your books set up for you and learn how to keep them. I just send my QB file over to my accountant and he takes care of everything.

    Bottom line, it is a lot easier for a so so photographer that knows business to succeed than a very good photographer that does not. Over the years I have seen some great photogs that would blow most out of the water with their skill, but alas they knew nothing of running a business.

    So to a lot I would say, put the camera down and build a solid foundation first

  • What structure to use for your business is going to vary depending on many things. If you are just testing the waters or don’t plan on ever selling or growing the business to include employees, just trading under your own name can be just fine. If you think you might want to sell the business at a later date, you may still want to be a sole proprietor but use a fictitious name (any name other than your own name) so the company and you appear to be separate entities. Liability protection from an LLC isn’t automatic or impenetrable especially if the business is run by one person or by immediate family members. Many creditors will require a personal guarantee for loans and leases made to an LLC so there is no protection from that debt if the company fails. In California the registration fee for an LLC is $800/year (might have gone up since the last time I checked). There is no fee for a sole proprietorship. There are also LLP’s, Limited Liability Partnership and regular partnerships that are only recommended in specific cases.

    The local library or bookshop should have books on forming your own LLC and when to choose that structure. Use a book and/or online tutorials to do your groundwork and then make a list of questions to ask a CPA. You will probably need or want an accountant if you plan to form an LLC to make sure you handle the finances and filings correctly. If you’ve done your homework, you should be able to get some free consultation time.

    The need for local business licenses, home office permits and other questions can be answered by the local chamber of commerce. You could even bend the ear of a local business person for the price of a nice lunch.

  • Yikes! In Minnesota registration for LLC is $135 and yearly renewal is free if you renew before it expires.

  • New to the site but haven’t seen any mention of Small Business Development Centers as a business resource. There are over 1,000 offices, typically located at universities or community colleges, and they are staffed by business analysts with MBAs who are happy to provide the unbiased advice that business owners need. These offices are funded by the Small Business Administration and the school where they’re located, and their goal is to help businesses succeed. The advice is free and they typically charge very small fees for some of the classes they offer. EVERY business owner should have these folks as part of their business plan, along with an accountant, insurance agent, and yes, even a lawyer.

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