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What kind of business? How to organise the day-to-day business
of being self-employed or running a small business: tax, bookkeeping,
cashflow, VAT, and financial planning.
Being a freelance, being self-employed, setting up a small business,
what does this all mean to you, embarking on a creative career in
the creative industries? There are three broad categories of employment
contract in the creative industries.
Staff jobs - these are permanent jobs, with an annual
salary, sick pay, pension, holidays.
Fixed-term contracts - these are of several kinds: for
the anticipated duration of a particular project; for covering
permanent staff members' holiday, sickness, maternity leave, etc,
without reference to any specific project; to cover a "bulge"
in the employing company's activities; and so on. Contracts of
this kind may carry all the benefits of staff employment, for
a short-term engagement, or they may carry few or none. They may
contain provisions for renewal, or they may not. People with the
skills and experience that allow them to work on a variety of
projects, perhaps several at a time, are the most likely to be
on renewable contracts - e.g. presenters, producers, researchers.
Freelance - You are probably self-employed and responsible
for your own tax, National Insurance and pension. There is no
security, you will need to find your own work and negotiate your
daily, weekly or monthly rate that could be very high or very
low depending on reputation and experience.
The majority of people working in production areas will be working
on fixed-term contracts or as freelances, which for tax and legal
purposes means that they may be classed as self-employed - equivalent
to a small business. Many creative people tend to find it difficult
to manage this aspect of their work. You need to develop skills
in administration, including record keeping, effective time-management
and managing a diary. You will need to ensure you make the relevant
tax, National Insurance and VAT contributions. You will be negotiating
fees, invoicing, paying bills, chasing unpaid invoices, managing
cashflow and balancing costs against payment delays. Developing
a good relationship with your bank, getting the right advice early
on and developing a well-structured Business Plan, however small
your business, will all enable you to manage this area successfully.
Much of the last paragraph applies equally to a fourth type of
contract: the commission from a funder (a broadcaster, perhaps)
to a small company to produce a piece of work for it (a programme,
perhaps). If you are earning most of your living as a freelance
or through your own company, you will need professional advisors;
for example:
Accountant - book-keeping, setting up accounting systems,
managing cash, helping to raise finance, preparing tax returns
& VAT, preparing business plans, budgets, forecasts, whether
you should be a Sole Trader, a Partnership or form a Limited Company.
Bank - will have specialist services and advisers, a range
of financial facilities including loans. Keep your personal and
business accounts separate.
Solicitor - preferably a specialist in your type of business,
to give advice on whether to set up your business as a Sole Trader,
a Partnership or a Limited Company, to check out the contracts
that you obtain for work and/or commissions, and to advise you
generally on employment law, intellectual property (copyright)
law, such matters as forming companies and drawing up partnership
agreements and many other things.
Our Media Professionals discuss their financial arrangements, and
offer their advice on organising your money.
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9.1
Victoria Noble
On how employing an accountant has helped her, particularly
through the feast and famine of long and short contracts. |
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9.2
Christine Molloy
On 'Desperate Optimists' partnership arrangement, how they manage
their books, and other types of financial arrangement. |
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9.3
Sarah Beecham and Graham Howard
On the importance of regularly setting financial targets. |
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9.4
Mike Fox
On how employing an accountant has helped him. |
An unusual aspect of self-employment or starting your own business
is that you make the decision yourself that you have the necessary
qualities and abilities to make a success of it. You do not go through
a sifting or selection process. You need to analyse what you expect
and hope to achieve from self-employment or setting up your own
business. Do not under-estimate the problems and difficulties which
can and do emerge.
The answer to the question of your suitability comes through self-analysis
and self-awareness. You may be extremely talented in your area of
skill and training but may not possess the skills or personality
type that will thrive in a freelance environment, or if you set
up a company. Are you the right person? Have you got the necessary
skills? You will have addressed some of these questions by completing
the tasks set earlier. But will you be able to earn enough to live
on? In the end you need to earn a living, and this is as an important
an indication of success as producing a stunning and creative project,
which leaves you in debt or bankrupt!
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The links below will provide information on business
matters and will direct you to sources of further help.
Some of the information that you require will be available
on the sites, some of which are highly informative.
By going to the sites you will also learn about training
schemes, seminars, funding and grants and where to go
to get information.
Business
Link
A national network of agencies which aim to provide
a one-stop resource for business start-ups, training,
counselling, advice and contacts.
TEC
The Training and Enterprise Council, TEC's can
provide information on other business-support agencies,
plus consultancy and training for small businesses.
TotalJobs
General advice on starting in business, raising
cash, the legal side, marketing, taxation etc.
Inland
Revenue
Includes an 80 page guide to download which aims
to start you on the right track when self-employed so
you can avoid the pitfalls. The guide covers the main
areas, registering with the Inland Revenue, tax, National
Insurance, structure etc.
Channel
4 Real Deal
The site for setting you on the road to taking
your business forward, with step-by-step advice on planning
and examples and templates for the Business Plan, cashflows,
profit-and-loss forecasts etc.
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| Task 4 - Charging for your services |
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