Start-Up Capital

[Songman45]

How did you generate the funds to launch your business? Who got loans or grants? Did anyone solicit investors? Once operational, how did you promote yourself? What advertising did you use and what worked?

[TimAndrea]

you must be writing a book! that is a lot of info out there. the easy version, i started out small, using either cash or borrowing in advance of known income so i could pay it off then. then as i made money i bought more stuff. I call it a habit that supports itself. as for marketing, i need to do that, i have some customers by word of mouth but could do so much better if i just invested a little time in promoting myself. I am only doing this part time and not trying to make a living at it. Now that the economy is doing as great as it is i think photography is going to be one of the first things that people decide they can do without. but that is another thread

[Songman45]

Originally Posted by TimAndrea

you must be writing a book! that is a lot of info out there. the easy version, i started out small, using either cash or borrowing in advance of known income so i could pay it off then. then as i made money i bought more stuff. I call it a habit that supports itself. as for marketing, i need to do that, i have some customers by word of mouth but could do so much better if i just invested a little time in promoting myself. I am only doing this part time and not trying to make a living at it. Now that the economy is doing as great as it is i think photography is going to be one of the first things that people decide they can do without. but that is another thread

Hardly writing a book actually getting a plan of action. I had a very successful tenure with a portrait company but my personal life and my professional aspirations did not work well. I could not mesh a new marriage with the rigors of extensive travel. I stepped completely out of photography for years. In another long-term career in law enforcement I was able to use my photographic skill shooting investigative and evidence work, some of it graphically ugly. Life handed me a few bushels of lemons. In September I found myself jobless, family-less and in dire straits. Fortunately, the uncle who had originally sparked my interest in photography as a child is a working successful photographer and put me to work. I've been learning and photographing equestrain events since then. I have been re-inventing my life over the past 8 months.

My plan is to return home to TX and establish a photograpy business. My children are now grown and seeking their own careers and I don't have a heavy load of responsibilities at present. Its a great time to stockpile assests, experience and get things set. Like many of my contemproaries, I'm a far better photographer than I am businessman. I hope to network with other professionals who established, grew and operate successful businesses.

Under capitilization is a major reason for start-up failure of many fine endeavors. I'm in hope that someone here was able to atract and aquire the funding necessary and will share how it was accomplished. I don't need to re-invent the wheel, I'd just like to duplicate a model that worked.

[PetersenPhotography]

There's an organization of retired executives (SCORE) that helps people start their own businesses. I had thought that I might try to take photography full time since I was so unhappy teaching in my present school, but I just found out (a few weeks ago) that I'll be transferring to another school, so my efforts will be focused there. SCORE was a place I was going to go to get some help doing that.

I don't have any experience in starting up a company, but that was a direction I was going to head. Hopefully that at least gives you a direction.

[Songman45]

Thanks Nic nice idea. I appreciate your input. Best of luck in the new assignment. I hope you enjoy your new school. Its a shame to have invested all you have in time and money and not have a career at the end of it all that satisfies you. K coming your way.

[cpurves]

Originally Posted by Songman45

My plan is to return home to TX and establish a photograpy business. My children are now grown and seeking their own careers and I don't have a heavy load of responsibilities at present. Its a great time to stockpile assests, experience and get things set. Like many of my contemproaries, I'm a far better photographer than I am businessman. I hope to network with other professionals who established, grew and operate successful businesses.

Under capitilization is a major reason for start-up failure of many fine endeavors. I'm in hope that someone here was able to atract and aquire the funding necessary and will share how it was accomplished. I don't need to re-invent the wheel, I'd just like to duplicate a model that worked.

Hi Steve:- you have achieved step one. You relize that business fails from undercapitilization.
You have to know your potential market first. If you haven't done so yet check out the town you are returning to and determine your potentials. Are you going to specialize? How? Who is your competition? ETC -- These questions can be answered without putting a lot of money into the venture.
The suggestion to check out SCORE or other organizations for that startup help is bang on. I am Canadian and there are a couple of funded organizations that will sit down with you and help with that initial planning. You're on the right track. Hang in there and be patient. I researched my market, potentials and all the logistics for at least a year before I started our business. It might not take you that long but it is not something you don't want to jump into.
When you ask questions, more always pop up. Keep asking them.

Good luck

Cheers
Chris

[HuBBaTheMan]

A word on investors. One thing that i've found when dealing with investors of different kinds (foundations, banks, companies, rich people, etc) is that they prefere it when the company they invest in is not dependant on single individuals. Ie. if it's say something that is manifactured and sold, this can be done without the original inventor/designer around, thus making the investment in the actual company a bit more secure.

Photographers however are basically selling their personal style and knowledge, so if you replace the photographer, you also change the product which may break the entire investment for them. This have made it hard for me to get any kind of external funding (and i've tried to pitch it

There are other ways you can get help though even if it's not of the direct monetary variant, with corporate incubators and project to promote business development which can assist with housing the business, marketing, business coaching, tax & legal issues, etc.

Ie. all the stuff most photographers hate to deal with

[FatNakedGuy]

SCORE
Service Corps of Retired Executives
SCORE | Counselors to America's Small Business | SCORE

[brian.austin]

Personally, I'm self-funded at the moment, relying on my "real" job to fund my dream job. And I have a working wife, which is a big help. Plus we tend to live within or below our means so discretionary income is relatively high.

However, when I started my IT company well over 12 years ago, I had nothing. My first $5,000 came from refinancing my paid off car. It wasn't really WORTH $5K but the banker realized what I was trying to do, looked at my past relationship with the bank, and approved me. It bought my tools, my first high end workstation (mainly for programming) and initial marketing materials. I was off and running after that.

One of my customers was a wealthy general contractor and entrepeneur. He simply loved business. That was his hobby. So when I made my first "big" sale of $20,000 worth of equipment, I needed a short term loan since I didn't have credit terms with my suppliers (too small). He loaned me the capital for the equipment for 60 days.

I also borrowed $15,000 to expand the company and establish a better market presence. I borrowed it from the company's bank and had a co-signer. That pushed me up to the next level. I later sold the company.

One of the techniques that kept my cash flow going was offering discounts for pre-payment. I'd offer a 3% discount on orders if it was paid for at the order placement. It worked 90% of the time. That gave me the capital I needed to buy equipment and operating funds from the margins.

As I branch into more "professional" photography, I'm going from a self-funded perspective, however. I have funding sources available (quite a few, actually) from former co-workers, supervisors and relatives.

While I agree with Chris about undercapitalization, I also think many companies OVERcapitalize, thinking they need more than they really do to get started. A sure fix is to get a realistic budget in place. First start with an operating budget, including equipment, supplies, salaries, marketing, etc.. Then build a sales budget/forecast that meets the operating budgets needs. This is actually backwards for an operational company but for a startup, it's really the only way to set up the monetary goals. If your sales go beyond forecasts, you're doing well. If it doesn't meet forecasts, you need to start adjusting your operating budget or find a different marketing approach.

Good luck.

[billkay]

My business was self funded from the start almost 1 year to the day. Between the initial equipment purchase, website, industry shows and other marketing/self-promotional costs, and COBRA insurance, I have spent nearly $60,000 this year. My plan was to fund it for 3 years and then decide whether or not to continue. I have managed to make more $$ this year than anticipated but not enough to offset the initial investment. Having a plan and a budget, and sticking to it is one of the most important things to success. I would do whatever I could to borrow as little money as possible. Having creditors is a fast way to lose sleep.

[jhilgedick]

Almost every suggestion posted here revolves around different components of a business plan. Yep - I said it - one of those dreadful words we hate to hear.

But it doesn't have to be like that.

Grab a free template from a google search or pay for an entry level one one from one of the software vendors. Keep it simple to start with, you can always go back and edit it later to reflect growth or deficiencies. By sitting down and putting the effort into creating a plan that represents where you are and where you want go/grow is an essential first step.

If you decide that you need to solicit investors, you will have to really make that plan shine and at that point it might be worth the funds to get a professional involved.

Just another opinion - take it FWIW!

[Harry]

Not much to add other than know your market. Probably not too much problem finding customers around Dallas. I can do video/photo work here all day long, everyday, but no one around here wants to spend money. Can't get the prices up high enough to survive for long.

[ee50ok]

You do not need to start with lots of expensive gear, nor with lots of money to cover your costs.

A relation of mine has a small photography business. She uses a 350D, a sigma 28-70 lens, tripod, a few reflectors and a flash gun (I'm not sure which one). For the first five years that was her complete kit list (Oh and a Photoshop on a desk top PC, that I gave her and still maintain....).

When she was starting out she worked as a postman in the mornings and as the photography business took off she reduced her Postal hours to suit. She now only does two mornings a week deliverying mail.

Recently she purchased a portable studio kit (from profits), and can do portrait work at home or visiting her clients.

All this and she's a single mum with two (now young teenage) kids.

Most of her time in the early days was spent marketing her capability with a small portfolio of pictures and a set of business cards. Most of her early appointments came from adverts in a local photo processing store and a wedding shop. To get the adverts in place she did free photo asignments for the retailers, these shots sold her capability and allowed the stores to advertise their wares more effectively.

It has to be said that she gets better results than I do with less than half the kit......

[Unkl Buck]

Whatever the method of attaining the funds, you'll need A TON of it!