Notes from today's lecture, the sixth in the entire programme, presented by tutor Bridget- with key focus on starting a business, freelancing opportunities and taxation.
Enterprise//Lecture VI//DON'T JUST GET A JOB
why not?
- Next four lectures are about setting yourself up for business
- Very competitive in the creative job market- a great time (never been easier) to set up your own business
- Creative industries are now made up of much smaller (ten people or less) companies
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DISCLAIMER
'Start a business' terms used throughout the presentation include:
- Becoming a freelance designer
- A practicing artist
- Starting a collective of designers
- A collective commune in a squat
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JOHNNY CUPCAKES WITH BONGOBOY (INTERVIEW)
- Create a fun, engaging atmosphere
- "Johnny Cupcakes & The cupcake factory"
- Never studied business, marketing OR design
- LIMITED STOCK- Once it's gone, it's gone
ISSUES//JOHNNY CUPCAKES
Why start a business?
- Be passionate
- Collaborations (Disney & Warner Bros)
- 4P's:
- Product: T-Shirts
- Price: Regular & Limited Edition
- Promotions: US tour
- Place: "Fantasy bakery on steroids"
- Copyright matters
- Overseas trade
- TAKE A RISK
- Marketing- branding, scarcity, longevity
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GETTING STARTED//GROWING BUSINESS
- Do what you love
- Start your business as a student
- Don't do it alone, get advice and services of others
- Write a business plan
- Research
- Get legal and tax issues right first time
START YOUR BUSINESS
- Register your business name
- Find small business financing
BYTESTART & BETTER BUSINESS
- Company structure
- Skills
- Funding
- Competition
- Marketplace
- Why are you starting a business?
- Staff, employ people who are smarter than you!
- Biggest cause of failure, find out the largest causes of business failures
WHAT IS A BUSINESS PLAN?
- Where you're going
- What you're doing
- Why you're going
MISSION VALUES
Activity & skills required
OVERHEADS
Resources & equipment needed
MONITORING YOUR COMPETITION
Marketing, 4 P's
MONEY MANAGEMENT SYSTEMS
Money, finance needed, budgeting
IN SHORT
- What are you going to do?
- What is the value proposition?
- What resources do you need?
- How much will it cost to get you started?
- How will you pay for it?
- Who are your target customers?
PERSUASION IS VITAL
WHY CREATE A BUSINESS PLAN?
- Focus your efforts
- Attract collaborators
- To raise finaces
- To enable you to track your growth
- You need a business plan to attract investors
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WHERE TO FIND A BUSINESS PLAN
- A high street bank (Barclays, Natwest)
- The Arts Council (Community-based- may receive a grant)
(HOW TO WRITE A BUSINESS PLAN)
(OUTLINE FOR BUSINESS MODULE)
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FINDING FUNDS
(platforms for advertising your project, and allowing others to invest)
- By helping others to get grants
- Crowd funding
- We did this
- Co-operative
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GETTING ORGANISED
- Work alone? In a team? Equal partners? Employee in an organisation?
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ROLES WITHIN A TEAM
ACTION: Fast-paced
CO- ORDINATOR: Team worker, good at communicating
IMPLEMENTER: Initiative, gets on with the job
RESOURCE INVESTIGATOR: Researcher- deals with the people on the "outside" of the company
PLANT: Ideas person, new, exciting, creative
SHAPER: Bossy, directing, guides
TEAMWORKER: Enables the team to work well with one another
SPECIALIST: Highly skilled and technically knowledgeable
EVALUATOR: Needs to be persuaded, puts the breaks on upon fast-paced decisions
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FOUR KINDS OF ORGANISATION
- POWER CULTURE:
Small business, ONE boss (eg independent, family restaurant, the "don", often very political. Long established companies with very stubborn/determined boss).
- ROLE CULTURE:
Large organisations, senior management at the top, deans, directors, etc- "columns" are departments- self contained (eg Universities- Leeds College of Art, Hospitals).
- TASK/MATRIX CULTURE:
Temporary structure- eg Hollywood businesses. Freelancers come together to produce a film- no hierarchical structure, but a team working together to achieve a project. Also describes festivals, etc.
- PERSON CULTURE:
Eg Dentists- Specialists who also depend upon the services of others in order to support them (receptionists, researchers, etc). All with their own clients.
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HOW WILL YOU ORGANISE YOUR PRACTICE?
What skills do you need to get the job done?
INCOME STREAMS
- Private commisions
- Freelance designs
- Royalties from book sales
- Workshops
- Part-time teaching
- Professional seminars
...HAVE INCOME GENERATED WHILST YOU'RE SLEEPING!
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WHAT TYPE OF COMPANY?
WHAT STATUS?
Determined by what you choose to do with the profits
- Profitable growth of business
- Increase income for employees
- Make enough £ to continue practicing
- Share with all included in the business
- Give all to charity
- Fund community projects
- Share with customers/members
LEGAL STATUS
- Sole trader
- Partnership
- Limited company
- Limited liability partnership
- Social enterprise
- Public limited company
LEGAL STATUS
- Determines how business is run
- What records should be kept
- How much tax you pay
- Can affect your ability to borrow £
- How you pay employees and yourself
MORE INFO:
- Business link
- Companies house (Ltd companies)
- Social enterprise coalition
- Co-operatives
TAXATION
Funds:
- Education
- Protection
- Healthcare
- Economic growth
PERSONAL TAXATION RATES
- 2012: £7,475 (limit before you pay tax)
- £0-£35,000 = 20% taxed
- £35,000-£150,000 = 40% taxed
- Over £150,000 - 50% taxed
- Taxation levels apply to self-employed, sole traders and employers- including those employed by own Ltd companies.
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NICS
Funds:
- State pensions
- NHS
- Unemployed (saves from absolute poverty)
- As a nation everyone pays towards NICS.
- Self-employed = £2.50 pw in payments towards NICS
- Any profits up to £7,200- pay 9% on profits, over this level, pay 2%.
ALSO pay employees national insurance of 3.7% of salary.
SOLE TRADER OBLIGATIONS
- Keep records safe
- Separate personal from business expenses
- Private and business use of car
- NIC: £2.30 pw in payments plus 8% of profits at year's end
- Inform Inland Revenue
LTD COMPANY
- Directors and shareholders liability for debts is limited by their % of ownership
- You are the employee of the company
- Corporation tax will be paid on profits
LTD CO. HAS 100 SHARES (100%)
- Each individual shareholder is persued for payments
- AGMs (meetings) to approve accounts
- Register with companies house
- At least 2 employees
- ANYONE can have Ltd companies
- £10,000 tax few holiday for new start up businesses
LTD COMPANY LIABILITIES
- NIC payments
- VAT
- Corp. Tax payments
CORP TAX
- Turnover of less than £300,000- 21% tax on any profits.
VAT (VALUE ADDED TAX)
- 20% on all goods and services
- 5% on:
* Children's car seats
* Property renovation
* Insulation
* Gas & electric supplies
* Feminine hygiene products
* Nicotine patches
ZERO RATED
May rise next year due to Government changes
- Charity advertising
- Food, other than "takeaways"
EXEMPT
Only changes through Parliamentary change
- Admission charges
- Health services
- Tolls
- Burials and cremations
VAT THRESHOLDS
- Up to £70,000
- Can claim back on all you buy for business
- Add VAT to your own invoices
- Claim back VAT on materials you buy
