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Business Administration Basics

This is gonna be fun. (audience laughs) everything so far up into this point has kind of been our, well, it's been our foundation right? And it's been a lot, it's been a lot but that was honestly the warm up. So, bring your A game, bring your A game 'cause today, there's gonna be a lot of information that we're gonna be covering. We're gonna blast through everything, but first, I wanna recap where we kind of need to be at this point of the class so you guys have an idea. So, if you're watching online, you need to have these things done before continuing, which is, we need our core values set. We need to understand where we're trying to go. What is our vision statement. We need to know our mission. What is the goal and who are we trying to reach, our target market. We've identified our business name, we know the things that we believe and we have those written down because now, we start setting them in stone. I wanna tell you a couple of things that I believe because I actually saw a lo...

t of online kind of feedback and questions regarding this, which is what would you do, if you had to do it all over again? Would you run this business on your own? Personally, it's simple, no. My personality and what I believe in, who I am, I operate best in a team-based environment. My two business partners, Justin and Chris, they're not here right now, but they could equally stand here and teach this entire class. And they're kind of the other side of this backbone which I would say, if you have the opportunity to create a partnership, again, in a setting where you can fight like family, do it. Because with that setup, if you're a person that operates in a team, it's absolutely amazing when one person in this system is a little bit down, the other people lift you up. If you operate better as a lone wolf, just going at it and doing it on your own, then by all means, do that. But that's what day one was for, was really to identify and we should say, that's what the previous segments were for because we wanna be able to identify exactly who we are, where we're trying to go, what we're trying to do before we get to this place where we're actually putting all down on paper and finalizing and making it all legal. So, that's just kind of a thing for me and I wanna jump into a little bit of our business admin, this isn't that much fun to do this kind of stuff which is why when you are the most energetic, right here, 9 a.m. this is when we're gonna be covering this. And that's the picture that I have, that I've selected for this. That was an actual engagement shoot that I went on, where the couple was like, we're fitness people and we love the 80's, we wanna do this 80's fitness shoot and I'm like rad, I wanna do that. So that's the attitude I want you to bring into this which is like ahh I'm gonna get this done. Okay, so where are we in this roadmap. Don't even worry about this thing, I don't expect you to read it. All I want you to know is that we are in this bottom section right here called administration. And you're gonna see throughout the 12 weeks that there are little things that you need to do throughout the 12 weeks to get your business setup. That's really it. What are those things? One, we need gear, right? Some of you are gonna be at a place in your business where you have what you need already. Some of you need a little bit more, some of you just need to buy everything. Either way, we've put together a tab on the worksheet with basically everything. It has links to everything, whether you shoot Canon, Sony, Nikon, well we put the three up there, the three major ones. We put basically alternatives for everything, lenses, cameras, all that. But on the other side we also have IT basics and the fundamentals, like what do you need to get started in terms of like data management. And then legal, what do you need to purchase for that side. How 'bout software for administration for running your business, a CRM. All of it, is inside of this purchase guide on tab one, 01-Purchase. How many of you all have your names figured ou now? I hope so 'cause what the hell are you gonna register if you don't have your name figured out. But that's where we need to be, where were ready to actually register our name. And a few things before we make it official, we need to look at if there are any existing entities or trademarks and we briefly discussed this in the previous segments where once you have a name, do a quick search and see if there are any other businesses that have that exact name. Now likely, there are. But if you look up trademark infringement, what its gonna show you is a list, just look up like how do I know if it's okay to trademark. You'll get a list of criteria and basically what its saying is that if your business name is identical to another registered trademark, that does the same thing, you're in trouble. But they have to be in the same line of business, essentially. If they're not, like if it's, I think we used an example of like if you own a pet photography studio here, by the name of Verata and there's a New Zealand based creative studio that does design work, you're good, you're fine. But you don't wanna have the same registered trademark locally. Now once you get your name setup, you probably do wanna register the trademark for it. Is it a ... I haven't seen cases and scenarios where somebody else comes and jacks your name and takes your trademark in this industry, as photographers. It's kind of silly to do so but it is possible, if you really dislike somebody and you're like, you haven't registered your trademark yet, I'm gonna steal your name Julie, from now on, Julie Photography (audience chuckles), right here. That's me, but it can happen. We wanna see if we have available the domain name and you can go to instantdomainsearch.com, type in the name and all this stuff is very simple, I wanna kind of go through it quickly. So instantdomainsearch.com. It'll give you a live feed of every domain. And it'll also give you different options of what's available. Usually if you're using your name, its gonna be fine. If you're using a fictitious business name, it's gonna be tough to find a .com. Can you register other, like a .edu, a .org, a .io? Yeah, you can but if you're not an educational institution, it's weird to have a .edu and if you're not a non profit it's weird to have a .org and .io is usually reserved for tech startups, the thing that makes the most sense is the .com. Is there a long term SEO based impacts? Not really, it's just a matter of commercially operating a studio, it's easier to tell somebody go to myname.com. That's expected. Availability of your desired social media names, do you need a DBA, a fictitious business name? So if a DBA is a doing business as. This is simply like when you go to the bank and when you start getting checks in the new Lennon Jirsa. My name is not Lennon Jirsa, my name is Pie. So when i go to the bank, I need to have a doing business statement that states that Pie Jirsa is doing business as Lennon Jirsa Photography. Makes sense? And possibly consider trademarking, we discussed that. I always get questions on entities and protection. I wanna keep this part really simple. This is from a CPA background but I am not a lawyer. Non of us here will claim to give you any sort of legal advice but I can give you the basics. If you do not register your business, as anything, if you just start operating your business, you are considered by your state, a sole proprietor which means, you could do business, you could start selling something right now. Now do you have licenses necessary to do so? No, but from legal standpoint, you have created a business entity. The problem is that you are your own business entity, which means that as soon as you get in trouble, all of you is liable, your personal assets, your home, your car, everything. Registering a entity is gonna give you protection against that. If you follow the rules. This is the big one. LLC is generally most every photographer where you wanna be. We scheduled ourselves as an S corporation. That goes back to our vision and core values and what we are because we wanted an S corporation to actually have the holdings of all the different LLCs that we own. That makes sense? But for most everybody out there, an LLC is where you wanna go. You get certain benefits, you get the S, you get basically S protection, what is it? Oh sole proprietor versus S core protection, okay. You get corporate protection, you get flow through taxes. That means that you're taxed in a personal level, so if the LLC profits, you care those profits through to your personal income taxes where you're there taxed, which is great because you're generally gonna be taxed a lower level. That's a good thing. All profits are taxable, even if they're not distributed inside of an LLC. That means that if the company profits and you keep $100,000 in the company, the law doesn't distinguish between you holding it and your company holding it. They will tax you on it. Where as a corporation could maintain their profits in the company and not distribute them to be taxed but they'll face other types of taxation, corporate taxation. Owners pay self employment taxes in a corporate environment you pay half, again, it doesn't really matter 'cause you're gonna go LLC, that's the for the vast majority of you it's gonna be the right way to go. This is the big one, the corporate veil. Has anybody heard about this? What is the corporate veil? Good I got a couple hands up. So, have you heard the term, piercing the corporate veil. This is the problem, a lot of you already have businesses, right? Raise your hand if you already have a business. Great, I'll guarantee for the vast majority of you, I can pierce your corporate veil, if I wanted to. And the reason is is because of what you do in terms of bookkeeping. It's called, co-mingling of assets. Co-mingling of assets is you register an LLC, but I need a few bucks here and there for some food or I need something and you draw that money from the company. You use company assets and company money to make personal decisions and personal purchases. When you cross that line between the two, that's called co-mingling of assets. It's the easiest way for somebody else to come in and prove that well, your LLC is not valid because you're using your LLC to do personal things and therefore I can come after you personally. So if you have a client, and you think to yourself, this is never gonna happen, but you have a client that's upset. They threaten and they say, I'm gonna sue. And you're like, okay, the most they can get is you know a few thousand dollars, right? She's like, well no, I'm gonna sew for damages. Well, not a big deal, at least my insurance and everything and everything is self contained in that entity. So at least they can't get to my personal assets. Then they go and hire a lawyer and the first thing the lawyer does is subpoenas all your documents. They're gonna subpoena everything that you have. Give me your financial statements, give me everything, give me your records. And that lawyer will know exactly what their doing. And they'll go and find a place where you took out 20 bucks to go and put gas in your car. And they'll say, you pierce the corporate, you have co-mingled personal and business assets, we can now pierce the corporate veil, we have identified that you are the business, the business is you, it is the same thing as your home and we're gonna go after their home. Does that make sense? That's the danger behind not properly keeping records. So how do you keep the two separate? It's simple, you keep proper records on the business side. You make distributions to yourself in the form of a salary and payments and partner distributions, and those two things are completely separated. What you purchase and what you do on your own is your own business. That's not to say that you can't make business purchases. You go on a trip and you're gonna take some pictures, that is part of the business. You go buy a computer that you're gonna use for business and personal use, that can be part of the business. All those things can be business expenses. Just keep the two separated and a good CPA's gonna help you along with that. Does that all make sense? I think that's everything we need to cover in terms of the entities but if there's any questions, raise your hands. Just was wondering about the copyright thing with the with you name in your pictures, for example do you have to register that copyrighting yeah. Yeah so, your copyrights, that's something you don't have to do anything with. When you capture an image, it is automatically yours, its automatically copyrighted to you, does that make sense? Photographers always get over protective, in my opinion about their imagery. Some other person goes and steals your photographers, by all means, if you find out, ask them to take it down. Some other vendor uses your images, and we're gonna talk about this, they forget to credit you, don't worry about it. The only time you should ever worry about a copyright, the only time it's really worth your time to worry about a copyright is if you see Apple or Nike or any of these major companies come and steal one of your images, that's a rarely, if ever gonna happen, that's like a one in a million shot that that's gonna happen because they have procedures and policies set up so that never happens, but in the case that that happens, then you know there's something there to go after. But Angela, if you take one of my photographs and use it, what am I gonna go after? I'm gonna request that you take it down when I find out, but photographers are like, I'm gonna sue, I'm gonna do this. What could you have for me to steal when another business that's just starting and trying to get off the ground is doing something, is it wrong? Yes absolutely. Is it worth your time to bother with, no. Know that your images are automatically copyrighted. When we get to vendors, I'm gonna tell you that, you're better off keeping those relationships healthy than you are trying to go after them. We'll talk about that when we get there. Yes. Pie we do have some questions from the folks at home. I think this is part of the S corp, LLC, scares people. So (laughs) at least it does for me. Let's see, we have Scott who asked, for the piercing the corporate veil, for those of us who already in business and might be co-mingling assets, is there a way to establish a new starting point, so that going forward, we are protecting ourselves. This is rough, and I'm gonna say you consult a lawyer and a CPA regarding that because not really, there's not a new starting point, it's when, 'cause a lawyer that's gonna subpoena something is usually gonna go back three to five years. They're gonna say give me everything from the last three to five years and if they can prove it, then you're gonna be in trouble. But what a CPA can do is clean up your records. They can clean it up and they can get everything right and say this is how we're gonna do things. This is how it's done here. You can consult your lawyer and they can help you to kind of clean up the past and set it a new but it doesn't necessarily mean that you're completely protected. So, the likelihood of you being sued and that kind of stuff is not high. That that's not to scare you in the sense of like this is gonna happen, I'm hoping that all of you guys have businesses and businesses practices. What's likely to happen is you're at a venue, you trip, knock over the cake, the cake falls, it's destroyed, it's ruined, your clients are unhappy, and they say we want you to pay for the cake and also for damages and you don't happen to have insurance, and they say well, we at least want this and this and this. So that's the case, I'm not saying that anyone's gonna start doing bad business practices and gonna get sued, it's the accidents. Maybe on your site, you like you're shooting and your ladder falls and it tips over and it busts like this nice little piece of art at the venue of the property and you don't happen to have insurance. And what about when you change of license, right now I have a sole proprietor license and my plan is to move to LLC and for what I understand I have to open a new bank account and change everything. Does it mean that it's kind of like starting over or can they still look back to when I had a sole proprietor license? So if it's a new entity, and all of your, so the question that you're asking is it's as simple as this, if your business is the same exact name and its the same exact business and your switching over from S corp to LLC, they can probably prove a correlation but if those are two separate things and you're starting up a new business and it's completely separated, then, the business that you do under this, is that business. And the business that you did under the other one is that business and they're two separated things. Does that make sense? Mm hmm. Again, I'd still say it's not that expensive to get a couple hours with a lawyer. A few hundred bucks and you could save yourself all the headache, does that make sense? Just that's one of those small things that you should you should spend a little bit of money on. And a lot of us have friends, family that can give us some advice on this area. Yes. Let's see, where should we be, this is from Newman, where should we be in our 12 week roadmap when we are registering our business? This is week number five, you'll see it under admin 'cause up until that place, weeks one through four, we've been basically trying to figure out where we wanna focus, what is our vision, where do we wanna be, what is our mission, setting our schedule, planning our goals, long term, short term, we're setting up the entire roadmap. Week number five is where we press the go button. Okay, now we're launching and we're going forward. Great. Cool? One more, are you gonna talk about how to pay yourself a salary out of your business or is that out of the scope of the class? I can briefly mention it. Great. Okay, so how do you pay yourself a salary? It's pretty simple. The way to not get in trouble with this is to make sure you're paying yourself a salary that's about what you would be getting on the market. So if you look at what a photographer would be getting on the market, that's the amount that you should be paying yourself. Because if you ever get in trouble and they go back to like, well, how are you paying yourself, how are you doing this, they're gonna look back and see, well, your business is making $200,000 a year, your business is making $200,000 a year, but you're only paying yourself 30, that's a problem. Right, and they're gonna identify it backwards, so like, okay. So, you just pay yourself a reasonable salary, generally you're gonna set that up with like again, whatever CPA services that you have in your QuickBooks management, you can very easily set that up. We also have a, we use Gusto Pay for all of our payments basically. But you wanna work directly with a CPA 'cause they're gonna setup everything, from the way that you expense all the way through to how you book keep all the way through to how you pay yourself. They're gonna give you recommendations so it's all tied in one place. Awesome, thank you for that. Just wanted to get those in, thanks. No I love, I don't love admin (laughs) I like discussing all this 'cause there's a lot there but its also things that are easy to find on your own. The application of all this stuff, the photography which is what we're doing is more difficult, which is why we wanna kind of focus a short time on admin and get through. So the next thing we're doing is we have our name, we have everything, now we're gonna register that domain and get a website. Here's what I would do, I included a link in the purchases to registering your domain under GoDaddy. The reason is, it's a little bit less expensive. It also separates the domain as an asset from your website as an asset. So if you register with Square Space, and let's just say Square Space goes out of business or something happens where you wanna switch to a different platform, you now have one domain with Square Space which could cost a different amount and you gotta keep that so you can keep your domain name or transfer, it's just a headache. So use GoDaddy, that's where you're gonna register all your domains. Then you can freely bounce between different website platforms as you fit. If you like something on Square Space better one year, but the Wix comes out with a template the next year and you're like, I wanna go with that one, you can switch over easily without every having to domains and website is separate. Make sense? Square space and Wix, again, did not exist when we started our business, oh my goodness. We did it the old fashion way, you get Wordpress, you design your own templates, you do all this kind of stuff, it's a headache. Save yourself, you have so much to focus on in starting your business, save yourself some sanity. They make good stuff, they're inexpensive, just go with one of them, cool? Register your social media accounts, we're gonna take care of that admin work. You're gonna get everything set up. The ones that we wanna focus on is Pinterest, Instagram, Facebook is last. Facebook, I have a slide in here, it's Facebook because we have to. (audience chuckles) yeah, because honestly, it's not a client acquisition channel. You're not gonna find your customers there. You'll find plenty of photographers that are ready to talk about your work and critique you, but you're not gonna find customers. But you have to have it. We'll talk about why. Protect yourself with contracts. We have in the purchases link, The Law Tog. Simple, ready to go contracts. I can't knock DIY-ing it because we did it. We did it as well, like I mean, we're CPA's we're like okay we understand terms and contracts pretty well. So the very beginning of our business we DIY-ed it. But as soon as we had the funds, we ended buying contracts and hiring a lawyer and doing all that as well because there's no reason those are if The Law Tog existed back then, it'd been a no brainer. But for us, when we got to the place that, when we got to our place, eight years ago, it was about eight and half years ago when we said we wanna protect ourselves, it cost us a $10,000 retainer just to get a lawyer to come in and basically go through and create all of our assets on that legal side. There was no, right now, it costs 350 bucks to choose a category and get every contract you need. So that's kind of like again, one of those no brainers, just do it, protect yourself. If you're gonna DIY it, make sure you have concrete clauses within your contract for what are your scheduled deliverables, this is where a client can come after you. Because they said in your meeting, you stated that this was gonna be available to them. You stated they're gonna get this, they were gonna get nine hours of this, they were gonna get this set of images, 800 images and you delivered 779. A scheduled set of deliverables is what we need inside that contract to protect ourselves. We need a model release, an image rights, so that way, they know that they're signing away their ability to hound us if we wanna use this for portfolio images or education or whatever we wanna do with those images. They're our images. Should you sometimes remove this for certain clients? Yes, we get high profile clients that will read through the contract and they'll say, I need you to remove your model release clause. Sure, you're spending a good amount of money with us, that's no problem. You shouldn't give up a client just because they want their privacy. When you give up the model release clause, you do not blog, you do not put them in your portfolio, you do not use them for education, you do not show them anywhere. You can get in major trouble for that. Mutual claim protection, this is basically protection for your client side and for you side. So this is protecting them, signing as a customer and protecting you, signing as the business, and we want maxes on claim amounts which is basically saying that, they can't come after you for more than what they've paid and they agree to that upfront. Makes sense? So that way your loss and your liability is always limited to the scope of the project that you take on. Yes? Holdice, right? That's right Holdice. So I've been doing photography lately and doing model release image rights through applications, so there are set of applications that allow you to very simply get a model release just on the spot. But then there has been an instance recently where I had to do an under age model and their parents weren't going to be at the photo shoot, so I really struggled with how to get the model release for an under age customer essentially. You have to get the parents involved, if you wanna protect yourself you have to get the parents involved. Okay. 'Cause legally, whatever they sign doesn't hold water. Makes sense. So, yeah, make a fuss about it. Thank you.