Financial details, Business startup information & Location research
Provided here is the contribution Me and Joe made, he gathered an excellent initial body of research were we both went onto expand on in our own ways.
The skeleton of the business.
Funding initial startup ;
Small Business Grants / All publicly funded schemes are designed to encourage new and growing businesses, to bring wealth and ultimately create jobs. For this to happen the government sections a available proportion of taxpayers money to help and encourage enterprises through small business grants. This cash is then distributed through a variety if ministries, departments and agencies. Government grant resource the business finance support finder this is a great tool to help those starting businesses find relevant funding suited to their needs and allow you to customise the search by your business location, size and type of business activity.
Direct Grant;
This is a cash award, which usually given out for activities sun as training, employment, development, and investment projects. With a direct grant most schemes usually require the company involved to put up around 50% of the cost. The business finance support finder directory has over 300 agencies listed such as UK businesses innovation organisations the Technology Strategy Board. The directory also features various local grant providers which are facilitated by the governments £3.2 billion Regional Growth Fund. These are catalyst for growth which has direct grants of £5,000 to £50,000 available for start-ups in the North West of England.
Soft Loan;
A soft loan is a special type of grant where the terms and conditions are of repayment are more generous than they would be under any normal financial circumstances. Either the interest rates maybe less or possibly thee could be no interest rates at all. Plus you can also have an extended payback time allowing you to stretch the repayment over a long period of time. This is possibly one of the most popular loans for small businesses as it has helped over 10,000 start ups with over £50million invested. For young entrepreneurs aged between 18-30, The Prince's Trust provides soft loans of up to £4,000 as well as support for your business idea, with interest capped at 3% and repayments spread between two and five years this is ideal if you need that extra cash burst to complete all the less important small sections of the business.
Equity Finance;
This is a capital sum injection into the business and the provider of the funds takes an equity share of the enterprise. When the value of the business increases the stake can then be returned. However unlike venture capitalised, the expectations and requirements of the providers of public funds are usually less demanding.
Angel Investors ;
This is very popular and expanding segment of funding SEIS (Seed Enterprise Investment Scheme) This is designed to help smaller higher risk trading companies to raise finance by offering a range of tax reliefs to investors who buy new shares in the company. Obviously this wouldn't be something we would like as personally i think the business should be fully owned by the original four members it gives the team a deeper role allowing us to control the business 100% it also doesn't complicate matters and potential involve other investor that could possible hold a considerable share in the company if it folded.
Innovate UK Smart Grants;
The smart grants scheme provides grants for startup companies using three different variations
One. Proof of market , 60% match funds, £25,000
Two. Proof of concept, 60% match funds, £100,00
Three. Proof of development, 45% match funds, £250,000
Creative industry Finance;
This is a programme designed to assist creative and cultural enterprises in securing the finance and investment needed to develop and grow. The programme is tailored and suited to your specific needs it can offer up to £300,000. Paired with the national lottery it also extends it reaches into networking and supplying business advisors.
For the loan / grant the initial business plan would require much start up cost as we would be running a monthly rent with the easy option of backing out with only one month rent in advance needed. Potentially the only thing needed to secure would be the four Apple Macs and the two printers these could be bought out right with possible discounts from the Apple store using the business discount when buying more than one. Personally we think a grant from the government or the creative industry finance awarding grants to start-up companies through proof of a good business plan, both offer great financial advise and support where needed.
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/ Costing - Advisors.
Looking into location - Duke Studios Leeds
Renting a studio space would be most beneficial for our start up business as it allows the team to have a location/bases of operation to work from within the city centre. We would have to rent a studio space instead of desk rental due to the team having four members. If Duke Studios were the place we started our project from it would allow the team to have every possible facility and accessory possible to produce our work. The price starts at £360pm which split between four comes to £90 each.
Looking into location - The Art House Wakefield
The art house provides space, time and support to developing creatives. Within the Art House there are multi-disaplinary fractions within design allowing the possibility to collaborate or help fellow workers creating a community on sight. They hold exhibitions and talks throughout the year offering education and assistance to those who rent work spaces.
Costing for individual items / bills.
Studio Space £300 - £400pm
Apple Mac x4 £4,000 - £5,000 or £400pm
A3 printer x2 £200 - £300 or £50pm
Cartridges £30pm
Adobe CC Monthly Subs £50 - £100pm
Internet access/telephone £100pm
Utilities, Gas/Electricity/water £150pm
Insurance £30pm
Materials £150pm
Equipment Costs £100pm
Misc / Expenses £400 - 500pm
Monthly Runnings 2,010 thats minus the outright buys of the mac's and printers. So that is £502.5 a week on a 4 week month then divided by 40 hours the total comes to £12.60 per hour (rounded.) Obviously we would need to turn over a profit, this is an initial idea and there are possibly areas for change create better budgeting strategies and make things cost effective such as expenses and bills these could be cut by being more aware and efficient.
Crunching the Numbers / Refining
Studio Space / Art House (Bills Inc.) £200pm
Apple Mac x4 £4,000 - £5,000 (to buy)
/£400pm
A3 Printer x2 £200 - £300 (to buy)
/£30pm
Cartridges £30pm
Adobe CC Monthly Subs (Creative Suite) £50 - £100pm
Internet Access / Telephone (BT) £56 - 66pm
Insurance (Arts & Crafts) £40pm
Misc £200pm
Possibly looking for an accountant this could greatly benefit the company in later life, if we expanded or started taking on a great amount of work. Writing up the records should be undertaken regularly – at least monthly and may best be undertaken by the accountant visiting your premises. Providing the basic information is well maintained this might take two to three days a month which might cost £1,000 per month. However, if you can find a good book-keeper you should be prepared to pay £20+ per hour, although the level of skills will be lower, they should be familiar with the way accountants prepare annual accounts to prevent unnecessary duplication. On the other hand, if you use the accountant who prepares the annual accounts, the costs of the annual preparation should be less due to the day-to-day bookkeeping undertaken
So from this revised and researched plan i found better prices to accommodate our needs by actually going through websites such as BT for the internet and telephone, I found a better suited studio space for our needs offering a cheaper price and more possibilities for growth, the location of the At House is directly behind a train station which allows commuting to clients or having them visiting us very easy, So the monthly cost for this revised plan would be £1,066 which would make the weekly costs £266.50 (Per four weeks) and the hourly rate £6.66 per hour. This is obviously the break even cost this would then be updated to allow a profit for the business. We could possibly charge £35 - £40 this would allow the hourly rate to rise for each member to £10 (rounded) Obviously this is due to our company being aimed at smaller / local start up businesses which the Art house provides perfectly, There are many office developments happening around the location allowing us to have possible clients from the get go. A plan for the business would be to grow the company and up the hourly rate as other businesses grow around us.
Other Possible rented spaces.
Rochdale Office / Studio Space (£60.00pw)
Sheffield / Creative space (£85.00pw)
SunnyBank Mill / Creative Space (£95.00pw - £125.00pw)
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The type of business.
Limited company - A limited company is an organisation that you can set up to run a business, its responsible in its own right for everything it does and its finances are separate to your personal finances. Any profit it makes is owned by the company, after it pays corporation tax then the company can share its profits. Every limited company has members - the people or organisations who own shares in the company. As a director of a limited company the laws say you must try to make the company a success, using skills, experience and judgement, make decisions that benefit the company not yourself. Keep company records and report changes to company houses and HM Revenue and Customs (HMRC)Make sure the companies accounts are up to date, true and fair. A few things can be sorted from the aid and hiring of an account however the director(s) are still legally responsible.
Sub sections of limited companies.
Private company limited by guarantee - Directors or shareholders financially back the organisation up to a specific amount if things goes wrong.
Limited by shares - This means the share holders are responsible for the company's financial liabilities they are limited to the value of shares that they own but haven't paid for. Company directors aren't personally responsible for debts the business can't pay if it goes wrong, as long as they haven't broken the law.
Public limited company - The company's shares are traded quickly on a market, such as the London stock exchange.
Unlimited Company - is a hybrid company incorporated either with or without capital. The joint, several and non-limited liability of the members or shareholders of the company to meet any insufficiency in the assets of the company (to settle its outstanding liabilities if any exist) only applies upon the formal liquidation of the company. an unlimited company is similar with its counterpart the limited company where its members or shareholders have no direct liability to the creditors or security holders of the company during its normal course of business or existence.
Sole Traders - A sole trader describes any business that is owned and controlled by one person, although they may employ workers, eg a newsagent's shop. Individuals who provide a specialist service like hairdressers, plumbers or photographers, are also sole traders. Sole traders do not have a separate legal existence from their owner. As a result, the owners are personally liable for the firm's debts, and may have to pay them out of their own pocket. This is called unlimited liability
Partnership - Partnerships are businesses owned by two or more people. A contract called a deed of partnership is normally drawn up. This states the type of partnership it is, how much capital each party has contributed, and how profits and losses will be shared. Doctors, dentists and solicitors are typical examples of professionals who may go into partnership together. They can benefit from shared expertise, but like the sole trader, have unlimited liability. A partnership can also have a sleeping partner who invests in the business but does not have dealings in the day to day running of the enterprise.
Unlimited liability - When you organize your business as an entity with unlimited liability, all your personal assets could be on the line to satisfy any debts of the company. For example, if your business can't repay its loans or gets sued and found liable, you're on the hook if your company's assets aren't enough to cover the debt or damages. That means your personal bank accounts, investments, car or even your home could be taken. Entities with unlimited liability include sole proprietorships and general partnerships.
Limited liability - Limited liability entities, on the other hand, restrict the owner's liability for the debts and liabilities of the company to whatever has already been invested. For example, say you put £100,000 into a limited liability entity. If a creditor sues the company to recover money it loaned to the company, the creditor can only get the assets of the company. So, you could lose your £100,000 investment, but you couldn't lose any of your personal assets. Entities with limited liability include limited liability companies, limited liability partnerships and corporations.
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My contribution and expansion
To expand on the locations Joe looked at I had a look about at some studios, some outside of Leeds some further afield and analysed there benefits.
East Streets art have over 200 studios accross 4 main locations in beautifully renovated buildings across West Yorkshire, the good thing about here is the fact that you only need a months notice to leave. So if there was issues with the business not working there would be no ties with lease holdings and rent of space.
I like the fact theres lots of disciplines in this location too, a nice diverse creative atmosphere that resonates well with our business model.
Sunny Bank Mills offers Office & Studio space meaning we would be within lots of business areas, professional, corporate and creative. This would give us opportunity to produce work inhouse for some of these non creative business's if the opportunity came allowing us to keep that personal and friendly relationship.
The Exhibition space also gives us opportunity to hold events to achieve more external recognition.
Located outside of Leeds in the Pudsey area its a little far afield, a City Centre postcode would look more professional, I know its only a small detail but I feel the postcode and area will effect clients perception of our professionalism.
Duke Street studios located near the bus station in Leeds City Centre gives close travel points for meeting clients further afield, a little far from the train station but a city bus service operates to combat this problem. The main benefit of choosing here would be the connections, theres lots of external opportunity available through the studio. It operates like an agency and a perfect area for up and coming designers to grow through recommendation and the fact that you work out of Duke street studios is benificial in its self in terms of word of mouth promotions.
Melbourne Street Studios offer studio space, although its more office space it doesn't have that creative vibe about it that would benefit a good working environment it is close to lots of potential local business's the cost for a group of people isn't too bad either, working out at around the same price as Duke street studios.
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