Introduction • Defining your work and your offer
• Income streams, price and value • Costing and setting a daily rate • Legal structures and paying tax • Planning and budgets • Building a profile
• Next steps and further sources of help
maintain motivation
sustain your business
Defining your work • What sort of work do we create?
• Who do we create it for? • Where do we show it? • How do we pay for it?
What you create
Have/need list
description
inspiration
skills
school
biog cv
influences
field
“the pitch”
process
artist’s statement
context
materials
format/s
product
quotes & reviews
techniques
value
genre/s
range
documentation
Who you create it for
public services
community
general public
tourists
individuals
local authorities
corporate clients
social & professional networks investors
local audience
export market
collectors
critics
age groups
schools
academics
peers
showcases
directories
trade fairs
programmes
Where you show it festivals
publications
venues
symposiums
community spaces
competitions & awards
corporate spaces
open submissions
© Cultural Enterprise Office 2005
programmers distributors curators
directors cultural co-ordinators arts development officers professional associations
registers websites screenings broadcasts conferences
public spaces scratch nights social & professional networks
artist’s groups industry players
agents promoters
commissioners
Income streams, value and price • How do we pay for it? • Income streams
sales
commissions grant funding donations loans in kind support
fees investment
royalties
crowd funding
employment
sponsorship
bank interest
How do we pay for it? • Income streams
Considering value & income streams
corporate design fee
one off / bespoke commission domestic design fee gallery shop retail
workshops & classes production pieces licensing royalties
Visual art, craft & design income streams
new writing commission headline tour corporate gig
session work support slot workshops & classes royalties merchandise regular gig slot
Music income streams
downloads
Considering value & income streams
Adoption lifecycle
Number of Customers / Size of Audience
Considering value & income streams
Costing and setting a daily rate • Costing • Daily rate
Value
*Personal drawings for self employed, royalties, payments & shares
Costing your daily rate
Overheads plus Salary
Days per year
Holidays
Contin -gency
Admin
Total days available
Weekends
no admin time
£27,000
365
104
30
5
0
226
£119
£15
admin at 25%
£27,000
365
104
30
5
56
170
£159
£20
admin at 40%
£27,000
365
104
30
5
90
136
£199
£25
Costing your daily rate
Daily Hourly Rate Rate
Legal structures and paying tax
Structures • Freelancer • Self employed
• Sole trader • Limited company • Charity • Social enterprise
Self Employed Scottish Charitable Incorporated Organisation
Company Limited by Guarantee
Partnership Limited Liability Partnership
Community Interest Company
Company Limited by Shares
who you answer to
who you register with
who you answer to
who you register with
You are your business and have personal liability
Self employment
You are your business and have personal liability
Self employment
You are your business and have personal liability
Self employment
You are your business and have personal liability
Self employment
You are your business and have personal liability
ÂŁ
Self employment
Self employment timeline • Register with HMRC on commencing trading • Set up book keeping system (and appoint an accountant?) • Reconcile finances regularly • Register to do return online • 6 April – New financial tax year
£ £
Self employment
Invoice Jess Hunter 21 Brookbank Gardens Glasgow G12 8FG Tel: 0141 555 1234
The Tron Theatre 83 Trongate Glasgow G1 8DL Invoice No. 106 Date: 23 December 2014
UTR: 0123456789
Services Provided:
Costume design on the production of ‘The Little Mermaid’ Christmas Show 2014 Agreed fee: Expenses (receipts attached) Total
£1,500.00 £432.15 £1,932.15
Terms: 28 days from date of invoice. Please make cheques payable to ‘J Hunter’ at the above address or BACS transfer to the following account: Sort Code: 83-12-34
Account Number: 00333555
Please support small businesses with prompt payment.
£ £
£
Self employment
£
£ £
£
Self employment
£
Self employment timeline • Notices to complete tax return issued • Prepare accounts from start date to 31 March
• 31 October – deadline for paper returns
National Insurance
Income Tax
Class 2 contributions
Basic personal allowance
£2.75 per week
£10,000
Class 4 contributions
Basic rate tax (£0 - £31,865)
9% of annual profits over £7,956
20%
Small Earnings Exception
Higher rate tax (above £31,866)
£5,885
40%
Tax Year 2014-15
Annual Income Less work-related costs Net profit for tax Less personal tax allowance
£ 27,000.00 - £8,500.00 £ 18,500.00 - £10,000.00
Taxable Profit
£8,500.00
Basic Rate Tax on £8,500 @ 20% Class 4 NI ((£18,500- £7,956) @ 9%) Total 2014-15 bill (due 31 Jan 2016)
£1,700.00 £948.96 £2,648.96
1st instalment of 2015-16 bill (50% estimate) £1,324.48 Total payable at 31 Jan 2016 £3,973.44
Tax & NI Calculation, 2014/15 Accounts
Self employment timeline • Submit online return
• Pay tax bill • 31 January – final deadline for paying tax bill (and 1st payment on account)
Partners are jointly and severally liable
Partnership
Partnership
ÂŁ
Partnership
£ £
Partnership
£
£ £
Partnership
£
£
£ £
Partnership
£
£
£ £
Partnership
£
£
Limited Company
• Non-profit distributing
• Profit distributing
• Social, public or charitable aims
• Commercial aims
• Liability limited to amount guaranteed by board members
• Liability limited to directors’ shares
• Often adopted when seeking public finance
• Often adopted when seeking private finance
Limited Company
The company has the liability but the directors are accountable
Limited Company
Limited Company
Limited Company
LIMITED COMPANY
Limited Company
£
LIMITED COMPANY
Limited Company
£
Which structure? • Level of risk, responsibility and ownership employee, employer or owner • Flexibility and security for personal future, IP and that of the Company • Will you be able to manage your money and draw an income in a way that suits your circumstances? • Level of Administration • Will you really gain from fundraising opportunities? • Could you use a ‘godparent’?
Planning and budgets
Gain teaching qualification
Build on previous work
Fudge presentation due to nervousness Do some more courses
Relearn how to draw / paint etc
Drink a lot of wine Get lost trying to find college
Do some work! Get some sort of portfolio together Now
Pay application fee
Use year’s experience and top notch slides at ace interview
Make better portfolio
Re-apply through GTTR
Deal with crushing sense of rejection
Attend interviews Put slides upside down in carousel
Take slides
Work like a dog for a year
Take better slides
Write out that form again
Organise referees
Drink a lot of coffee
Gain teaching qualification
Motivation Materials, time, Work like a space, money, dog for a ideas year Nervousness Build on Use year’s previous work Fudge experience and top £12 presentation due Drink a lot of Pay notch slides at ace to nervousness coffee Materials application interview money Coffee fee Experience, top Wine Make better Do some notch slideshow portfolio more courses Drink a lot of wine Re-apply Take better Materials through slides Get lost Slide film, tripod GTTR trying to find Relearn how to college Deal with draw / paint crushing sense Write out that etc Ideas, of rejection form again space, time Friends/colleagues Attend Do some who lie, time, Patience, interviews Organise work! patience wine referees Put slides Get some sort upside down in of portfolio carousel together Now
Take slides Slide film
£
Income Revenue Grant Project Grants Workshop Fees Bank Interest Total Income Expenditure Direct/Project Costs Materials Equipment Hire Packing & Transport Tapes & Cables Project Staffing Overheads Staffing Costs Rent, Rates & Insurance Power & Heat Telephones & IT Travel & Subsistence Stationery & Postage Press & Publicity Legal & Accountancy Fees Bank Charges
Theatre company: Project budget
Sub total Expenditure Plus 5% contingency Total Expenditure Net Surplus/-Deficit
20,000 12,000 3,650 50 35,700
8,000 2,000 300 700 3,000 14,000 12,000 5,000 500 700 300 450 450 500 100 20,000 34,000 1,700 35,700 £0
Gain teaching qualification
Motivation Materials, time, Work like a space, money, Jan dog for a ideas year Nervousness Build on Use year’s previous work Fudge experience and top £12 presentation due Drink a lot of Pay notch slides at ace to nervousness coffee Materials application interview money Coffee fee Experience, top Wine Make better Do some notch slideshow portfolio more courses Drink a lot of wine Re-apply Take better Sept Materials through slides Get lost Slide film, tripod GTTR trying to find Relearn how to college Deal with draw / paint Jan crushing sense Write out that etc Ideas, of rejection form again space, time Friends/colleagues Attend Do some who lie, time, Patience, interviews Organise work! patience wine referees Put slides Get some sort upside down in of portfolio carousel together Now
Take slides Slide film
Milestones • Keep you and others on track • Clarify (contractual) expectations • Act as payment triggers
April
May
June
July
Aug
Total
Sept
CASH RECEIPTS Design Fees
2000
1000
Workshop Fees Lecturing
3000 250
250
250
250
250
3,000 250
Fashion Shows Start-up Grant
1,500 0
1200
1,200
Bank Interest Loan income
3,000
0 500 1950
500 2250
250
250
3250
1250
9200
CASH PAYMENTS Materials (workshops)
950
Studio rent & electricity
120
Tools & equipment
500
500
Insurance
344
344
Tel, postage & stat.
30
120
30
120
950
30
120
30
120
30
120
30
720
180
Tax advisor
0
Party & invites
0
Bank charges National Insurance
4
4
4
4
4
4
24
11
11
11
11
11
11
66
Loan repayments
0
Transfer to savings acct
0
Transfer to personal acct Net Cash Flow Opening Bank Balance Closing Bank Balance
800
800
800
800
800
800
4,800
1809
965
1915
965
965
965
7584
1285 -1665
-715
2285
285
141 0
141
1426
-239
-954
1331
141
1426
-239
-954
1331
1616
Costume designer: 6 month cash flow
Building a profile • Who are you connecting with? • Who you’ve worked with and who you want to work with • Advocates, promoters and media • Keeping in touch
• ‘Customer care’ and reputation
What will you do now? • Set yourself 3 actions
Next steps • How to Contact the Press & Media • Documenting & Presenting Your Work • Planning Your Web Presence • Costing & Pricing Work
• A Guide to Funding & Financing • Funding Sources • Making Applications & Proposals • Legal Structures Guide
Next steps • Cash Flow Guide • Budgets Guide • A Guide to Starting a Business Plan • Business Plan Contents Guide • How to Contact the Press & Media • Market Day Workbooks
Next steps • Creating Contacts Workshop • Presentation Skills Workshop
• Making Applications & Proposals Workshop • Planning Your Time and Project Workshop • Market Day Workshop
Supporting creative businesses throughout Scotland Enquiry Line: 0333 999 7989 Weekday: Mon-Fri: 09:00-17:00 Evening: Wed: 17:00-20:00 ..
info@culturalenterpriseoffice.co.uk www.culturalenterpriseoffice.co.uk www.facebook.com/ceoscotland @ceoscotland
Please note: Clients and other organisations have kindly given permission for Cultural Enterprise Office to use some content only within the workshop. Therefore some of the slides shown in the workshop are not reproduced in this document. Where possible we have attributed the source of the content in the presentation for clients to research further.