OUGD502 PPP2: Life's a pitch Finance and costing

OUGD502
PPP2
LIFES A PITCH
FINANCE AND COSTING

We decided that we would operate as a private limited company (limited by shares) but then realised that operating in spain may mean different business models, through research we found that it didn't make a difference.

• Sole Trader/Sole Proprietor (Empresario Individual or Autónomo)
• Partnership (Sociedad Civil)
• Limited Liability Company (Sociedad Limitada/SL or Sociedad de Responsabilidad Limitada/SRL)
• Public Limited Company (Sociedad Anonima /SA)
• New Enterprise Limited Company (Sociedad Limitada Nueva Empresa/SLNE)
• Co-ownership (Comunidad de Bienes/CB)

http://spain.angloinfo.com/working/starting-a-business/business-structures/

The standard Spanish Private Limited Company is the SL, the Sociedad Limitada and is very similar to the private limited company in other EU countries. The formation procedure normally takes two weeks and as an alternative; we can supply you with a ready made company. An SL company requires a registered office, this will initially be in Madrid, but is easily changed if required.

Incorporating a Sociedad Limitada (SL)

The formation procedures of a company is as follow:

Company Name

We apply for a company name certificate from the Mercantile Register, confirming that your company name is acceptable and not already registered. This certificate for company name clearance is important as it is given to the notary, and a copy is also given to your bankers and the tax authorities.

Share Capital

The share capital is €3000 and the shares can be issued for cash or through a donation of assets.

There is no public register of shareholders of a Spanish company, whilst the initial shareholders are stated in the deed of incorporation, any subsequent changes of shareholders are by a notarial deed, which is not filed at the Mercantile Register.

The shares of a Spanish limited company can be transferred at any time and are sold through signing an agreement in front of a Notary.

Registered Office

All Spanish SL's must have a registered office. You must select a Spanish registered office for your corporation.

VAT Number 

All Spanish companies have a VAT number when they are incorporated, so your company can trade immediately.
This VAT number is not on the VIES register, we can apply for registration on the VIES register, this normally takes up to 2 months.  

http://www.formacompany.com/en/spain/spain-company-formation

• What are your costs, charges and financial considerations?

https://www.google.co.uk/search?q=offices+in+barcelona&oq=offices+in+barcelona&aqs=chrome..69i57j0l3.5818j0&sourceid=chrome&ie=UTF-8#q=offices+to+rent+near+plaza+catalunya+barcelona&safe=off

http://www.instant-offices.es/centros-de-negocios/barcelona.aspx?source=googleuk21global&gclid=ck6g4bottb0cfzdktaodwd0atg

http://www.matchoffice.com/office/spain/catalonia/barcelona/?gclid=CMmfrLSTtb0CFQ_HtAodzzUA4w

http://www.transartists.org/studio-spaces

http://www.barcelona-metropolitan.com/living/working/renting-business-space-in-barcelona/

- http://www.homesession.org/EN/01_philosophy/candidResid.php

Combo meal in fast food restaurant (Big Mac Meal or similar)	€7
1/2 Kg (1 lb.) of boneless chicken breast	€3.66
1 liter (1 qt.) of whole fat milk	€0.89
12 eggs, large	€2.03
1 kg (2 lb.) of tomatoes	€1.51
500 gr (16 oz.) of local cheese	€5.91
1 kg (2 lb.) of apples	€1.86
2 kg (4,5 lb.) of potatoes	€1.84
0.5 l (16 oz) domestic beer in the supermarket	€0.80
1 bottle of red table wine, good quality	€7
2 liters of Coca-Cola	€1.67
Bread for 2 people for 1 day	€0.96
Housing
Monthly rent for 85 m2 (900 Sqft) furnished accommodation in EXPENSIVE area	€1,271
Utilities 1 month (heating, electricity, gas ...) for 2 people in 85m2 flat	€131
Internet 8MB (1 month)	€36
40” flat screen TV	€480
Microwave, known brand, 800/900 Watt	€89
Laundry detergent (3 l. ~ 100 oz.)	€4.95
Hourly rate for cleaning help	€11
Clothes
1 pair of jeans (Levis 501 or similar)	€78
1 summer dress in a chain store (Zara, H&M, ...)	€26
1 pair of sport shoes (Nike, Adidas, or similar)	€79
1 pair of leather business shoes	€85
Transportation
Volkswagen Golf 2.0 TDI 140 CV 6 vel. (or equivalent), with no extras, new	€20,242
1 liter (1/4 gallon) of gas	€1.44
Monthly ticket public transport	€46
Taxi trip on a business day, basic tariff, 8 Km. (5 miles)	€14
Personal Care
Medicine against cold for 6 days (Frenadol, Coldrex, ...)	€5.55
1 box of 32 tampons (Tampax, OB, ...)	€4.65
Deodorant, roll-on (50ml ~ 1.5 oz.)	€2.70
Hair shampoo 2-in-1 (400 ml ~ 12 oz.)	€2.90
4 rolls of toilet paper	€1.40
Tube of toothpaste	€1.78
Standard men's haircut in expat area of the city	€14
Entertainment
Basic dinner out for two in neighborhood pub	€27
2 tickets to the movies	€17
2 tickets to the theater (best available seats)	€79
Dinner out for two in Italian restaurant with wine and dessert	€52
1 cocktail drink in downtown club	€9
Capuccino in expat area of the city	€2.24
1 beer in neighbourhood pub (500ml or 1pt.)	€2.68
iPod nano 16GB	€154
1 min. of prepaid mobile tariff (no discounts or plans)	€0.28
1 month of gym membership in business district	€55
1 package of Marlboro cigarretes http://www.expatistan.com/cost-of-living/barcelona-spain	!

Average and Median Monthly Salary Comparison in Spain in Graphic Designer

Maximum: 6,000 EUR

Average: 1,933 EUR

Median: 1,300 EUR

Minimum: 1,100 EUR

Graphic Designer VS Advertising / Grapic Design / Event Management VS All Jobs

Average Salary in Spain in Graphic Designer	1,933 EUR
Average Salary in Spain in Advertising / Grapic Design / Event Management	2,420 EUR
Average Salary in Spain (all jobs)	2,639 EUR

http://www.salaryexplorer.com/salary-survey.php?job=54&jobtype=3&loctype=1&loc=203

- START UP COSTS -

• 3000 euros for share capital.
• start up costs - software licences - 3000 euros

                            - basic office supplies - 500 euros

                            - website domain - 200 euros

                            -  initial travel - 2000 euros

                            - business costs - 20,000 euros

• each member invests 2,500 euros = 15, 000
• santander (loan step up) - 15,000 - bank loan

............................................................................................

                            TOTAL - (28,700) rounded to 30,000 euros

- MONTHLY COSTS -

• 60 euros per head per week = 60 x 6 = 360 euros shopping expensies x 4 weeks = 1440 euros                                                                                                                        - 240 pp
• 60-80 euros per head per week = (avg.) 70 x 6 = 420 euros living expenses = 1680 euros                                                                                                                           - 320 pp
• 300 euros per head per week = 300 x 6 = 1800 x 4 weeks = 7200 euros.
• all have mac computers.
• someone has a printer
• monthly rent costs (including utility and internet costs) - 1600 euros / 6 = 266 pp
• monthly insurances per head per month - approx 300 euros x 6 = 1800 euros - 300 pp
• travel per head per month - 150 euros x 6 = 900 euros - 150 pp
• business costs (external printing, other design costs, other materials, stock) - 1000 euros per month - 166 pp

............................................................................................

 - TOTAL ANNUAL COSTS = (8,420 rounded to) 8500 euros per month

                                                                        1416 per person

                                                                           

                                                                                                   

                                                                       x 12 = 102,000

                                                                       + (7200 x 12 =) 86, 000 

                                                                        = 188, 400 euros

............................................................................................

- MONTHLY WAGES - 

                                                                       188,400 / 12 = 15, 500 / 6 = 2,500 euros per month

                                                                                             2,500 / 4 weeks = 625 euros per week

                                                                           625 / (7 hr day x 5 days =) 35 = 17.8 rounded =

                                                                                                                       18 euros per hour

                                                                                       +10% comission (if job completed before

                                                                                                                 deadline)

- PAY/CHARGES -

                                                                         wages - 60 + 80 = 140 pppw (living/food) 

                                                                                           x 4 = 560 pppm

                                                                                           x 12 = 6,720 pppy

                                                                                                    300 pppw (leisure)

                                                                                           x 4 = 1,200 pppm

                                                                                           x 12 = 14, 400 pppy

                                                                                          14,400 + 6,720 = 21, 120 euros

                                                                                                     rounded = 22, 000 euros

                                                                          charges - 

                                                                          by hour (if job shorter than 5 working days) =

                                                                                                                  18 euros per hour

                                                                          by week (if job shorter than 1 month) = 

                                                                                                         (approx.) 1000 per week

                                                                          above 1 month =

                                                                                                           negotiated prior to job

- PROJECTIONS - 

                                                                                        

                                                                             to break even -

                                                                                        

                                                                                        188 week long jobs

                                                                      (approx.) 47 month long jobs (avg. 4000 euro pm)

                                                                      (approx.) 13 quarter yr long jobs (avg. 15,000 pm)

3000 share capital

27,000 start up costs

..........................................

30,000 total start up funding

8,500 total monthly costs (6 persons)

102,000 total annual costs

.........................................

11.50 per hour

(10% speed commission)

according to economy minister spainish econ to expand by 1.5 percent in 2014/15 - figure increased from 1.0 this year alone.

moodys/standard n poors rating raised outlook of sp econ to stable from negative - improvement.

now is the time to establish business

santander, reports financial times, plans to write 30 bn euros to small and medium size businesses.

OUGD502 PPP2: Lifes a pitch Design style

OUGD502
PPP2
LIFE'S A PITCH
DESIGN STYLE

One of my specific roles was to find examples of design aesthetic that we as a studio would like to design.

MUSEUM BRANDING:

MUSIC FESTIVAL BRANDING:

POSSIBLE LOCAL CLIENTS:

Sonar Music festival

Estrella Beer

Barcelona fashion

OUGD502 PPP2: Life's a pitch, Studio spaces

OUGD502
PPP2
LIFE'S A PITCH
STUDIO SPACES

Garcés De Seta Bonet Arquitectes

This is a studio space in Barcelona with beautiful architecture, two floors and a lot of work space. However the location of this studio is very discreet and in the middle of a forrest in Barcelona which would be quite difficult for our agency to meet other clients and creatives.

Price: Not Disclosed / Negotiable.

BCN

It consists of 50 offices with a variety of rentable surfaces (15,18, 22, 28 and 35 m² built). Prices include the community costs (security, cleaning, wifi, maintenance, air conditioning, etc..). Consumption of electricity and community water are billed separately. The spaces have community toilets, meeting rooms, conference room, office, canteen and a community of professionals. The costs of this space looks very reasonable and also having a bills included, However the atmosphere and overall size of the building didn't seem big enough and we would still have to consider living space.

Price: €265 to €495 a month. 

Talent and Co

TALENT&CO is a community of changemakers, game-changers, pioneers, social artists, and entrepreneurs. By working in the same flexible office space we walk an unknown path together, co-create & collaborate, inspire, expand and grow.

Address: Carrer Llibertat, 13, 08012 Barcelona

Price: €50 a day

Betahaus

betahaus | Barcelona is a social space, both physical and virtual, designed for the development of independent creative professionals and entrepreneurs with an open mind.

Address: Vilafranca 7 08024 Barcelona

€229 a month

Pangea

Pangea Coworking is a cool and creative place. Its sole design encourages human relationships and fosters creativity. Every inhabitant helps and learns from each other, because everybody here understands that it is in that very moment when magic happens.

Price: €200 a month

Home Session

A two floor studio space in the centre of Barcelona with 5 tramline and 7 bus stations in the area. The second floor acts a living space and is located in the centre of Barcelona, where other creative industries lay.

Price: €280 a month 

Useful guide to other spaces.

From our research, we presented the potential spaces to the rest of the group and as a collaborative we decided to go ahead with home session studio space as it was a prime location, a reasonable price and also a living space for the rest of the designers which has will enable us to cut costs also.

Interior Design

Despite us picking this studio, there were no actuall images of the space online, so I took the initiative to mock up some designs that suited the rest of our brand guild lines for the studio. I took some images from pinterest and mocked up our logo and other interior decorations to the design.

OUGD502 PPP2: Life's a pitch branding guidelines

OUGD505

PPP2

LIFES A PITCH

BRANDING GUIDELINES

Below are the branding guidelines that we decided on as a group, I am really happy with the logo that jasper designed, We each voted on which logo we liked best and this one was the resounding success.

Me and J'nae reflected back to the Film4 branding guidelines that were presented to us in a previous module as a source of influence and considered the arrangements of the logo and its size.

Presence

Next we created mockups of what our design presence would look like in situation.

This is a collection of pieces that represent Equilibrio's design presence, which everyone in the group had an input in, but was further developed by Bobby and Jasper.

OUGD502 PPP2: Life's a pitch Communication

OUGD502
PPP2
LIFES A PITCH
GROUP COMMUNICATION

Despite our group meetings we also set up a Facebook contact page throughout the collaboration were could constantly share ideas after meetings and things to consider which was really beneficial in us developing our work and receiving design work that we had completed.








We often posted tips on building a brand, pictures, to-do lists and regularly update each other on what we had achieved. In doing this I think it kept everyone in contact and in the know with what was going on with the collaboration.

OUGD502 PPP2: Presentation questions

OUGD502

PPP2

PRESENTATION QUESTIONS

1. What is a Sole Trader

A sole proprietorship, also known as the sole trader or simply a proprietorship, is a type of business entity that is owned and run by one individual and in which there is no legal distinction between the owner and the business.

2. What is a Partnership

The state of being a partner or partners.
An association of two or more people as partners.

3. What is a Limited Liability Company

A private company whose owners are legally responsible for its debts only to the extent of the amount of capital they invested.

4. What is a Limited Company.

A private company whose owners are legally responsible for its debts only to the extent of the amount of capital they invested.


Sole traders

If you’re a sole trader, you’re running your own business as an individual. This is known as being ‘self-employed’. You can keep all your business’ profits after you’ve paid tax on them.

You can take on staff - ‘sole trader’ means you’re responsible for the business, not that you have to work alone.
Your responsibilities

You’re responsible for:

-your business debts
-bills for anything you buy for your business, like stock or equipment
-keeping records of your business’ sales and expenses
-sending a Self Assessment tax return every year
-paying Income Tax on the profits your business makes and National Insurance
-Naming your business

You can use your own name or trade under a business name. There are rules on using a business name. For example, you can’t:

-use the terms ‘Limited,’ ‘Ltd’, ‘public limited company,’ ‘plc,’ ‘limited liability partnership,’ ‘LLP’ or their Welsh equivalents
-use sensitive words or expressions unless you have permission
-suggest a connection with government or local authorities
-use a name that is too similar to a registered trademark or an existing business in the same area or sector
be offensive

You must include your own name and business name (if you have one) on any official paperwork, like invoices and letters.


Registering as a sole trader:

Being a sole trader is the simplest way to run a business, and does not involve paying any registration fees, but you must register as self employed. Keeping records and accounts is straightforward, and you get to keep all the profits. The difference is that you are personally liable for any debts that your business runs up, which can make this a risky option for businesses that need a lot of investment.

It is easy to start up as a sole trader. Simply register with HMRC within three months of the month you started up. They will also then send you the form you need if you decide to register for VAT.


A sole trader's accounts:

As a sole trader and a conventional partnership, your accounts must follow accepted accounting practice to give a true and fair picture. But the exact form of accounts is not laid down by law. In practice, this means you do not have to produce a balance sheet. It would, however, be advisable to do so to impress your tax inspector or bank manager and to help you to keep a proper check on the financial position of your business.

It is possible to do your own accounts rather than employ an accountant. If your business is very simple, you could set up your own accounting system using a spreadsheet, but generally it is better to use an off-the-shelf software package.

Getting your accounts audited as a sole trader:

As a sole trader you do not have to get your accounts audited, if you do not want to. You may consider doing so, if the cost would not be too exorbitant, as it can help in dealings with your tax inspector. It may also help you if you need confirmation of income from your business - for example, to get a mortgage to buy a house or make contributions to some personal pensions.

Paying tax and national insurance as a sole trader:

As a sole trader you pay two types of national insurance contribution (NIC). If your earnings are above a lower threshold, you pay flat-rate Class 2 contributions of £2.10 a week in 2005-6. In addition, you pay Class 4 contributions as a percentage. In 2005-6, Class 4 NICs are 8 per cent of profits between £4,895 and £32,760 and an additional contribution of 1 per cent of profits above the upper profit limit.

The business of a sole trader does not have a seperate identity from the individual concerned. So your profits are added to any other taxable income you have and subject to income tax if the total comes to more than your personal allowance.


Partnership

Register for Self Assessment

You’ll need to choose a ‘nominated partner’ - the partner responsible for managing the partnership’s tax returns and keeping business records.

The nominated partner must register the partnership and themselves for Self Assessment. The other partners register separately, they usually do this after the partnership is registered.

In a business partnership, you’re running a business as a self-employed individual but all the partners share responsibility for the business. You can share all the profits between the partners and each partner pays tax on their share of the profits.

Both the nominated partner and individual partners are responsible for:

-sending their personal Self Assessment tax return every year
-paying their Income Tax on their share of the partnership’s profits
-paying their National Insurance
-any losses the business makes
-bills for the business - eg when they buy stock or equipment

The nominated partner must also send the partnership’s tax return.


Naming your partnership

You can use your own names or trade under a business name. There are rules on using a business name. You can’t:
use the terms ‘Limited,’ ‘Ltd’, ‘public limited company,’ ‘plc,’ ‘limited liability partnership,’ ‘LLP’ or their Welsh equivalents
use ‘sensitive’ words or expressions unless you get permission
suggest a connection with government or local authorities
use a name that is too similar to a registered trademark or an existing business in the same area or sector
be offensive

You usually have to include all the partner’s names as well as your business name (if you have one) on any official paperwork, like invoices and letters.




Limited Liability Company



What is a Limited Liability Company?

Becoming a Limited company means that your losses in the company are limited to what the company owns. If, for example, you invest £500 in the business and it gets sued by a customer right away, you lose £500. If you grow the business over time, and it buys apartment buildings or creates software, someone who sues the company may be able to take those things away.

However, if you have obeyed the rules associated with running a limited company, your personal assets (which you may have purchased through a generous salary paid by the limited company you own) will almost certainly be protected.

A limited company is a “fictional person” that must pay for it’s own mistakes.

If you run your business as a sole proprietorship rather than as a limited company, you are your business. So any mistake you, your employees or contractors make operating the enterprise can result in you being sued and your personal assets being lost.

I think it is now clear why someone who runs large rock concerts, creates construction equipment, builds buildings needs the protection of a limited company. They need to limit their liability.

If you have multiple partners running a business that is not a Limited company, all of their assets are on the line for the mistakes their business makes.

There is a way to limit liability to partners in an enterprise (a limited liability partnership) but generally speaking entrepreneurs starting a business decide they are either going to be sole proprietors with unlimited liability or limited liability companies instead.




Limited Company

What a limited company is

A limited company is an organisation that you can set up to run your business.

It’s 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. The company can then share its profits.
Ownership

Every limited company has ‘members’ - people or organisations who own shares in the company.

Directors are responsible for running the company. Directors often own shares, but they don’t have to.
Legal responsibilities

There are many legal responsibilities involved with being a director and running a limited company.

Most limited companies are ‘limited by shares’.

This means that the shareholders’ responsibilities for the company’s financial liabilities are limited to the value of shares that they own but haven’t paid for.


Example


A company limited by shares issues 100 shares valued at £1 each when it’s set up. Its 2 shareholders own 50 shares each and have both paid in full for 25 of these.

If the company goes bust, the maximum the shareholders have to pay towards its outstanding bills is £50 - the value of the remaining 25 shares that they’ve each not 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.

OUGD502 PPP2: Life's a Pitch initial meet up

OUGD502

PPP2

LIFES A PITCH

INITIAL MEET UP

For our first meeting as group we discussed what the nature of business was going to be, our roles within the group, the location of the business and the name.

To start our discussions, I took the role of the scribe, writing down everyones idea's and contributions to the group for the first meeting.

Nature of the business



From this brainstorm we all added things that we individually liked in our own professional practice. After allocating these ideas we specifically narrowed our design agency down to being a branding and identity agency that focuses on events; ranging from fashion, music and even food based events.

Group Name






Due to our group having more than 5 like the rest of the groups we experimented with the idea with incorporating the number 6 into our name. However when considering the location of our studio we expanded on these names and came up with the name Equilibrio which is a spanish word meaning balance and harmony. We felt that this was best fitting to our brand and design studio as we discussed that there would be equal shares in the company.
Location

As a collective we wanted have the company abroad and chose Barcelona due to some of our favourite agencies being based there and also it's a good location for graphic design and other creative outlets. Looking at international graphic design and studios some of the favourite agencies in the group were Lo Siento and Solo which are studios we aspired to be like.

After making some of these crucial decisions in the development of our work we wrote out an agreement contract where we could assign roles within the collaboration and give John an insight into what we were about.


I think with the first group meeting we had quite a success, although it did take a while to find out the outcomes above, we all considered everyones interests and tried to make it equal for everyone.