Hey Photographers! Back in February, we wrapped up a blog series aimed at something that consumes so much time and energy from wedding photographers: post production! If you missed it, Part 1 is here. We had to take a break from our “For Photographers” content for a few weeks because of all our weddings and engagement sessions, but now that COVID-19 has put weddings on pause and emptied our shooting calendar, we’re making the best of it and continuing our most recent series: How to Officially and Legally Start a Photography Business!

 

Once you start making some real money with your photography, you may want to consider establishing a legal business entity. For the sake of organization, liability, legitimacy and tax-efficiency, this is the direction many photographers will go after a year or two of making money. And if you hope to go full-time in your photography one day, you’ll need to do this sooner or later!

 

Although establishing a business can seem like a daunting task, it’s actually more simple than it seems. Follow the steps in this blog series to go from side-hustler to business-owner!

 

How to Officially Start a Photography Business 4: Get a Business Bank Account

Now that you’ve started keeping track of the basic finances of your business and have established yourself as a legal business entity, you’re ready to take an important step in acting like a real business: separating your money from that of your business!

 

 

Why Open a Business Bank Account?

For starters, it just makes life easier. Even if you have perfect accounting and know exactly how much of the money in your bank account belongs to you and how much belongs to your business, every time a dollar came in or out, you’d have to remind yourself if it was money coming in to you or your business. And remember: now that you’re a business owner, there IS a difference between you and your business!

 

Another reason to separate your money is for liability reasons. If you think back to Part 2, one of the main reasons for establishing a LLC (a limited liability company) was to, well, limit your liability! Here’s an example. If someone got hurt during one of your photoshoots and sued your business and won, they could take everything in your business bank account, as well as any assets that the business owned. But they couldn’t touch the money or assets that belonged to you personally. So your personal checking and savings accounts, your car, your house and your personal assets (like your engagement ring or the TV in your living room!) would be off-limits.

 

However, if you had gone through all the trouble of establishing yourself as an LLC, but didn’t bother to separate your bank accounts, you could still be just as liable. If you treat your personal bank account like your personal AND business bank account all in one, then why would a judge see it any differently? You’d potentially lose all of your business AND personal money if you lost that hypothetical lawsuit!

 

But don’t fret too much. These things are wise steps to take in the event of a worst-case-scenario, but the likelihood of your business being sued are very low. For the most part, it just makes accounting easier for your business!

 

 

How to Open a Business Bank Account

It’s important that you’ve gone through Step 2 and have officially established an LLC. However, this unfortunately isn’t the kind of project you can knock out in one day, as it can take days (or weeks) after you apply to establish your LLC to finally get that all-important EIN from the government.

 

Once you have that EIN, you’re ready to go! We recommend doing some research on local banks, both the national franchises as well as the local mom-and-pop banks in your area. Once you’ve done some research on who you want to work with, it never hurts to go down in-person and open up that account with a real person, face-to-face! If you ever have questions about your account, this is likely the person you’ll be speaking to, so establishing that relationship from the start can add some peace of mind to a complex situation.

 

Just make sure that, whether opening an account online or in-person, you have all your important information at your disposal. Your EIN is most important, but other institutions may require other info, like your social security number, or that you have a personal account with the bank as well.

 

 

Other Perks of a Business Bank Account

Once your business bank account is open, make sure you direct ALL business purchases and expenses through that account! At first, you’ll want to use the debit card associated with the account, or pay with check. However, you may consider applying for a credit card for your business and link it to that business account as well. If you know that you can use a credit card like a debit card (only making purchases that you know you can pay off that month), then an extra 1% or 2% cash-back can be an easy little boost to your bottom line!

 

But be warned. If you won’t be able to resist swiping that plastic and buying things you can’t afford and don’t need, a credit card will only get you in trouble. If you were to purchase a $1,200 camera on a credit card and only make a minimum payment each month, it would take you almost 10 years to pay it off, and in the end it would have cost you more than $2,500! That’s a bad deal just to have that camera a little sooner.

 

You can also open a business savings account, and link it to your business checking account. We’ll get more into this in later sections, but having a separate account for your business can make paying income taxes each quarter a much easier task! And of course, when you’re paying those sales and use tax each month (see Part 3), now you have a business account to pay them from!

 

Next week we’ll continue our conversation on these SUPER INTERESTING topics 😂 But really, as boring as they can be, these are essential for any small business!

 

Want More?

 

Click HERE to get your free copy of our eBook: “5 Essential Tips for Turning your Side-Hustle into a Full-Time Photography Business.” You’ll also be subscribed to our newsletter, so our newest content, weekly encouragement, and exclusive offers will be delivered right to your inbox!

 

 

 

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Check out the other segments in this blog series!

• How to Officially Start a Photography Business 1: Start Keeping Track
• How to Officially Start a Photography Business 2: Establish an LLC
• How to Officially Start a Photography Business 3: Pay “Sales and Use” Tax Each Month
• How to Officially Start a Photography Business 5: Get Business Insurance
• How to Officially Start a Photography Business 6: Prepare For (And Pay) Self-Employment Taxes