A legal business is one that is operating within the laws of the local and federal government and one that pays taxes on money earned. Each state, county, or city will likely have different laws and requirements to be considered a legal business in good standing. A local CPA in your area can help you determine the best advice based on your personal situation of how to set up your business filing status, what licenses may be required, how to file taxes (sometimes quarterly), how to track your expenses, and what other tips you need to be a legal operating business that is sound in case of an audit in the future. 

Cost of Doing Business is a term you will see a lot in photography groups but perhaps you didn't know what it really meant. Just like ANY other business in existence you must know your operating costs in order to know what to charge. And you must charge enough to cover those costs, a small over head for emergencies, taxes, and a reasonable salary for yourself in order to be a profitable business and employee. If you're just starting you may not know what this number might be, or how to calculate it, but there are ways to figure a general rough estimate. And on the other side, if you've been in business for a few months or a few years and you're still not making what you would like or find yourself always trying to run a sales or pushing mini sessions to make ends meet, you're also not in tune with what your business actually costs to run. But that's hard right? I used to have the mindset that I had to spend money to make money in this industry. And buying props and client closet pieces was the only way I could do this. Well, while I do have some props and items in my client closet, there are still plenty of items I've sold or still sit unused because they were not a valuable purchase and didn't make the most of my business's money. Mistakes happen, but the more you are in tune with your business and where your money is going, the quicker you can adjust yourself to be profitable. 

Your. Time. Is. Valuable. And stuff costs money.

If you need more help, here is a basic equation you can use for a starting point

CODB + Salary 

Add 30% of that number to account for income or self employment taxes 
Add another 10-15% to that number to account for merchant fees, additional unexpected overhead, and business savings and sinking funds

The number you have is your current expected CODB 

Next, figure out what number of sessions you think it's achievable for you to take in a year. You can break this down by the month if your business is more seasonal versus steady month to month, but gather an overall number to your best estimate. 

Take your current expected CODB and divide by the number of sessions you're expecting to take in the year. 

The number you just calculated is the MINIMUM amount you should be charging to leave your house for any type of session. Are you shocked? Higher than you expected or lower? Remember, this is just a starting point to make sure you don't go into debt and actually turn some form of a profit. But if you've done run these numbers and find that your salary is being chipped away, then you didn't calculate your expenses correctly or over estimated the amount of sessions you would actually book in a year. Once you've been running your business and have a better outlook on your actual expenses and bookings, you'll have a much easier time actually calculating your bottom line and be more comfortable raising your salary for all your hard work. 

There are lots of costs I didn't realize I would have when I started my business with a website, camera, basic computer and about $3500. But on the flip side, I also didn't realize that once I became a legal business most of these I was able to write off on my taxes as well. But since I tracked every dollar and constantly adjusted my pricing I was able to NOT go into debt from my business which should always be your goal. Debt to start or maintain a business is not a good look for you, for the IRS, and definitely is NOT the goal when people start a business. So here are some things you may not have thought about when thinking about your CODB. 

Registering as an LLC, acquiring business license(s), permits
CPA for advice, remitting taxes quarterly, yearly and keeping your business on track
Liability and Equipment insurance
Contracts- Reviewed by a lawyer
Quality memory cards, replaced every couple years
Camera batteries, replaced every couple years
External hard drives, backup drives, one for every year of client's images
Software subscriptions 
Website subscription, both for a main website and for gallery delivery or image storage
Domain renewal
Marketing and Advertising 
Camera cleaning and lens calibration
Continuing Education, courses, workshops, mentorships, tutorials 
Merchant Fees on payment processing
Client Appreciation Gifts, Stationary and Postage
Office Supplies, things to stay organized
Props, Client Closet Wardrobe
Certain car expenses like regular maintenance
Sinking Funds (an amount set aside every month for future use for specific things): Any technology you use that will likely need to be repaired, replaced, or upgraded within a few years such as: computer, phone, camera bodies, lenses

Now this is a question you will definitely need to think on for yourself. Your time and your talent is valuable. People would not pay you to do what you do if they could do it theirselves, right? So when you think about salary you need to think about your experience, your level of work, your personal bills and "need" money, but also your future like savings and retirement, and most importantly your family. What is your time worth? If you're doing photography part time while you're working a full-time job you may think you only need a part time salary. But in fact, if you ever want your photography business to become a full time career or unless you want to spend that valuable free time working for pennies, you need to charge like this is a full-time job or to make your hustle of working every waking hour absolutely worth it. Even minimum wage in most places is equivalent to a salary of almost $20,000 a year. If you have a family you have to take in account what your child care costs are when you need to shoot and edit, just like you would with taking on any other job where you would be away from home. I also hear often (from women especially) that you don't need to make a profit from your photography business because your partner's income takes care of all they need, so this doesn't matter. My argument for that would be that as a partner if you're taking time away from your family to work, you should absolutely be contributing to the household income or savings. Otherwise, what is the point in investing your time in other people's families instead of your own? Your salary could put your kids through college, it could help them with a down payment on their first home, fund your retirement (or early retirement) plan, it could be the money that gives you guys an amazing family trip once or three times a year. Wouldn't that be amazing, to share those priceless memories with your family as the fruit of your labor? It could also pay off your house early, any debt your family might have, pay for your cars and toys in cash, it can fully fund your emergency fund, and it could be there if the unexpected happens. What happens if one of you does fall ill or lose your job? I urge you to not by shy or naive when thinking about your salary and compensation and to really look at what at least an entry level salary would be in your area and give yourself quarterly or yearly raises.

Marketing is a VAST term and methods of marketing and advertising depend on your niche, genre, editing style, ideal clientele, price point, and where you are located. Most people think that the only place to advertise is on social media such as Facebook and Instagram, but depending on your ideal client that may not be the best method for your business. Word of mouth is one of the most valuable, and that comes directly from client's you've already served. So from the beginning you need to make sure you're treating all your clients like they are your very best client. Give them the best service, turnaround time, and make sure their needs are met. When a client feels appreciated and well taken care of they are more likely to refer you to everyone they know. Other than word of mouth it's important to recognize that most people search the internet via a search engine when looking to hire a specific business, therefore a good functional website with strong search engine optimization is really important to show when a client searches for key terms that relate to what you do on Google. Social Media is another branch in which you can gain great traction with people recommending you to others, but a good website can ground that by giving you that credibility that people want to see when hiring someone for a service. Other places of advertising such as print, web, radio, etc are really dependent on who you serve and where your ideal client goes to find information and services that relate to them.