• Skills audit available to view and download: https://www.dropbox.com/s/30bch860m8219yw/Skills%20Audit.docx?dl=0
• Resources from the Freelance Summer School webinars can be found in the Careers Portal in the "discovery feed"
• Day 2 of how to be a great freelancer. All about the money and valuing yourself. Managing money and your value.
• Financial drive
• Title of the webinar is inspired by Jerry Mcguire - show me the money!
• What do I need to live on? What am I worth?
• Individual living budget form - can be located and downloaded at https://www.dropbox.com/s/wi3i59eqmm1aifw/Individual%20living%20budget%2020210201.xlsx?dl=0
• After we've paid our taxes to the government. HMRC ready reckoner will tell you how much to invoice. Tax rates are different between National Insurance and brackets. This living budget is after tax. Gives us an idea of our annual turnover. Total abount that we invoice for the year. Doesn't indicate to us our personal value at all, however.
• How much do you need to live on? Bank statements will tell you in a straightforward way your outgoings. Household costs: mortgage, rent, council tax and utilities. If you are graduating and you're moving somewhere else, think about how much you need to live on when doing work as a freelancer. Factor in space change and rent.
• Transport costs: whether you have a car to consider car finance and running costs. Public transport costs. What does that look like? Make some estimates around that. Weekly and monthly column in the spreadsheet.
• Personal expenditure. Groceries, entertainment, holidays, things for yourself. Difficult to estimate at the moment with pandemic. As we come out of the pandemic how will this change?
• Financial situation in general. Loans, student loan comes to of your tax return directly, pension, etc
• Other costs such as medical (prescriptions and such), childcare f you have children, carers if you need them for family members.
• Materials and tools of the trade. Do you have everything you need? Travel costs, subsistence costs. You'll need to pay for those before you start earning the money.
• We will struggle to win those clients if we haven't done this work first.
• You may want to consider an accountant if your business gains traction and you have the money for that.
• Business expenses: tools of the trade, things you may want to look at as you are starting up. Business cards, paper for printer, travel time, advertising and marketing. Things to consider as you get started. These will be tax deductible.
• Pensions: Your responsibility to organise as a freelancer. Putting chunks aside. Hard to calculate regular payment amount. May want to opt in for irregular lump sum payments. Take professional advice. May have the option to opt into a company scheme if working as self-employed on contracts longer than 3 months (some potential to do this from day one). Increasingly fintech companies looking to support freelance pensions for example Raindrop.
• Managing our money and organising our bank account. Business Current Account: Day to day business transactions. Keep things separate. Only things going through business current account are my business transactions so it's much easier. If it all going through personal account it becomes very difficult to tease apart those finances.
• Business Savings Account: tax money set aside here every time an invoice comes in.
• Personal Current Account: personal spending. Where the fun happens.
• Regular amount monthly. Whatever makes the most sense.
• Lots of different banks, lots of fin-tech places - Monzo, Tide. Quickbooks. How you integrate that. Coconut set up for freelancers. So much is automated. Photos of receipts to join it all up.
• What goes into an invoice? You legally need to say the word 'invoice' to clarify what it is. Unique invoice number so it can be identified. Alison uses the method of IN and sequential numbers to easily locate who has paid. When dealing with larger companies, they want to know the spend is committed. Matched up in the system. VAT registered and VAT number. When you're at £85,000 you need to register for VAT. Depending what you do there can commercial or strategic reasons to register earlier. Equipment you buy can be claimed VAT but everything you invoice will need to include VAT. two way street. Can signal you are a big company, more significant company. Take financial advice if wanting to VAT register. Can cause challenges. Can be problematic. Take advice for your business.
• Also include: your freelancer services name, address and contact information. The name and registered office of the client. The date of the invoice. A purchase order number, or contract number if given. The date the goods and services were delivered (supply date). A description of what you are charging for. The amount(s) being charged net of any applicable taxes. If you are charging VAT then add those details. You must also include your VAT registration number. Total amount payable and how the invoice should be paid.
• How do we ensure that we get paid? Sort the paperwork before we start the work. Ak yourself "does the person have authority to order this?" Get it in writing. PO, contract. An email may suffice but it isn't formal. Have that devil on your shoulder asking whether they are the right person with the authority. Ensure clarity on the payment schedule. It can be acceptable to ask for money upfront. Understanding how that works. Making sure you are ready to go, getting yourself set up as a supplier ASAP. Understand the payment process from the client - commercial or public sector? Large or small company? Who is the person paying the bill? Systems and processes, getting set up in the right way can smooth the process. Forms to fill in, do it quickly or it can slow down the payment process.
• How does the payment process work with that client? Understanding what their processes are. Who you send the invoice to. In accounts. "Should I send it to you or the accounts department?" Accounts dept. can be helpful with the payment status. Don't chase the client directly.
• If the task of payment is stuck with the client then gently probe them. Understanding that process, owning it and feeling comfortable doing it as it's part and parcel of doing this work
• Income spreadsheet. Details of the company, when aid, how much paid, how much invoiced, how much to invoice. Possible column, could be some work and keep that in one place and can be moved across the columns if it's going ahead. Good reminder to look at upcoming potential projects. Invoice number to keep track and marry with your invoices in your files and the ones sent out.
• Looking at the with turnover target and personal expenses.
• Start looking at how much money I need to have in my tax account to cover income.
• Freelancers tend to do April to April. Only when you start to run a Ltd. company you may want look at June/July when working with schools and education.
• When you get money, you have to put money aside for taxing as you will get taxed. Invoicing template can be found at and downloaded here: https://www.dropbox.com/s/2mghamrlhqgq39h/Invoice%20Template.xlsx?dl=0 This is a lotto take in but it is about being happy doing what we do. Happy sane functioning human beings. Living the life we want and doing the work we want to do. Not beans on toast forever. Do need to make estimates. Unlocking your value.
• National minimal wage. Legal requirement. 18-20: £6.56 per hour, £246 per 37.5 hour week, £12,794 per year. 21 years: £8.36 per hour, £313.50 per week, £16,302 per year. 23+ £8.91 per hour, £334.13 per week, £17,374 per year. Consider these wages against the relationship to freelancing?
• Models of charging for work. By the hour (for example, Graphic Designers and Coaches). By the day (for example, film crew and Workshop Facilitators). By the week (for example, Contractors and Project Managers). By the project (for example, Consultants and Strategists). If you are doing 10 days work over 3 months, hard to cost up over 3 months. Daily rate goes down quite a bit and could have been doing other things with your time.
• Allison has worked by the hour, day and project. Not usually by the week anymore but did in the beginning of her career with TV projects.
• What sort of models might I use? What would those different types of work be? How would it fit together. Different ways we can value our time.
• Value based on estimated rate.
• Estimated annual turnover divided by daily rate = estimated number of paid days per year. Example included is £30,000 estd annual turnover divided by an estimated daily rate of £200 is 150 paid days per year.
• Another example using a "paid by the week" structure. £30,000 annual turnover divided by £1000 estimated weekly rate is working for 30 weeks per year.
• What is my daily rate?
• Value based on number of working days in a year.
• How many of those days are paid work? Not all will be paid. Prepping meetings, meeting clients are not paid jobs for example.
• Better chance of hitting targets if assumed at least 50% paid days and extra money can then be used.
• Technical numerical ways of looking at it
• Value based on experience.
• Just started 0-1 years. A range of rates within any role. Expected to grow and develop. Identify which experience level we are at.
• Early stage (1-3 years), mid-career (3-5 years), experienced (5+ years).
• Benchmarking. Sector resources. Suggested rates from professional bodies and guilds. Unions such as Bectu. Guilds such as Production Guild Uk and the Guild of British Camera Technicians (GBCT). Published opportunities, freelance callouts. Job opportunities. remember the additional costs to perform roles. Asking people - What can we find out about rates? How does that align with the experience that I have. Ask mentors, a wider network, but tread carefully. "I'd pitch in at this kind of rate, what do you think?" for example. Understanding that value. If we don't charge at the right level, people won't believe you have the right experience.
• Industry sector variation rates. Understanding the context so I can pitch accordingly. Primetime or daytime TV. Primetime rates are different, may not think you are experienced if asking for the wrong pricing. Network or Regional. Teaching or Doing. Large or Small Company. Commercial or Charity Sector?
• Intended market for your work. Pitch work, development, self-funded, commissioned. For example: company is investing themselves the profits into a project. Lowest possible costs but with best team. Small budget, flexible with hours, pay you and take you on. Good relationship with client but beware of the "development" only clients.
• Get lots of information and pull it together into a valuation analysis. See patterns on what rate may be in different situations and get an overall sense. We can start to build up sales targets. Estimated annual turnover.
• Valuation Analysis: What do I need to do in order the live? Valuation based on estimated rate. Valuation based on number of working days in a year.
• Experience: My experience level is...
• Benchmarking: Sector resources, published opportunities, asking people
• Sector variations: I will deliver services in these sectors
• Intended audiences: Variations in intended audience are...
• Sample Rate Calculations: Daily Rate
• We have our living budget, turnover, projects: by the day, by the week, by the project, and how do I calculate that? Sense of our rate and sales targets.
• Weekly Rate: a week off can affect our finances. Bearing some of that in mind.
• Are we on track, will it work? projects may start out very small at first with lots of time and creating space and will build up over time in terms of demand so factor that in.
• Relationship between price and demand. We tend to undervalue ourselves.
• Higher price and lower demand? Lower price and high demand? Can earn the same along the line and have time. Balancing relationship of that.
• Case study: Wedding photographer fully booked and always at full capacity. She put her prices up to have some space but still had huge demand upon increasing those prices. Only when she put prices up by 50% did the clients start to drop off. She was seriously undervaluing her work and her skills at first and could have been making a lot more money with less clients.
• Sharp intake of breath test. If you don't hear a sharp intake of breath that then you've underpriced the work.
• Made a good pitch, why you add value, why me, there's a deal to be done. Sharp intake of breath shows there's bartering and negotiating that can be done. If a market trader agrees straight away have we underpriced ourselves?
• Overpricing vs underpricing.
• Overpricing Indicators: Insufficient work, proposals don't convert to meetings, matings don't convert to work. Questions: Are you pricing too high? Do clients understand your offering? Do clients value your offering?
• Underpricing Indicators: Too much work, everyone wants a piece of you. Questions: Too good value for the money you are receiving? Have you asked for a higher rate?
• How do I put my prices up? Make a commitment to yourself to put your prices up and follow through. Tell your clients you are going to put your prices up. Declare that it will happen on a date or drip feed it through. Then put prices up. The client can agree or disagree. Client agrees - everyone is happy. Client doesn't agree - carry on as before or walk away.
• Working for low or no pay. Relationship between supply and demand. At beginning of pandemic, national economics took a tumble. Supplies were low and demand was high.Overruns and overtime. Project work and weekly. Are we working for too little money? How do we balance that out? Is there a real benefit for you? Is there a positive for you here? Does the client really value you? "This will be great exposure, it will increase the work in your portfolio?" Can you even use that work in your portfolio? 9/10 times no and the client is trying to persuade you. Have you asked for more money?
• Hobby clients. You can give more to the client through a social media campaign than earning low pay. Seeng boundaries, knowing what you'll do, and knowing when to walk away.
• The floor was opened up for us to share out experiences in the webinar. One attendee had issues with a charity not wanting to pay much money for 5 designs and a lot of work being put into a project. Alison responded that in the charity sector, they can purport to not have much money but if you hit the sweet spot with them you are reaching an audience of their clients/supporter. They do have a pot of money for visual advertising and art.
• Careers and Employability replied in the chat box to "always quote for the project."
• Planning the deliverables. How long is it going to take? Have a clear sense of that. We are always going to make mistakes, it is about how we take that on, learn from it, and use it as experience.
• Another user shared that they were clear they work for £30 per hour of work and a company then only requested to use one hour of their time. The illustrator spend 5 hurst's working and were not paid for that!
• Give an accurate plan and own the process and have the difficult conversations about money as you need to be paid.
• Different ways you can add value. Your secret sauce: frame it with particular clients in different ways. Key performance indicators for your services. Much more than trading time for money. Fulfilling a need for client.
• Developing new opportunities for your client: You are opening up a new creative vision. Open up that market sector. Is that where your work sits? Increasing sales for your client.
• Saving money on the bottom line for our client. increasing profitability.
• Secret sauce that you bring. how do my services bring value?
• Challenge: have you ever closed a deal without talking about the price? If we shop and purchase without thinking about prices to fulfil a need, then a client can buy our services in the same way fulfilling needs
• Example of a department store: Describe the value to the client; a different offering of products to bring more customers, attract a range of different customers than before. Not about the price. Drawing customers from the range of items. eclectic range on offer differentiating from other department stories.
• Secret sauce recipe - ingredients. Skills, values, lens you are the world through, the way you operate.
• How am doing that for my client? once I explain I can unlock opportunities with my clients.
Reflection and things I have learned:
• I have learned to consider what I need to live on, how to manage my money, how to work out my values and about over and underpricing my work. • Secret sauce recipe - ingredients. Skills, values, lens you are the world through, the way you operate. I found this session difficult to digest with the numbers and spreadsheets as it's very mathematical, methodical and visual. At the end of the day I need to interrogate the numbers early on to enable myself an easy transition into freelance work. How long do I need to stay within a part time job to make this work? What is my turnover for the year? How do I manage that transition period? Making sure to pay the bills but equally enjoying the work that I do.
I have worked with charities before in the past and the money I received was entirely dependent on what they had t offer me, not the other day around. I've received anywhere from £100-£250 per project. I was young and naive, I didn't have the knowhow or skills to invoice and didn't know how to value my time or my offering as an artist.
Now that I have that experience, a clearer portfolio and a better understanding of how things work from this webinar, I feel much better prepared for future endeavours!
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