Freelance Haven: Money Matters

Freelance Haven: Money Matters

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Thursday, 27th January 2011

'Freelance Haven: Money Matters' focused on key financial concerns about working self-employed in the screen industries.

Here are our speaker's top tips for freelancers trying to keep their finances under control!

Steve McKay, Freelance Cameraman discussed how he balances life as a freelance cameraman with setting up his own business:

1. You need to maintain the balance between work enjoyment and maintaining financial stability.
2. It is often necessary to balance industry work with non-industry related work in order to do this. It also allows you to prepare for low periods of work.
3. It is essential to attend networking events within the industry to gain contacts. Research free industry and business support to help you with your development.

Fiona Pilgrim, Professional Development Officer for the Cultural Enterprise Office, highlighted areas of support for freelancers and issues to consider:

1. CEO has various free support available to freelancers and those thinking of setting up a business. General Business Advisers are located in 4 cities and access to Specialist Adviser Bob Last is available on an ad-hoc basis.
2. Consider what you are passionate about, what you are best at and balance that with what is financially effective for your business. This will help you maintain motivation and sustainability within your project.
3. Costing and pricing is relevant to freelancers when they are promoting their work within the industry. CEO has a downloadable factsheet and formula for calculating your daily rate.

Bob Patterson, retired Bank Manager gave personal anecdotes about his 37 years in banking and offered insights into the mind of your bank manager:

1. Bank managers look for a reason to lend you money as they in turn will earn from doing this!
2. Two key drivers for lending you money are a) your business risk assessment and b) your ability to repay your loan.
3. Your business plan is an essential tool when applying for funding. It simply should state a) where you are now, b) where you would like to be, and c) what steps you intend to take to get there.
4. You should demonstrate a belief in your project or business; have some industry knowledge and be aware of technical advances within your industry.
5. Other considerations include a) the purpose of lending the money, b) are you asking for the right amount, c) have you budget planning in place, d) what are your sources of repayment and e) are you contributing financially to the project. This will all be considered and a decision will be reached and fees and interest rates will be calculated based on your risk assessment.
6. Remember that your bank manager can also provide a sounding board for your project. Most banks should have access to a database of knowledge on sector analysis across the UK and Europe.

John Sheddan, Chartered Accountant stressed the importance of good financial planning:

1. Research which bank can offer you the best deal.
2. Your business plan should highlight potential risks and what contingency plan you have in place for any unplanned periods of failure.
3. Monitor and adjust your business plan as your project develops. Do not just use it in the initial planning stages as it can help you monitor your progress and adapt to unforeseen issues you hadn’t planned for initially.
4. Planning to pay your taxes is essential. Think about investing part of your income in something like a tax-free ISA so that a) if you earn enough to pay tax you will have some interest from this or b) if you don’t earn enough you will then have some tax-free savings.
5. Remember to keep a good paper-trail of your business and some type of simple log of your financial incomings and outgoings. Remember to monitor your cashflow as well as profit income as cashflow is an essential part of any business.

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