Starting a business specializing in portraiture

Started 8 months ago | Discussions thread
Michael Fryd
Senior MemberPosts: 1,683
Like?
Re: The Math Matters!
In reply to PenguinPhotoCo, 8 months ago

Frequently, the meaning of a word or phrase will vary with context.

For instance, something might legally be a "business" as far as zoning laws are concerned, but might not be a business as far as the IRS is concerned.

If you want to argue over the meaning of words you need to be careful that everyone is working in the same context.

PenguinPhotoCo wrote:

Making up definitions again...

'monetary value' means someone will pay CASH for them.

Sorry, but most portfolios have no monetary value.

Yet, I know a lot of models who pay cash money for their portfolios. I know many photographers who spend money on their portfolios as well.

From some perspectives, Portfolios are worth paying for.

You could make the claim that the "monetary value" of an object is solely determined by what others would be willing to pay for that object. This is not a particularly useful definition when discussing business accounting.

For instance, I recently paid to have my studio painted, and to place an ad in a magazine. I doubt anyone would be willing to buy either of these. However, for accounting purposes they have "value".

In the US, the IRS agrees. Generally, when you buy something for your business it has "monetary value", even if no one is willing to buy it.

For instance, suppose I pay an artist $5,000 to paint a mural on the outside wall of my studio building. Further suppose that mural has an expected lifespan of 5 years. After one year, the IRS would likely assign a monetary value of $4,000 to the mural. After 2 years, the monetary value would be down to $3,000.

The fact that the mural has no resale value, and that no one would offer money for it, does not change the fact that the IRS considers it to have "monetary value".

If the building burned down after 4 years, the IRS would allow me to claim a loss of the remaining $1,000 or monetary value in the mural.

Value depends on context.  If I am selling my studio to someone who wants to use the building, then the building has a positive value.  If the buyer wants to build a new building, then the existing building has negative value as he has to pay to demolish it before he can build his new building.

A stock shooter's, sure. A wedding shooters? Nope. I have lots of wedding album samples - aka portfolio - and images on line. NOBODY will pay me a dime for them.

I have sample albums as well. No one buys the sample albums form me, but they do convince new clients to hire me. Although it may be difficult to put a specific monetary value on these albums, they clearly have value.

I shoot a family - they buy images. Yes, monetary value.

But what if the family barters with you for your services? Suppose I shoot images for a model, and in exchange she provides maid services for my studio? No cash money changes hands, yet in the US, the IRS requires me to track and report the fair market value of the services exchanged.

I print one to use as a sample..whose gonna buy that? The family already bought a copy, they don't want a second.

Now if you want to say that SHOWING that image brings me customers than yes, it has value for advertising purposes. But that value drops over time. Showing a 2015 senior to the class of 2015 works well but showing a 2008 senior not so much. Good image or not times change, styles, the market, clothing, etc.
A wedding album from 1994 would have no marketing value today.

Actually, an old wedding album may very well have marketing value today. It might be used to subliminally demonstrate to a client that you are an established photographer that can be relied upon. It can show that you have experience that your competitors don't.

An old album can be useful if it features someone famous.

You can also use it to try to sell a "retro" look and feel.

A large bookcase full of old albums can make a good demonstration of the size and scope of your experience.

I would agree that a 1994 sample album is less likely to be useful than a current one. For tax purposes, the capital investment in that album has likely already been depreciated.

I would not go so far as to say that an old album can never be useful.

-- hide signature --

Don't seek advice from someone who is not where you want to be - CJ Lewis
My opinions are my own and not those of DPR or its administration. They carry no 'special' value

Knowledge of accounting, tax accounting and other business practices can be very helpful when starting any sort of business.

Reply   Reply with quote   Complain
Post (hide subjects)Posted by
Keyboard shortcuts:
FForum PPrevious NNext WNext unread UUpvote SSubscribe RReply QQuote BBookmark post MMy threads
Color scheme? Blue / Yellow