bcrawf wrote:
Well, this is a lot. Besides sales tax, a good point is to consider how payment is made, since the credit card route nicks you. I was surprised to see "depreciation" listed, since that is recovered on your tax returns.
Wise business owners set up depreciation savings accounts and put money in them equivalent to the depreciation allowance taken on their tax returns. The whole point of depreciation isn't to get a tax break, but to put money aside to replace aging, obsolete equipment. That's how the very best companies stay ahead of competitors... They are prepared to take advantage of whatever technological advances come down the 'pike.
Credit cards can be handled with an iPad or iPhone and a Square reader/Square account (or similar setup). Yes, there is a charge for the service, but individual sales average 12% to 20% higher when clients can pay with credit cards on the spot, rather than just cash. AND, you make more sales, period!
I think the point to be seen here is that if you do this, you can either plan to lose some money on it (consider it a donation), or attempt to make money on it (incurring the risk of loss due to insufficient sales and substantial expenses).
I worked for a school photography company for 33 years. In the 1980s and '90s, we used to make LOTS of money on Jr.-Sr. prom nights at high schools. We'd park a photographer or two there, with a formal setup and studio lighting. It was not uncommon to average $35 to $50 per PERSON, since we photographed and sold packages of prints to each individual, and to couples as well. Larger proms would yield (gross sales of) $10,000 or more.
Fast forward to the early 2000s... Digital cameras became available, and moms and dads everywhere were buying them. They began photographing the kids at home, before they went out to dinner. Our sales started sliding quickly towards the red zone. After a few years of iPhone and Android cameras getting good, our prom business was toast! Most of it was gone by 2012, when I left the lab.