Business Friday: Put a Line of Credit in Your Christmas Stocking

Here it is with just two or three (depending on your state’s “blue laws”) shopping days before Christmas and your balance sheet is pretty much set in rapidly hardening concrete. Let’s hope you’ve been nice and not naughty and didn’t overdo spending. It’s too easy to get caught up in the trappings of success when you haven’t quite made it yet. Yeah, I know your copy of TurboTax told you if you bought that British Racing Green Range Rover Uncle Samuel is gonna kick back two hundred bucks on each lease payment but it didn’t tell you who was going to send the $900 payment each month while you wait for the effect of that tax break to kick in.

If you don’t already know this, have a sign a put it above your desk that reads: Nothing kills a professional photography operation faster than high debt load. Yet there are times when you need to spend money and there’s no income. What’s a poor photographer to do? If you don’t already have a line of credit with your bank, now is the time to get one. Whip one together before your banker looses the Christmas spirit and tightens credit on business loans.

Whatever you do: Don’t blow that line of credit on goodies. I watched one talented photographer get a line of credit and spend it on non-essential items that made him look successful but he didn’t have anything left when the business hit a slack period. Later, I watched the Sheriff padlock his office doors and the IRS post notices for not paying his tax bills but boy his custom made furniture looked great through the glass doors covered with notices from his landlord shutting him down. Don’t let this happen to you.

Even the smallest line of credit the bank will grant is better than wondering how you’re going to meet expenses after the holidays. My original business line of credit was $5,000 and you would have thought it was $500,000 because of the effect it had on me, my partner, and the studio. A line of credit means you don’t have to put off paying bills to your vendors. The worst thing that can happen to you is that you start treating your vendors with the same kind of vaguely disguised contempt that far too many business clients have for us. Some photographers can do that, but if you’ve been with me so far, I know you’re not that kind of photographer.

Next week, I’ll offer a few New Year’s Resolutions you should consider, in the meantime I’ll leave you with a Merry Christmas and something Ben Franklin should have said—“A penny spent is a penny that’s long gone.”

Author: Joe Farace

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