Re: Wedding nightmare...hope this never happens to anyone here
 

That last post was great. Very insightful and logical. Thank you very much.

Re: Wedding nightmare...hope this never happens to anyone here
 

You are only really running a business if all of your costs and overheads are covered by your income from paying clients. This including repayments on start-up or development loans and insurance (where is where this thread took a swerve) as well as your salary. If you rely on subsidising any aspect from personal wealth or the income from a second or third employment then it is not a viable business, more a lucrative hobby.
If you want to check how you should rate your charges to have business success there are some useful calculators in this thread.

http://www.dvinfo.net/forum/taking-c...rate-help.html

Re: Wedding nightmare...hope this never happens to anyone here
 

Absolutely right George. That definition should stand as the benchmark.

Re: Wedding nightmare...hope this never happens to anyone here
 

I disagree.

Reason is simple: Most business in the beginning will have very little, if any, operating costs covered by clients. This is called initial capital investment (on top of your time investment). Yes, the goal is to eventually have everything covered by clients, but in the beginning, this is unlikely unless you're very lucky.

That said, it would be stupid to go out and keep losing money over and over on each gig. It's a calculated risk in which you've decided that losing some money upfront will mean more profit down the line. How much you lose upfront in exchange for potential future growth/gain/profit is a personal decision.

Deciding to lose money upfront in no way relegates you to a "hobbyist."

Re: Wedding nightmare...hope this never happens to anyone here
 

Actually Zhong I don't think there's any difference between your view and mine and George's except that you correctly cite the start up phase of the business development as a phase during which one is investing to establish the business and George and I were referring to the ongoing business.

Re: Wedding nightmare...hope this never happens to anyone here
 

If you are in the start up phase of any business, under-capitalization is a common problem. Doing a few free gigs and reduced rate gigs to build one’s reel is a common practice, but after a while you need to avoid them like the plague. You’re killing any referral business from the clients because the people who will be calling will want the same smoking deal. The more work you do the worse it gets. You will start losing money in “volume”.

The difference in opinion you are getting is the difference in being part time or self-employed.

When you are self employed you pay everything with OPM. (Other people’s money). Your house, car, equipment, lunch for clients, EVERYTHING that you do, consume or own is paid by customers of yours. Go on vacation? Thank you Mr. Customer. For those of us in that crowd the customer always pays. It’s not wrong, it’s self-employment.