Immersion 2010: Session 6

Bit behind on posting for Immersion - just soo busy right now. But in a good way :)

Session 6 was all about Costing and Pricing - really useful because it's so hard to know how to value your work. Being an illustrator, I'm a member of the AOI so I can always ring them up and ask for pricing advice; but I know in future I want to work in other areas as well as illustration, areas that might require having an hourly/day rate, and it's hard to know what to charge people.

We were broken into 2 groups and each had a workshop, then we swapped round. The first workshop I had was with Catherine Gregg, from Make:Good. It was a really practical session; we analysed a live prject that one of the group had coming up and broken down exactly how much time and money it was going to cost him, so a day rate could be worked out based on how much he needed/wanted to earn.

The one interesting thing that came out was that say you wanted to earn 30,000 a year from freelance work, you can't just break that down into 365 days and say "ok I need to earn £80 a day"... because that doesn't take into account any weekends or holidays. You can't even say "I'll work 240 days a year, which means I'll charge £125 a day", giving yourself weekends and 20 days holiday, because that assumes you have a constant flow of work every working day of the year. Which just isn't going to happen. You need a few days a week of self/promotion/looking for new work, and sometimes there's work that needs to be done for projects that you just can't bill for. Things like that. So automatically you're looking at an actual working year of 100-120 days a year. Which is £150 a day. Which actually sounds kind of reasonable. If you're lucky.

Anyway, to dream of 30k a year! That's nearly double what I make now. Ah, bottom of the ladder and all. Got to start somewhere!

The advice was basically, pick a salary you want to earn, then using above workings, work out a day rate. Apparently you should be aiming for £300 a day! I know, that seems really high. If only!

Another tip was to avoid working for free. However, most of us have to do that. So ask for something in return - meetings with their contacts etc.

The second workshop was with Magnus, who has been great and done quite a lot of sessions with us. His was more about if you're selling actual physical projects, how to cost and price them. Taking into account everything like manufacturing costs, distributor costs, stuff like that. So less useful for me but still good to know.

He also talked about royalties and how they work, which was good as I didn't really know a lot about them. Sounds like a really tedious way of making a living actually.

Lastly, after lunch, we had a talk from Rachel Smart, who is one of those horribly annoying people because she was just so good. At everything. Just good at life. Irritatingly awesome. In a good way of course, she was really nice, just one of those people that makes you feel crushingly inadequate. Lol. Check out her blurb:
"Rachel Smart Limited is a management consultancy providing services to design businesses. Sectors served include architecture, interior design, interior products, fashion design and accessories, graphic design, designer-makers and public arts. Consultancy advice is to assist in the development of long term business strategy whilst also enhancing the operations of those who work to commission and/or produce product ranges.
Whilst serving the needs of clients on a one to one basis, Rachel also teaches in universities, leads professional practice seminars and researches management and entrepreneurship in the design sector."

See. Just too good. And so, inevitably, she had really amazing, yet simple advice. Things like, if you have questions about tax, phone up the inland revenue. Just phone 'em. Simples. And also, to have separate bank accounts for personal and business - makes working out tax etc much easier. And also the basics of book keeping, just looking after invoices, purchase orders etc.
Get a boxfile, put all statements, receipts, invoices etc in there.
Get a ringbinder and dividers
One section for sales invoices
One for purcahse invoices/receipts
One for bank statements.
Then you can match all ins and outs to the bank statements.

She also explain what expenses were... things bought by your personal money, the business then owes you that money. Reduces profit, reduces tax. Basically a loan. All these things I did not know! So much clearer.

Rachel also does surgeries to help businesses at Craft Central, based in Clerkenwell. Seems like a good place actually, membership is £40 a year. Might be a useful thing.

So this session was really useful and gave us a lot to think about. Came out feeling good, if a little overwhelmed - and quite glad I have a full time job at the moment and don't have to think about these kinds of things yet. Although I'd love to be freelance full time, I'm glad I'm working for someone else as I want the experience before I start out on my own.

To read all the other posts about Immersion 2010 at Central St Martins, click here.

(oh, also, I now have re-tweet buttons on my posts from now on, and other social networking and bookmarking buttons too! Share me around people, if you like what you read!)