Pennies make pounds

The less it costs you to produce and sell pictures, the more profit you'll have to show for your efforts. Lee Frost offers some tips on how to keep your costs to a minimum - and make use of other people's money.
Being a native Yorkshireman it's part of my genetic make-up to save money whenever the opportunity presents itself. 'Short arms and deep pockets' is a phrase that has been muttered to me more than once, and although that's probably stretching the truth a little - anyone who knows me will vouch for my undying generosity - I will admit that when it comes to money, I can't abide waste. What's the point? Why work hard to earn the stuff then waste it?
This philosophy probably has a lot to do with the fact that when I launched myself into a freelance career I had the princely sum of 500 in the bank and a mortgage to pay, so I had no alternative but think about what my money was being spent on if I wanted to survive for more than a few weeks.
Ten years on I can afford to be a little more extravagant, but getting from there to here hasn't been the smoothest of rides and I never lose sight of the fact that when you're freelance, sources of income can vanish just as quickly as they appeared in the first place, so I never count my chickens and I still count the pennies.

Here are a few cost-saving ideas that I've picked-up along the way.

1 Don't buy what you don't need
Although it may be tempting, avoid spending large amounts of money on pieces of equipment that you will never use. You may like the idea of buying the latest Hasselblad, for example, but if the 20-year old model you're currently using is still doing a good job, what's the point? A newer camera won't take better pictures - but its cost has to be re-cooped through sales of your work so you will end-up making money to pay for something that you don't need.
The same applies with any item of equipment. There's a limit to how much gear you can carry and you need surprisingly little to take saleable pictures, so don't buy something just because you think you will need it - chances are you won't and it will sit in a cupboard gathering dust while you're out taking pictures to pay for it.

2 Shop around
If you do need to invest in new equipment, don't just buy it from the first dealer you happen upon. Shop around for the best prices, play dealers off against one another and you'll be surprised how the price can plummet. High Street outlets rarely offer the best prices. Look at the adverts in photographic magazines - dealers such as Robert White in Poole and Mifsud Photographic in Brixham can rarely be beaten on price. On-line shopping is also becoming more popular and sometimes you can save even more money by doing this.

3 Buy now pay later
If you can purchase equipment now and pay for it in six, nine or 12 months interest-free, do it. Even if you can afford to pay cash up-front, leave the money in your bank account accruing interest if you don't have to hand it over straight away. Most of my big equipment purchases have been done in this way, or by paying monthly over a year or two, interest-free, so that the items I have purchased can be paying for themselves before I've actually paid for them.
If interest-free purchase isnt offered on an item you fancy, ask some pro dealers will do special deals rather than lose custom, and they get their money from the finance company so everyones laughing.

4 Lease rather than buy
Leasing equipment such as cameras, lenses, lighting and computers is becoming more popular now, with finance companies such as Photo & General specialising in it.
The way it works is that you make payments to the leasing company by monthly direct debit for a specified period of time - usually one year or more. At the end of it, the equipment is yours to keep. It's a bit like taking out a bank loan or HP agreement at a low interest rate, only leasing offers better tax benefits because you can claim tax relief on the full amount you pay each month.

5 Get yourself VAT registered
This was discussed in more detail last month, so read Pay Your Dues part 2 if you haven't already done so. Basically, if your income from photography has reached a reasonable level then it's worth getting your business VAT registered so you can claim the VAT part of all your expenses back, where VAT has been added. Film, processing, fuel, stationary, photographic equipment, computer hardware, software and peripherals - all these things and more have VAT included in the price which you can claim back from Customs and Excise. If you pay 235 for a new lens, for example, 35 of that is VAT so in real terms you only pay 200. Over the course of a year this can save you hundreds, if not thousands, of pounds.
In return for this benefit you have to add VAT to all your invoices. Every three months you then have to calculate how much VAT you've received as part of invoices paid, how much you've spent on VAT, find the difference between the two and pay it (or occasionally reclaim it) from Customs and Excise.
You can't lose if you are dealing with publishers, businesses and so on as they will all be VAT registered so they can claim back all the VAT you charge them when you submit an invoice. The only time being VAT registered can back fire is if you specialise in weddings and portraiture where you are doing work for members of the public and have to add 17.5% to your bill for VAT which they can't claim back.

6 Material costs
One of your biggest expenses over the course of a year will be film and processing, so look at ways of reducing the cost.
Mail order companies offer the best prices for film these days, and you can save a huge amount compared to High Street prices. If you're not VAT registered, the Guernsey-based companies can't be beaten as there's no VAT in the Channel Islands. If you are VAT registered, compare these prices with VAT-inclusive prices from companies based on the UK mainland - I use Mailshots in Stoke-on-Trent - to see which one is the cheapest. Most will price-match, especially if you are a regular customer or making a bulk purchase. Speaking of which, if you buy 50 or 100 rolls you're going to get a better prices than if you buy ten and if a deal isnt offered to you on bulk purchases, ask for one 10% off is fairly common. Ask about batteries, ink cartridges for printers, inkjet paper and other materials you need too - you can save a fortune.
Another way of saving money on film is to watch out for late-dated stock being sold off cheap because the expiry dates has just passed. You can pick up film for half price or less, but if it has been refrigerated it will be fine for a good year or two beyond the expiry date.
With processing, my advice is to find a friendly local lab and sort out a price deal with them based on the number of rolls you take-in for processing. For E-6 process only I pay just 2.50 per roll for 1-9 rolls, 2.00 for 10-50 and 1.50 for more than 50. It therefore pays for me to wait until I have at least ten rolls of film as I will save 50p per roll. It's not often that I have more than 50 rolls, but when I do the cost-save is significant.

7 Buy in bulk
Anything that you use on a regular basis can be purchased much cheaper if you buy a large quantity of it. One A3-sized padded envelope may cost you 75p, for example, but if you buy a box of 50 the unit price will go down by half. Same with envelopes, paper for tapping out letters and invoices, paperclips, rubber bands and so on. General stationary supplies are best purchased from large outlets such as Office World, or from mail order companies such as Viking Direct.

8 Cost cutting

• Get your telephone connected up with a cheap call service - why pay 8p per minute for a call when you can get it for 2.5p?
• Don't pay for Internet access and email if you can get it for free.
• Open a personal bank account for your freelance activities rather than a business account - the latter will incur monthly fees and charges whereas the former won't.
• If you have a business bank account and pay for every cheque, switch transaction and so on, pay for things using a credit card then settle the bill every month youll only incur the cost of one cheque instead of loads, and the annual saving will run into hundreds of pounds in saved bank charges.
• Use a credit card provider that offers a low rate of interest - many now give almost 0% interest on balance transfers for the first six months.
• If you need to take a train for a job, book it in advance and you'll get a cheaper fare.
• Same with flights - budget airlines such as Go and Ryan Air offer the best deals if your book on-line well in advance.
• Keep your receipts. You can't claim tax relief or VAT on a purchase unless you have a receipt to show for it, so keep those pesky bits of paper safe and you'll also keep your tax bill down.