A balance sheet is like taking a snapshot of everything your photography business owns and owes at a specific moment. Think of it as taking a photo of your business's financial position - just like you capture a moment in time with your camera.

It's divided into three main parts:

1. Assets (What You Own):
   • Your camera equipment (Canon R5, lenses, flashes)
   • Your computers and editing equipment
   • Money in your bank account
   • Money customers owe you for shoots
   • Studio space (if you own it)
   • Props and backdrops
2. Liabilities (What You Owe):
   • Camera gear loans or payment plans
   • Credit card debt for equipment
   • Studio mortgage or lease payments due
   • Money you owe to second shooters or anyone
   • Deposits from upcoming weddings
   • Money you owe to album suppliers
3. Equity (Your Investment + Profits):
   • Money you've put into the business
   • Profits you've kept in the business
   • Less any money you've taken out

Here is an example of a photographer's balance sheet:

The key thing to understand about a balance sheet is that it must always balance: Assets = Liabilities + Equity

In this example: $53,000 (Assets) = $23,000 (Liabilities) + $30,000 (Equity)

This balance sheet tells you important things about your photography business:

• You have $53,000 in total assets
• Customers owe you $4,500 for completed work
• You owe $23,000 in total (including loans and deposits)
• Your true business value (equity) is $30,000

This helps you:

• Track your gear investments
• Keep an eye on customer payments
• Manage your loans and deposits
• See how much value you've built in your business
• Make decisions about buying new equipment