Peter Norris: Finance

04/12/2013 § Leave a comment

£25 an hour X 8 hours = £200 a day

£200 a day X 5 days = £1000 a week

£1000 a week X 4 weeks = £4000 a month

£4000 a month X 11 months (1 month holiday) = £44,000 a year

Over 1 year: your workload is not constant. You won’t have work all the time, as well as having finances to sort out etc, therefore reducing your overall yearly rate.

£44,000 then becomes £38,000

£44,000 is your GROSS income. You then have to take into account National Insurance, Tax and Pensions. You might end up with £23/24,000 a year then.

These deductions can be reduced if you charge correctly. It can also be reduced if you’re efficient in managing your finances for your business e.g. charging 25% of your heating/electricity bill (if your office is your home) to your company. If you drive to meet contacts etc, you can then charge for mileage. You need to take into account EVERYTHING.

£0 – £7000 is tax free

£7000 – £21,000 you pay 10%

£21,000 – £42,000 you pay 25%

£42,000 – £80,000 you pay 40%

£80,000 you pay 50%

(The % they take from you, they will give you back into your pension)

It is important to take into account all your monthly outgoing bills and make sure that your wage coming in balances this out. Make sure the company you’re working for at the time keeps up with their payments and keep an eye on your money flow.

BUDGETS

Set amount of money that is committed to a project. Costings – Profit – Tax – Shareholders

Budget is not a set amount of money, it is only an estimate. A guideline as such. Each year a similar budget will be made and each year you will learn more and more on how to manage it better.

–> EXPENDITURE

  • You ALWAYS need to know how much is in your bank account and how much of it you can spend.
  • The best plan is to take out 10% straight away so that you know you have some spare in case of emergencies (or at the end of the project it becomes profit).
  • Always keep up with the MATHS. Deduct your expenses from your budget straight away to keep on top of it easily. This way, you always know how much you have left, how much you’ve spent and know where you stand.
  • Be prepared to cut corners, PLEASE THE CLIENT – stop to understand what it they will be paying for.

Hypothetical Project:

  • New logo for Manchester Museum
  • Budweiser TV AD (15 seconds)
  • Poster for RAF Duxford – Imperial War Museum

LOGO

  • Talk to client about what they require from me – 1 Hour
  • Research into their history and what the museum is all about. Get a sense of their styles etc – 2 hours
  • Sketch out 10 rough logo ideas – 8 hours
  • Meet with client to go over sketches and for them to pick their final choice – 1 hour
  • (Possible further development – 1 hour)
  • Final development – 2 hours

Working Hours Total = 14/15 hours – £350/ £375

  • Software usage – £10
  • Pens/Paper – £5
  • Travel Costs – £10

Combined Total – £400 Max.

POSTER

  • Talk to RAF Duxford about what they require/it’s purpose – 1 hours
  • Research into their background – previous posters, what it is they do to get a feel of the style they need – 2 hours
  • Sketch out 10 rough poster ideas – 8 hours
  • Meet with client to discuss sketches and for them to give you feedback etc. Also talk about paper type/scale required – 2 hours
  • (Possible further development – 1 hour)
  • Final development of poster/s – 2/4 hours
  • Printing – (depends on quantity and scale) – 2/4 hours

Working Hours Total – 22 hours max X £25 = £550

  • Travel Costs – £10 (depending on mode of communication)
  • Paper and ink – (depends on size and quantity)
  • Software – £10

Combined Total with Printing Variable – £570 max without printing.

TV ADVERT

  • Talk to Budweiser and understand what it is they require from me – what is it they are trying to promote? What is their goal? Is there a particular theme they want to go down (live action etc)? What content do they require in the advert? – 2 hours
  • Research into their background – What styles have previously being used? Colours/type/logo etc – 2 hours
  • Come up with 5-10 rough ideas using the information they provided and research – 8 hours
  • Pitch your ideas back to the Budweiser team for feedback on what they like and what they didn’t like – 2 hours
  • Develop your final advertisement – 24 hours
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