I was just on a forum reading about the unfortunate events that have happened to a photographer. Basically, his airlines for a destination wedding went out of business. He was out the airfare and the other options were for thousands of dollars that he didn’t have. I completely feel for this guy, who is a real nice person and got stuck with a bill for thousands that he wasn’t expecting. My issue, which is cold and callous, is that no one running a business should ever have so little cash on hand!
When I am consulting with photographers that are starting their businesses, I always recommend that they keep 6 months of all their expenses in the bank. Not in stocks, bonds, real estate, or anything else that can make it inaccessible or could take a nose-dive in value. You can call this your “rainy day” fund, or be more realistic like myself and call it your “Oh, crap I broke my hand and can’t hold a camera fund.”
Often, when I propose this idea, I get the reaction that it would be hard or impossible to save that kind of money. Followed by horrified reactions when I explain that a BMW is not a necessity. Or that eating out is optional. Or they try not drinking coffee at Starbucks and brewing their own at home. So…stop buying cameras, lenses, monitors, computers, drive an old Kia, whatever it takes to get your rainy day fund so that you can afford to be in business on a bad day.
Great article! Thanks for the advice!