Episode 49: What to Do When You are Hit With a Large Unexpected Expense

It happens to all of us at some point in our photography business.

The dreaded, unexpected, huge photography expense that we don’t see coming and have no idea how to pay for. 

About 10 years ago I got a call from my accountant.

He told me news that could have put me out of business: I owed $90,000 in taxes.

“What? I don’t have that money. How could I owe it? I said.

After I hung up the phone, the room was spinning and I was breathing hard.

I kept thinking, “How could this happen? How could I not know? What am I going to tell my husband? I feel like such a failure.” 

I did not sleep that night and the next morning I called my banker and got a very high-interest rate loan.

This was the first time I was hit with a huge photography expense, but it wasn’t the last. 

Unexpected Photography Expenses Are Just a Part of Business

A few months ago at our huge, 3 day event, Go Boutique Live, we had 1200 boxes full of swag that we were mailing to each attendee of the event. 

We were planning to ship these boxes with ground shipping, but there was a massive storm in Texas where our warehouse is.

The boxes couldn’t ship until the storm blew over, and by that time, we had to overnight ship 1200 heavy boxes in order for them to arrive on time. 

When I got the warehouse and shipping bill, it was just under $100,000.

I didn’t lose one second of sleep or stress about this, because I have learned what to do when I am hit with an unexpected photography expense.

Throughout my years in business, I’ve realized that dealing with unexpected financial issues is a muscle.

Unfortunately, the only way to build that muscle is to use it.

This can be painful, but eventually, the things that seem big will seem like nothing.

I want to share this growth with you, so next time you’re faced with an unexpected photography expense you can handle it like a pro. 

Here are the 6 steps to go through when this happens in your photography business.

Step #1 Believe In Yourself

I remind myself that I have the skills to dig my business out of any hole.

I have made money before, and I know I can do it again.

I’ve invested in myself with personal development and tactical skills.

I have confidence that I can get out of any situation. 

Sure, I may have to go back to shooting from my home instead of my studio or reduce my staff and overhead, but I know that I started with nothing and can build my business again.

So can you.

Step #2 Let Money Solve Your Problems

There’s a lot of problems in life that we can’t solve with money.

If there is a problem that can be solved with money, do it.

Let go of emotion, and dig yourself out of the hole.

When my boxes were delayed because of the weather I thought,

“I can freak out, or I can use money to solve this problem.”

I have an abundance mindset and I believe that it will all work out.

Instead of feeling bad about spending $100,000 on shipping, it felt good to solve the problem.

Step #3 Live Below Your Means

When my husband and I got married, we decided that we don’t want to live our lives with maxed-out credit cards, spending every penny we earned.

Early on, I learned that one of the biggest things people fight about is money. I thought,

“Money is a thing that we have control over, I don’t want to fight about it with Joe ever.”

Living below your means will allow you to say yes to things that will help your business, marriage, children, and family.

Make the decision today to start living under your budget.

Step #4 Build A Liquid Cash Reserve

After my unexpected $90,000 tax bill, my husband and I lived very frugally until I paid back the loan.

Every penny I made went to paying it off.

Every single penny.

After it was paid off I thought,

“We’ve adjusted to this lifestyle. Why don’t we keep living this way and build up a cash reserve, so that if this happens again we can easily pay for it.”

That’s exactly what we did.

As my company payroll grows, I make sure I have a bigger and bigger cash reserve each year.

My goal is to never be stuck with an unforeseen bill that I can’t pay.

Keeping a liquid cash reserve gives me peace of mind about possible photography business expenses.

Step #5 Bank Local

Moving to a local bank where I have a relationship with the banker has helped my business tremendously.

I value relationships, so banking local with someone I could build a relationship with made sense.

When I first met my banker he said,

“I’m the easy button. You don’t have to go through layers of work like at big banks.”

Now, when I email him about something I need, he does it easily.

It’s amazing.

Local bankers are going to jump in and help you way faster than the giant banks who will serve their giant clients first.

When you have that relationship, they’re going to help you out.

If you aren’t banking at a local bank make that a priority. 

Step #6 Have A Back Pocket

You always hear me talk about keeping your family in your front pocket, and not going to them with your business problems.

If you haven’t heard me talk about that, listen to episode seven.

Your back pocket should be for your community and mentors.

My back pocket is full of other entrepreneurs who are ahead of me.

People who are doing what I’m doing and understand how hard it is.

Many of these people have gone before me and are walking alongside me.

We’re all doing this together.

These are people who can immediately put the money losses, risks, and failures into perspective. 

There will always be more money.

You’re never going to be an entrepreneur without some bumps in the road, and I think that’s why people like us are attracted to being our own boss.

We can do what we love and have the freedom and flexibility to put our family first.

I believe in you.

Keep taking risks.

Build that muscle and keep going.

That muscle will get stronger and you will be a better entrepreneur because of it.

Keep showing up because money is just a thing, and there will always be more of it. 

If a giant unexpected photography expense hits you before you build up a cash reserve, take a breath and make a plan.

Remind yourself that you have the ability to get this paid off.

It may mean getting an extra part-time job, canceling your summer pool membership, and teaching your kids to run through a sprinkler for the summer, but it is worth it.

These things grow us as humans and build muscles that we need to survive as entrepreneurs.

When you’re done paying back your preverbal $90,000 tax bill, or an unexpected shipping expense, you will build up a cash reserve.

The next time it happens it won’t hurt nearly as much.

I promise.

follow boutique photographer sarah petty on instagram to learn more about the boutique photography timeline

Working photographer, coach, mama, and wife. Whether you’re looking to take your photography business full-time or simply make good money on a very part-time basis so you can contribute to your family financially and be your best self, we’ve got something for you.

I’m Sarah Petty

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