Comments

ADinelt wrote on 4/4/2004, 7:57 PM
Funny you should ask, as I have just started a business on the side doing photo/slide preservations, restorations, presentations and tape transfers to DVD.

Some portions are based on a flat rate, but when it comes to doing custom work (e.g. video editing, restoration work, etc.), I am working at a rate of $30.00 an hour. I will estimate how long the job will take, then multiply it by my hourly rate. Don't know how well this will work out or not yet, but I was at my first show this weekend and had a lot of interest. I had 155 people leave their names, addresses and numbers for a $50.00 gift certificate that was being raffled off. The winner could apply it towards any of my services. Also from the show, I booked an appointment for Wednesday to take two wedding tapes (one of the service and one taken from the balcony) and edit them together into one final product, add their wedding song and some still photos at the beginning. I was also straight up with the people at the show letting them know that I have a full time job as a computer programmer and this is being done in the evenings and weekends. I also found that most of the people who were interested were around 50 years of age and up.

In case you are interested, here is my website which has more information on pricing, etc.

Al
Electromen wrote on 4/5/2004, 5:23 AM
Pricing: What are people willing to pay?
What are other people in your area charging for the same service? Base it on that, Supply/Demand. Hourly rates are one way to go, but not always the most profitable. Try putting together packages of your services, Ex: 100 slides restored, edited, put to music, burned to DVD = $ ?

This way you don't have to explain why it took so long. As you become more efficient, you become more profitable. It may take a while to make good money. A faster scanner (firewire) may pay for itself in a few jobs. Maybe buy a new computer.
Keep track of costs and time, job cost each project. Once a quarter look at your pricing and adjust it according to sales vs demand. Too busy? increase your price

Purchase Training Videos such as Class on Demand to increase your knowledge and ability. Consider buying Vegas 4.0 + DVD You can buy it from Videoguys.com with 6 hours of Training Video for $699

I do not edit for a living. I am an electrical contractor. I use Vegas to make DVD presentations of work I've done and show people what is available.

I bought a new computer, scanner, DV camcorder, Screenblast, Vegas, and Sound Forge. I spent several thousand dollars since December. I have already seen an increase in sales, I estimate everything to pay for itself in about six months. After that it will be several thousand more it profit every six months.

Best advice:
Be honest
If someone is not happy with the product, don't charge them.
Don't give them a copy of the DVD until they're paid in full.
Pay your taxes on time, yes you must pay taxes on this income, which may include a local business privledge tax and other business taxes.
Write off all of you purchases.
Consider using Quickbooks to keep track of business
Open a seperate business checking account
njnj wrote on 4/6/2004, 7:16 AM
Funny how you bring up taxes.

Here's my situation: I work a full-time job & only do videography & editing on the side. Since November, I've spent approx. $10,000 on video & editing equipment. By June, I will spend another $5,000 to add on to & upgrade what I have. I've done 9 videos since November, but all the money I earned is just going towards paying off what I spent on equipment & upgrading. So, I estimate it'll take me many more mths just to break even.

Since I'm only doing this on the side & haven't even made a profit, am I still obligated to pay taxes? Am I qualified for the local business tax priveledge as you mentioned?

Let me know.




Electromen wrote on 4/6/2004, 2:11 PM
I am NOT a tax expert. But I have been is business for over 20 years. For questions like that I ask my accountant, who IS a tax expert. If you do not use an accountant, find one. A good accountant will make you money, by saving you taxes.

I can give you an example of what I do know:

Always report all income, not to do so is fraud. In your situation you wiil be able to reduce your personal taxes. Did you file taxes for 2003 yet? If you did you can send an amended return, if you didn't, hurry up or file for an extension, but ask a CPA first.

Let's say in the year 2003 you have receipts for equipment, software, media, phone calls, advertising, internet service, vehicle, office space, insurance, postage, etc. totalling $10,000
Your income from this business was $2,000
Your net loss was $8,000

Let's say at your full time job you made $30,000
You only have to pay taxes on $22,000
$30,000 minus $8,000 = $22,000

The federal government will accept a business to loose money for the first five years, after that you better show a profit.

This would reduce your federal, state and local taxes. Sometimes a business privledge tax is based on business gross income, regardless of profit or loss. In the example above the business grossed $2,000. Let's say the tax is .1% of gross, the tax would be $2

Contact your Better Business Bureau, Small Business Administration or other agencies for help. Sometimes retired businessmen will offer free advice or be a mentor, just to keep busy and make new friends.

My next door neighbor is 78 years old and a retired executive from Westinghouse. He always gives me good advice about business and the best part is he loves to drink beer.

Interesting thing - being honest about income, just saved you tax money for 2003. Probably will save you money in 2004.

When you start making good money, don't complain about paying taxes, buy a new computer, write it off.

Let me know how it works out, Greg