MyCake
autumn events
A few events coming soon that will be showcasing some great talent:
100% Design, 23-26 September 2010 at Earls Court, London
Contemporary interior design, architectural and interior materials, emerging talent showcase
Trade registration free before 17 September 2010.
…….
Vienna Design Week, 1-10 October 2010
Product, industrial and furniture design. Talks from Stefan Sagmeister and Konstantin Grcic, and a focus on less-established talent.
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Design Event North East 2010, 22-31 October 2010
Contemporary design across graphics, furniture, product, fashion and architecture.
A programme of thirty exhibitions across the north east, including a three day market at the BALTIC Centre for Contemporary Art in Gateshead and a street exhibition in Newcastle called the Modern Art of Conversation and Maxims for Modern Life at Northern Gallery for Contemporary Art, Sunderland.
The Creative Pathfinder – Your FREE Guide to Success as a Creative Professional
Lateral Action has a new course for professional creatives: The Creative Pathfinder, a practical education in the artistic and professional skills you need to thrive in the real world of the creative industries.
It’s completely free and packed full of great advice, worksheets and resources.
If you’re an artist, designer, writer, actor, musician, filmmaker, or working in another creative field — artistic or commercial – this professional development course has something for you.
take a look at the overview and sign up here.
Cockpit Arts Incubator Package spaces
Deptford Open Day
Cockpit Arts creative in Deptford is at the centre of an exciting community of artists and craftspeople in South London.
They are holding an Open Day on Thursday 9th September for designer-makers interested in applying for a studio. Discover how Cockpit Arts can help you make your business more profitable whilst you develop creatively. Take a tour of the studios and get your questions answered by the team.
Spaces are limited and booking is essential ~ email Beckie or look for more information on the Making It Blog.
Cockpit Arts Top tips: The Pricing Decision 2: Price and the Market
Ahead of this week’s Cockpit Arts Finance workshop with MyCake on Wedensday, 11th August 2010: Financial Planning for Growth we’re have some more Top Tips by Ellen O’Hara, Head of Business Development at Cockpit Arts.
There’s no doubt that getting your pricing right is a crucial part of your marketing and business strategy as a designer-maker.
As part of the Pricing Decision series I am looking at three key areas: Cost, Market and Value, as well as how different pricing strategies fit with the overall goals, for your practice and business.
My last post looked at the relationship between price and cost with cost-plus pricing. This week I will explain how the market affects the pricing decision.
Price and The Market
Market based pricing methods depend on having an accurate picture of what’s going on in your marketplace. For example: Are you selling to craft collectors? The mainstream gift market? Or high end fashion? And what are the current trends in these market sub-sections?
In the larger, mainstream markets, prices will tend to be dervied from two key factors:
- What competitors are charging
- What customers are willing to pay
Who are your compeitiors and what are they charging?
If you don’t feel there are any direct competitors out there, try and pick out a few other makers or brands that:
- Are making similar work
- Are aiming at a similar customer base
- Who are at a similar stage in their career and have a similar profile
How do your prices compare? Are you competitive, or potentially over or under pricing yourself?
What are customers willing to pay?
- Research other companies’ prices online, in stores and in galleries. Pick a broad range of products so that you can compare the going rate for different types of products in your field. For instance as a designer-maker jeweller, you could look at a combination of mass produced high-street designer jewellery and high end fashion jewellery, as well as other makers.
- Look at the overall price range that other companies offer (minimum and maximum), how different work is priced differently, whether discounts are offered etc.
Use all of this information together to inform your own pricing decisions.
The Advantages
The advantages of following a market-based approach are that it tends to keep you price competitive in the eyes of your customers, so it’s important to consider who you’d like to be compared with and sit alongside in terms of price.
The Disadvantages
The disadvantages of this method are that the market price may not provide you with the profit margin that you want (and need!). You may actually have a very different business model to the people you are comparing yourself with, who may be able to produce and sell work at very different costs.
New and Unique Work
Your work may be so new and unique that there is no solid market-based price to compare with. So you have be the price setter yourself. If this is the case, it’s likely that your operating at the niche end of your market, where the percieved value of your work bears more influence on price than what others might be producing and charging. We’ll explore this in more detail next week with The Pricing Decision # 3: Price and Perceived value.
Let us know how you get on by leaving a comment on your experiences in making your own pricing decisions.
See more top-tips on finance from Ellen and other industry experts.
Or check our resources section for a worksheet on Calculating Your Costs and Budgeting.
And if your doing some financial planning this summer, come along to our workshop: Financial Planning for Growth on 11 August.
Risk and the Creative Entrepreneur ~ your thoughts please
Calling all creative entrepreneurs…
The Creative Industries are known for being very risky and yet we have little understanding of how risk affects creative entrepreneurs. Nicky Riley at Birkbeck College is conducting research and is interested in your views on risk and how risk affects you.
Please help by filling out this survey. All fully completed responses will be entered into a prize draw – 4 individual prizes of Amazon vouchers worth £25 will be made and Nicky will contact the winners by email.
Please log on here to complete the questionnaire.
All survey responses will be treated anonymously and findings only reported in the aggregate. Please feel free to contact Nicky if you have any questions and require further information. The survey will be open until Friday 20th August 2010.
We value your feedback for this research very much and thank you for your time.
Tax doesn’t have to be taxing…Part Two
from Cockpit Arts Making It Blog:
By Dean Shepherd
This is the second part of two posts by Dean Shepherd. Click here to see part one
If you are attempting to complete your own tax return then it really is imperative that you use HMRC’s online filing system to do so. There are a number of reasons why. Firstly, there are many built in checks to ensure that you do not inadvertently enter incorrect information into any of the boxes. This may be as simple as checking your columns all add up or maybe something more intricate such as the ability to make certain claims and elections relevant to your circumstances.
Secondly, your tax bill will be calculated instantly on screen so you immediately know how much has to be paid and by when. No need to wait for a paper return to be processed and a tax calculation to be sent to you. Finally, you get longer to submit your return. The filing deadline for paper tax returns is 31st October whereas online returns do not have to be filed until three months later on 31st January. Further point: In order to use the online filing system you need to register your details and HMRC will provide you with an activation code through the post. It may therefore take a couple of weeks to set up and cannot be done the night before the filing deadline!
Business Payment Support Service
In the November 2008 pre-budget report the government announced a new Business Payment Support Service whereby businesses experiencing cash-flow difficulties could postpone certain payments of tax and set up instalment plans to spread the cost. This service is still in operation and is very useful for businesses wanting to pay their various tax bills via instalments. Most taxes are covered: Self Assessment, VAT, PAYE and Corporation Tax. All you need to do is call the helpline (0845 302 1435) prior to the tax liability falling due and agree an instalment plan over the phone. This service has been used very successfully by many of my clients.
Further point: You must call prior to the due date and if you go to them with an instalment plan in mind (e.g. tax to be paid in equal instalments over the next six months) then they are more likely to give you an immediate decision over the phone.
About the author:
Dean is an accountant and founder of Tax By Design, a firm specialising in helping small businesses in the creative sector. He is a member of the Chartered Institute of Taxation and holds a 1st class honours degree in Multimedia Design. He will be running Free Tax Surgeries over the summer in both Holborn and Deptford studios and will be giving a Tax Return Made Easy seminar in January for anybody that has left their Tax Return to the last minute! To find out about our workshops and the other events and services we offer join our mailing list.
I hope you find the above links useful. If you have any of your own to add then please leave a comment for others to read below.
Cockpit Arts Top tips: The pricing decision series
Ahead of Cockpit Arts Finance workshop with MyCake on 11th August 2010: Financial Planning for Growth we’re featuring Top Tips by Ellen O’Hara, Head of Business Development at Cockpit Arts.
The question that I’m asked more than any other in my role at Cockpit is ‘how should I price my work?!’
There’s no doubt that getting your pricing right is a crucial part of your marketing and business strategy. So what is there to consider when making the pricing decision?
In the workshop The Price is Right, which is part of our rolling programme of Making It Workshops, we look at three key areas: Cost, Market and Value, as well as how different pricing strategies fit with the overall goals for your practice and business.
Over the next few weeks, I’ll be posting a series of top tips, looking at pricing from these four different perspectives:
The Pricing Decision # 1: Price and Cost
Your first consideration when setting prices will usually involve looking at what costs are involved when producing your work. The ‘Cost-plus’ approach to pricing involves setting price by starting with the cost of creating a product, and then adding a mark-up. The mark-up provides you with your profit margin and so the cost-plus approach almost guarantees that you will not sell at a loss.
Mark-ups can be based on industry standards, individual expert opinions, or widely accepted rules of thumb. I usually advise makers to try and double their cost price to arrive at their wholesale price. In other words, add a mark up of 100% or x 2. And then add a mark up of around 2.5 on the wholesale price to arrive at the retail price. This is equal to multiplying your cost price by 5 to arrive at your retail price, or adding a mark up of 400%. This should ensure that there’s enough profit to cover some of the other costs associated with running your business.
The disadvantage of this approach is that if costs increase, the price of the product must also increase. The price of each product is therefore dependent on how many costs it creates.
The key to using this approach effectively is to be as accurate as possible about actual costs. So what should you include?
- Firstly there are the costs that directly relate to the production of the work such as materials, the cost of outworkers and packaging. These costs will tend to vary as the volume of work you produce and sell changes and can be refered to as variable direct costs.
- Then there is the cost of your time (if you produce the work yourself) which will be based on your hourly rate.
- Finally you also need to think about making a contribution to the day to day running costs of your business, or overheads (also refered to as fixed costs). This will include things like studio rent, day to day administration costs, PAYE staff costs and marketing. Some makers build this into their hourly rate.
A cost-plus figure generally provides a basis for the lowest price acceptable, but should not be the only consideration. It takes into account the cost and profit side of buying and selling, but it neglects demand for your work and what is going on in your market.
Another way of using costs to determined price is ‘target pricing’ where are a target price is made, and then costs are adjusted so that that price can be achieved. However, this is often very difficult to achieve for designer-makers who produce in small batches because costs are less flexible.
Next we’ll be looking at Price and Market in The Pricing Decision # 2.
For guidance on calculating your costs, try our Calculaing Your Costs and Budgeting worksheet which can be found in the Resources section of the blog. Or see the other posts on the blog that advise on finance from me and other industry experts. Let us know how you get on!
And if you’d like to attend our next Finance workshop: Financial Planning for Growth see details and book here.
Financial planning for growth workshop
MyCake is giving advice at Cockpit Arts’ financial planning for growth workshop on Wednesday 11th August 2010. We invite you to come and explore how to use your own financial information to make more informed decisions about your business.
You’ll look at the pros and cons of different record- keeping systems and which approach is best suited to you and your business. Through practical group exercises, you’ll cover budgeting, financial planning and how to improve your cash flow on a day-to-day basis.
You will also look at improving profitability and using designer-maker case studies, you’ll be taken through a profit and loss forecast and show you how to interpret your own figures to make better decisions about your business.
What you’ll get:
- Guidance on setting up a record system that works for you
- Improved financial literacy and confidence in financial planning
- A clearer understanding of your own business model and how to develop this to improve cash flow and profitability
Wednesday, 11th August 2010 from 10:00am to 12:00 noon.
The cost is £10 and open to studio and non-studio members. Book here
Tax doesn’t have to be taxing… part one
from Cockpit Arts Making It Blog:
….unless of course you have better things to do with your time than read through the pages and pages of manuals, help sheets, leaflets and guidance notes on the HM Revenue & Customs website. The help sheets on completing your tax return alone stand at more than a thousand pages and they include nothing about VAT, National Insurance, PAYE or any of the other tax issues that small businesses face. That said, if you know where to look, there can be some very useful gems on the website and I have outlined some of the better ones below:
Working from Home:
Just because you rent a studio it does not mean that you cannot claim for business use of your own home. Many studios are not suitable for storing all the important financial paperwork which means the business is effectively operated from home. In the good old days accountants, like myself, used to advise clients to estimate the additional costs they incur from having to operate their businesses from home. This may have been an extra £5 or £10 per week, depending on the type of business, but relatively small amounts in terms of tax savings. However, when HMRC were forced to publish all their internal guidance manuals, we discovered a list of examples that are much more generous. HMRC have inadvertently confirmed that all businesses operating from home should claim a proportion of their rent, rates, service charges, mortgage interest, council tax, gas, electric, repairs and insurances. Some accountants to this day argue over whether council tax should be included but it is listed in black and white within HMRC’s own guidance and anyone not claiming is paying too much tax. Make sure you make that claim.
The Employment Status Indicator Tool:
Rather than take on members of staff and deal with the administrative burden that comes with being an employer, many small businesses will use freelancers and sub-contractors to take up the slack when things are busy. This is all well and good but what happens if HMRC come along and say that you should have put them on the books and deducted tax and national insurance contributions at source. Well, if you are unsure whether someone should be treated as an employee or a freelancer then use HMRC’s Employment Status Indicator Tool. You work through a series of questions and the tool then tells you whether they should be an employee or whether they can be paid as a freelancer. Nothing gets sent to HMRC and you do not give any personal details. However, a reference number is generated so if HMRC ever question your decision then you can state that you used their ESI Tool and present them with the reference number as evidence. Further point: The ESI Tool is not 100% accurate so if you disagree with its outcome then it is best to discuss your concerns with an accountant.
Read more tax advice in part two published soon…
About the author: Dean is an accountant and founder of Tax By Design, a firm specialising in helping small businesses in the creative sector. He is a member of the Chartered Institute of Taxation and holds a 1st class honours degree in Multimedia Design. He will be running Free Tax Surgeries over the summer in both Holborn and Deptford studios and will be giving a Tax Return Made Easy seminar in January for anybody that has left their Tax Return to the last minute!
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Exploiting Digital Tools Workshop for Creative Industries
Digital tools play a key role in driving innovation in today’s creative industries. But what new tools are on the horizon and how will creative businesses harness them to drive exciting new business opportunities? What will creative professionals – from architects to fashion designers to games developers and others – be using to create and produce content in the future? How can digital tools cut production costs and improve efficiencies? What can the different creative sectors learn from each other?
Creative Industries Knowledge Transfer Network are holding a free workshop and networking event on Wednesday 21st July 2010 at IPA, London.
To book free tickets for Exploiting Digital Tools, contact events@citin.org
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