[suz4x4]

Hi,

I was wondering if anyone could help me out on this, I am trying to start my own retouch bussiness and wanted to know how to go about the fun part of taxes. Is it considered a service?

I would appreciate any help or suggestions!

Thanks!

[jeaniesa]

The way it was explained to me when I got my sales tax license is that restoration/retouching is a service, thus not subject to sales tax (at least in the state of Colorado). Also, if I include one print as part of my services, then it's included in the service and not taxed. However, if a client offers more prints than are included in my service, those prints are taxable.

For the prints that are taxable, then you have to determine where the client lives in relation to your taxing "district". For example, my business is outside city limits, so I don't have to collect city sales tax - I only collect county and state sales tax, as long as the client also lives in my county. If I had a client from outside of my county, but still within the state, then I would only collect state tax, since that's the only "base" that we have in common. Of course, that means if a client lives out of state, I do not collect any sales tax at all (assuming I mail the prints to the other state. If an out-of-state client were to pick up the prints at my business for some reason, then I would be required to collect sales tax.

Have I made that clear as mud?? You should check with your own state laws as they are most likely different in every state.

Jeanie

[Mike]

suz4x4
In all fairness, the very last place you want to ask a question about taxes is here on a site devoted to retouching.
The tax laws vary so much from state to state, county to county, city to city etc that you really need to check with whatever authorities exist in your locality.
Most of the tax people I have delt with have one thing in common, they want that tax money (their wages come out of it) and they will be more than glad to tell you all about how to go about collecting whatever taxes you are supposed to. I am sure that they will assist you in getting all the necessary forms, permits or whatever it takes to make sure you are a "legal" business in your area. And they will collect whatever fees are necessary for you to open your doors!
I have always just gone in (or phoned) and started with the line "I am thinking of opening a business, what do I need to do?" Notice that I did not imply that I was already doing business, just thinking about doing it! That is usually an important point.
Anyway, goodluck and don't let the tax folks scare you off, but at the same time don't put your foot in the water where the sharks live........
Mike

[suz4x4]

Jeaniesa & Mike,


I will check it out even further. I think NY might be the same as colorado. I will try not to let it all scare me off! It is nice to know how other people are handling things and that your not too far off! ( well maybe I'm alittle off- in what direction is to be determined .)

Thanks for your help I appreciate it!


Sue

[Jim Conway]

I haven't posted in some time now but after reading this, I felt that there might be some benefit for the dozens of new readers to know that business is not "universally" bad!

With the accent here on a positive report - I've just closed the books on a great year and it appears right now that my net for January will easily be in excess of $8,500 - thanks in a large part to the usual annual response we get from the Christmas cards that we sent out.

During the past year I've increased my pricing in order to cut a backlog that is still in excess of 3 months and far too much work for this 73 yr. old man! I've raised the small orders for custom printing, media conversions etc. to a minimum order of $39.50 now and for the retouching (the art work end of the business) to $139.50 minimum (not including prints).

For the information of those who do not know me, I've kept no "secrets" to anything in my business and have posted all of the info on my methods, sales, advertising, etc.here long ago. Very little has changed and thanks to Doug, those posts should be fairly easy to find in the archives so no need to repeat any of it here.

Problems - sure - like everybody else I have my share. The changes from traditional to digital has been a pain for me and still is! Given a choice I still have a tendency to revert to the old ways whenever possible and I am still having trouble finding competent help.

STORY TIME! As some of you may know, the Portland market is a highly competitive area - yet this past year a new photo copy and restoration shop opened less than a mile from me! A father-son team that were offering the "price" advantage. Big grand opening and splash in the local papers but out of business in less than three months! Like the car commercials with the extreme sports, you gotta ask , "What were they thinking about?" How could you possibly build public trust in 90 days?

The bottom line is this - you "buy" market share with time and money and anyone that wants to implement a business plan has to know that you cannot increase your market share with a single "feature" and that includes price!! Visualize a scale with benefits on one side, price on the other - and think about how you can tip the balance to benefits to offset any price you set, then how you are going to get THAT story out to the public. Do it and you'll have all the business you can handle simply because there are literally billions of photos that are self destructing every year and only a few thousand people around who know anything at all about how to salvage them.

Jim Conway
Timemark Photo Conservator

[jeaniesa]

Thanks for the uplifting post Jim!! I for one need all the encouragement I can get right now!

And congrats on your great year!

Jeanie

[KevinBE]

Thanks for your insite Jim. I am trying to begin my business. So far it has been a big eye opener. A lot more to consider that I had planned on. I am going to have to go to my City Hall to get the full information as to what permits and tax licenses I need. I have been unable to glean this information from their Web site or from the State Web site either. I'll have to hunt more agressively for the information.

I'm so glad that I can start small and hopefully grow my business over time. I can't believe that Jim's new competor came and went so fast. They never should have begun a new business if they were unprepared to lose money for at least the first year. But, that happens to a lot of new businesses. I guess that is one reason why the majority of small businesses fail.

Anyway, thanks again guys for the information.

[suz4x4]

Hi,


It is definitly an eye opener to try and start your own business.

I did find out that in NY (Long Island) you do have to charge tax, it is considered tangable personal property. it's 8.5%. just one more thing to worry about.
I did not check into any permits or anything else. Should I?????

If anyone has any other tips on starting a business let me know! If I find anything else out I will be sure to post it.

Thanks

[jeaniesa]

Suz,

Just checked to see if there's a Small Business Association in your area - found the NY business "startup kit" here. That should tell you everything you need to know about starting a business in NY!

Jeanie

[suz4x4]

Hi,

Thank you for the link. I will be sure to check it all out!

[June Curtice]

And be certain that your tax preparer doesn't forget to include the form for Self Employment Tax. This is your Social Security contribution and is mandatory in the US. I wasn't aware of this when I first started my business in 1990 and had to ante up two years in arrears.

June

[Mike]

Let me relate a short story about tax's that happened to me. When I first started my studio I didn't make much profit, my wife had a full time job, and I had another part time job. The idea of hiring someone to do my taxes looked like an unnecessary expense! After a few years things are going along pretty well, and so at the end of the year I am doing my taxes and find I owe about $6K . So I put all the paperwork away for a month, dragged it all back out, did it all over and now owed better than $7K!
So made an appointment with a tax preparer that was recommended by a friend, and when she got done they owed me about $4K Then she says who did your taxes last year? We ended up filing amended returns for as far back as we could go and I ended up with something like a $10K refund. At the time she charged me about $100.00. One of the better deals I ever made.
The point to all of this is that there are some things that most of us are just not that good at. The trick is to be able to recognize what it is that you can really do well, and what it is that you need to farm out. Tax's and some of that kind of paperwork is really complex and if you are not careful can come back to really bite you. Be cautious!

Mike

[dipech]

Hi Everyone!

I just discovered Retouchpro yesterday and am just amazed! This is such a wonderful resource!!

I am just starting up my own photo restoration, retouching & photo art business.
Any advice on what to charge when a client has 20-30 pictures that are in varying condition from needing only minor attention to major restoration? Would a total package price be the best approach? If so, how to decide on a fair price without scaring him away from the whole deal because it's too much?

How do you factor in things like Costco's online Kodak photo services (www.costco.com) where you can crop, adjust the brightness, eliminate red eye and add a sepia tone on your own for free and then order your prints for under $3.00 for a Kodak 8x10 glossy? Just to see how good their service is, I downloaded a picture and experimented. They offer no scanning service and you must download a digital picture directly to their site. But once there, their tools may be enough if someone has a basically good picture that needs only very simple cropping, a sepia tone and/or red eye elimination.

Is there any kind of ethical obligation to inform clients of such deals for minor restorations??

Hope to hear some responses very soon

Thank you,
Diane

[Mike]

Diane
Welcome aboard!
As for your question on what to charge: The varying conditions of a clients prints can be a real problem. So what I have done is to figure out about how much time any given repair will take. Then I figured out how much $/hour I would like to make. Then I memorised all that. So when a customer comes in, I make a list of each orginal, and give them a $ amount for each orginal that includes not only the repairs but the prints that they want. Some say go for it, others may break it up in segments as the total is too big for one purchase or whatever. When they call on the phone and ask about prices I tell them that after I see the orginal I will give them a bid on the job. This seems to work pretty good for us.
The Costco thing in not a factor in my business. I do not worry about it or tell my customers about it. Does the Ford dealer tell the customer about what the Chevy dealer offers? Never happened to me. Ethics is not a factor here.
Good luck
Mike

[kstein]

I live in an area with a very depressed economy. With the uncertainty of our future, I charge by the hour. I actually have a kitchen timer I use for the restore only. I do not charge for scanning nor printing, nor do I charge when their is a learning opportunity. I may spend 6 hours learning something and then start over with the timer to see how long it really takes. I call that a knowledge deposit. It doesn't go in the bank, but it really helps me grow in my craft. I give them one print with the restore and sell additional prints accordingly. The more they buy, the less it costs. I also offer a CD or DVD, but I imagine many people take these to the Wal-Mart Machine and make their own copies. I've heard rumors of people talking about my services in front of the Wal-mart photo machine. Hmmm! Maybe I should display one of my cards there.

I can't let this bother me. I've been paid $20.00 per hour to do a job. Hopefully, this is enough to offset such activity I have no control over, without being so high priced that no one in my area can afford me.