(Applicable to any business that is service based but requires equipment or tools to perform that service, ie, photography, make-up, construction, remodeling, couriers, cleaning crews, mechanics, film-makers, etc. Though I write about photography, think with the concepts toward your own industry).
Many people in the industry of photography who are just starting out get the idea they need to have the very best and the most of it, in order to run a business. They want to start with all the best gear, because the people they emulate are at that level. It's logical then to need to have the same. Great if you have 10-20-30k laying around you don't have earmarked. But realistically, you're like most others or worse, you're a starving artist and you just don't have the extra thousands in your piggy bank.
There is some truth to the above about gear but there is also a lie or misconception embedded into it which has served to keep people broke and unsuccessful, at least in regards to photography, certainly as well in other industries.
Expansion toward have all that nice gear is something that can be done and there are a few ways to achieve it. The mechanics of getting there may impose a greater hardship if you do things out of sequence or omit steps. My goal here is to propose an even-keeled approach. The 3 following points are usually how I look at purchasing more equipment for any business:
1) Reality as it is now.
2) Reality as it would be when ideal (defined by you).
3) Income, growth and investment equation (return on investment).
Earlier headshot, 2 lights. This background has a wide range of uses and looks (used in the 2 other dark background photos below).
Reality as it is now:
This is simply what do you have now? Remember we are talking about the necessary gear to be able to perform.
Let's say for the sake of simplicity and as an example you want to be a photographer that shoots headshots.
Ok, so what do you already have that is needed and what do you NEED to have in order to shoot an acceptable product?
As photographers we often get hung up on the word "acceptable". If you're like me at all you may, from time to time look at your portfolio, think it should be junked and that you should perhaps consider a new line of work. But I think that's probably the ever eternal and internal conflict of an artist. Last year I touched on the concept of the fact that there are no limits, only plateaus ... I feel as strongly about that now as I did then in regard to my ability to make an image that is "acceptable".
But this criteria "acceptable" can also hold you back because often it's defined differently by you than your customer. In fact, you will likely find that, especially as it relates to photography, people's "acceptable" scale widely varies.
Another earlier headshot. 1 umbrella'd light, 1 collapsible background. 1 camera and $350 lens. (Location: living room)
Reality as it would be when ideal (defined by you).
So ideally maybe you want a studio, 6 lights, 3 cameras, 16 lenses, 3 computers, 25 different light modifiers, etc etc etc. These are things that you should clearly define before you get going into your business. Why? Because one could say that the ideal situation you long for is your "goal" ... and it's nice to have goals.
How do you find what is ideal for you? By combining two things, the necessary equipment to produce a wide range of imagery in your chosen niche combined with your personal taste or desire.
Between "reality as it is" and "reality as it would be when ideal" you have a gap and you must cross that. You can only do that by a proper strategy, realistic targets and following a basic plan and program (of which this writing isn't really addressing, this is more like a primer to adjust your thinking toward that direction).
A headshot 2 years after the one above. 3 lights, 1 camera/lens. White seamless. (Still done in my house).
Income, growth and investment equation.
Viability is the first consideration. You need to start making money, so if you have a camera, a lens and window, start making the headshots. Focus more on engaging and eliciting looks from your customer as opposed to focusing on what you don't have. A nice camera will not CREATE the "look" or emotion in an image, only the artist who has engaged their subject can do that.
I think a lot of creatives get into the idea that they have to have something in order to do something. But that's usually not the case. All you really need is the "minimum requirements" in the gear department. But don't think you need the very best in order to start DOING.
Next, as you grow as a company with your income increasing, start to reinvest in your ability to deliver more. But this is where people will start to sink all of their money into gear.
I recommend a different approach. The split percent will vary based on your personal needs and industry. I recommend if you don't know and need help then find a business mentor or contact someone knowledgeable on doing this.
First, I wouldn't budget all of my money toward the acquisition of gear. If you got by without using it, ie you didn't REALLY need it on your last 5 shoots then what makes you think buying it now is a good investment? Only purchase the things that will result in more income. For example, a couple of years ago I was debating between purchasing two lenses. A super wide angle and a mid-range telephoto that would be PERFECT for portraits. I solved the dilemma by asking myself one question. What is the return on investment for each lens? Which lens will allow me to make more money NOW? Solved. (To those curious: I purchased the tele to use for portraits, I purchased the super-wide before going to the park.)
Instead of sinking 100% or even 90% into gear for all the reasons that we do it (lust, envy, greed ...) consider investing a good portion of your income toward other services that will inflate your business. Marketing help, a better website, tax advice, a software to keep track of clients easier or better, promotion, even a location other than your living room might be wise. Some professionals don't want to come to people's houses for their photography session, and sometimes it's best to divide your personal space with your work space for the sake of sanity, orderliness and a division of work-time versus relax time.
Recent headshot. Collapsable background as first shot. 2 lights? I forget, I was in a rush because the studio got overbooked.
Remember these few important points. You can HAVE the best gear in the world. But the customer doesn't give two shits so long as you can produce what they want. And often you can produce what they want with what you already have (your applied knowledge to your current gear is senior always to having great gear and not knowing it's limitations or fully how to use it). You won't be hired if no one knows who you are or where you are or what you do. So again, you can be sitting there in a closet with the best gear in the world. We know at that point where you invested your money.
More on this at a later time.