Rather than look back into the dim and distant past when I originally set up my part-time photographic business, I am able to give you a more up to date view of setting up your photographic business. Recently I have been assisting my son in setting up his own business and while he has been dealing on the product development and marketing, I have been focusing on the business aspects of the venture.

I must stress that this is based entirely on British law so if you are based outside the UK, you will need to refer to your local business laws.

DO I NEED SPECIAL PREMISES ?

Personally, I started out working from home and continued to do so for about 5 years, albeit in a converted garage for much of that time. Finally I moved into a High Street Studio – a move that coincided with me becoming a full-time photographer.

If you can work from home too, I would strongly urge that you do as it removes the need for finding premises along with all the inherent additional costs that would go with it.

But the question of premises is one you will need to consider and will be based upon the issues I’ve listed below – a list which I do not claim is necessarily definitive:

NEED A LICENCE TO OPERATE ?

First things first. For some professions, individuals quite rightly need a licence to set up in business. So do you need a licence to earn an income as a photographer in the UK ? Well, whether you are a part time or full photographer, the short answer is “No”.

Nevertheless, I do recommend that at the very least you join the Royal Photographic Society and work towards gaining a distinction such as the Licentiateship. “Why bother if I don’t need to” you may well ask ? Well if you are serious about your photography – being awarded a distinction is in effect the same as receiving peer recognition. For the RPS Licentiate distinction, it also allows you to use the letters LRPS after your name.

Click on the RPS logo above to connect to the website

YOU WILL NEED A NAME

Every business (even a part time photographic business) needs a name. Something to put on your business cards and letter heads. Something to tell people who you are and what you are. It could be something simple such as John Smith – Photographer.

However, these days, things are not quite so simple as they were when I first set up my own business. There is this wonderful thing called the “Internet” and I strongly recommend that you make use of. It is like having a shop window when you don’t even have a shop !!

So when thinking about a name for your business, you need to think about what’s called a website domain name. For example, www.johnsmithphotographer.co.uk. Is it that simple ? Sadly it’s not as someone else may have already reserved the name www.johnsmithphotographer.co.uk.

Don’t panic - help is at hand. If you use the facility below, you can enter as many domain names as you like until you find one that you like and that is available. Once you find one you like that is available, I suggest that you reserve it – it will only cost you a few pounds a year. Once that’s done, it available for you and your business and no one else can use it.

This domain checking and registering service is operated by 1 and 1, the Internet Service Provider that the "How to make money with your camera" website uses.

In the perfect world, your preferred business name and your website domain name would be the same. However, someone else may have got there before you on both counts. So you may need to be flexible.

SETTING UP YOUR BUSINESS

SOLE TRADER

This is, dare I say it, the lowest form of life and the simplest vis-a-vis a business entity - not that there is anything wrong with that. As the name suggest, a Sole Trader is just one person, often working on their own and who has complete control of his business.

The good news is that they get to keep all profits when times are good. The bad news is that are also responsible for any loses that the business might incurr.

That aside, arguably the most attractive thing about setting up a Sole Trader enterprise is that it simple to oeprate and the set up costs are minimal.

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PARTNERSHIP

This is two or more individuals who have decided to trade together. Normally, each partner would have an equal say in any decision making and how the business operates. Generally speaking they would an equal share of the profits and, like the Sole Trader, they would also have an equal responsibility for any the losses.

The significant difference the difference is that a Partnership Agreement should be prepared which represents the basis on which the Partnership has been formed. It will take account of how decisions are to be reached, how each partner is to be paid and it must also document what process is to be followed if a partner wishes to leave the partnership.

Although it is not mandatory, it may be considered prudant to engaged the services of a solictor to prepare a partnership agreement.

PRIVATE LIMITED COMPANY

A business which is set and run as a Private Limited Company will be owned and operated by the company itself rather than the individual or individuals who set it up.

A Private Limited Company is recognised by law as having its own identity separate to that of its directors or members. It is if the company is a person in its own right.

Any transactions made through the business, though carried out by the directors, are on behalf of the company in its own right. Therefore all debts of a Private Limited Company are its own and the liability of it shareholders is fixed at the amount of their share investment. Consequently, the Directors, of which there mus be at least three and no more than fifty, are not liable for any company losses except for a token amount of cicra £100.

The company must be registered at Companies House although there are numeous agents that can be found via Google that will set up you Private Limited Company alternatively an accountant can perform this task

Private Limited Companies must prepare annual accounts which must be submitted to the Registrar of Companies for filling. Your PLC will also be liable to pay Corporation Tax on its profits.

REGISTERING UP YOUR BUSINESS

I would strongly recommend that you register your chosen business name so that no one else can use it. And if they do, you can legitimately request that they stop using your registered name.

Do a Google search on “Register Your Business Name” and you will find that there are a number of companies who will peform this task for you. Your name will then be recorded at Companies House.

TAXATION

Once upon a time, there used to be the Inland Revenue and Customs and Excise. The former looked after income tax and business tax while the later worried about VAT and Excise Duty.

These days we have a government department that combines the two - Her Majesty’s Revenue and Customs (HMRC). That said, from my recent encounters with them, they still seem to operate as two autonomous organisations within the HMRC. So consequently, I propose to deal with them separately through this website.

BUSINESS TAX

Anyone startting up a new business is legally obliged to notify HMRC within three months of commencement. This can be done over the phone 0845 915 4515 between 8:00 am and 8:00 pm Monday to Friday and between 8.00 am and 4.00 pm on Saturdays and Sundays. Alterntively you can register via the HMRC website at www.hmrc.gov.uk.

The HMRC also run some very good free seminars which are designed to "keep you honest" and make you aware of your legal obligations.

I recently attended the seminar on "Becomg Self-Employed" which I found very helpful indeed and I would it recommend it to anyone starting out in business.

VAT

I recently completed and returned my son’s VAT returns for his first quarter in business and something really gave me a good laugh. Those of you who remember Thomas the Tank engine will appreciate why. The pre-printed envelop provided by HMRC was addressed to the VAT CONTROLLER. Who says HMRC staff don’t have a sense of humour !! Enough frivolity – onwards and upwards.

As I write, you do not need to be VAT registered unless you expect to earn at least £67,000 per annum. However, you can register voluntarily which may be to your benefit - you decide.

The two benefits that I can see are firstly, being VAT registered gives your business an air of respectibility. Potential Clients who see your VAT registration number on your stationery may take you a little more seriously.

The second benefit is that you can claim the VAT back on anything you buy for your business. So if you are planning ot buy some expensive equipment, you can save yourself the VAT.

The downside to all this is that you will a) have ot charge your Clients VAT and b) you will need to submit quarterly returns. But frankly, I think that that is perhaps not as arduous as it may seem.

BOOK KEEPING

This is something which I have always found quite straight forward and, no, I'm not a mathematician nor am I an accountant.

In order to satisfy the requirements of HMRC, there are certain records you must keep. Whether you keep these records in a paper book, or you use a computer spreadsheet or get some flashy but of accounting software, HMRC don't seem to mind providing that you have kept the basic information they require. Essentially it boils down to the following:

• Make a record all sales and any other business receipts as they are transacted. Keep a copy of these receipts
• Keep a separate record of business asset sales
• Record details of all business purchases
• Maintain a record of all business expenses regardless of the size of the expense
• Keep a separate record of business asset purchases
• Keep all bank details including statements, checque book stubs, paying book stubs etc
• Record all amounts withdrawn from the business (e.g. wages, personal drawings etc.)
• Record any monies that you pay into the business form your personal funds
• Keep all business paperwork such as bills, invoices etc.

A final point on record keeping is that HMRC do require that you keep your records for a minimum of six years.

DO I NEED AN ACCOUNTANT ?

It could be argued that there is no right or wrong answer to this question. However, draw your own conclusions from my own story below.

In the days when you could walk into your local tax office, I had made an appointment to see a Tax Inspector and I took my first set of accounts along for scrutiny. Keep in mind that at this time, I still had the day-job too. Had I used an accountant to prepare the figures – well of course not. What did I need an accountant for ?

The Inspector took a cursory glance at my figures and gave me a piece of advice that I didn’t think I really wanted to hear. He suggested I went and found myself an accountant for heaven sake.

I followed his advice and with the benefit of that wonderful thing called hindsight, he did me one big massive favour. I had reinvested much of the money I had earned in expanding my business and had bought a number of expensive photographic items. I thought I had just about broken even. “Oh, no” said the Accountant when he reviewed my books, “you’ve made a thumping big loss”.

The net result of taking the taxman’s advice was that during the course of the following tax year, I got a rebate of over £8,000 from the taxman. And do you know what the best bit was – the Accountant’s bill was around £300. That is arguably the best £300 I have ever spent.

So based upon my own experience, I would suggest you think carefully before, like me, you decide you don’t need an accountant.

PS. My Accountant does massages too !!!

BANKING CONSIDERATIONS

If you find that business takes off and you are managing your business activities and personal expenditure out of the same account, it could get very messy. Moreover, iof you needed an accountant to sort it out, then it could get costly.

Consequently, my recommendation is that you open a separate business account right from the outset.

There are some good deals around at the moment if you open a business account with at least one high street bank offering 18 months free business banking.

ACCEPTING CREDIT CARDS

When I set up my business I found that a fair number of people wanted to pay by credit card which is something you may wish to consider too. These days one of the easiest ways of being able to take credit cards without having to pay out the initial merchant fees for setting up the account is to use PAYPAL - www.paypal.co.uk

It doesn't cost anything to sign up and the transaction rates that PAYPAL charges are comparible with other credit card companies.

BUSINESS START UP SUPPORT

Oh haven't I had fun. When I started wokring on my son's buisness with him, I discovered a Government sponsored organisation called "Business Link" which you will find at www.businesslink.gov.uk

In short, I think it's brilliant. It runs a series of very comprehensive courses, most of which are free, and it takes you step by step through setting up your own business.

To be fair, there are a number of organisations out there that offer help and advice in setting up a business, but make Business Link your first port of call.