Friday, 25 April 2014
Wednesday, 23 April 2014
OUGD502: Personal and Professional Practice 2 - Studio Brief 3: Life's A Pitch Costings
We began by working out how many hours a year we could work:
The average working week is 40 hours, with five of us this means it would be 200 hours
Average amount of holidays per year: 4 weeks
Taking bank holidays into account which is 8 days which we rounded to 7 to give us 5 weeks holiday
Hours per year x 47 weeks = 9, 400
Divide this by 5
Costs for the business:
Rent
Travel expenses
iMacs
Printer
Laminator
Wacom tablets
Insurance
Salary
Loan payments
We chose a business loan from Halifax which seems quite good, we can choose from 1 to 10 years repayment with 7.9% interest rate per year.
We worked out that we would need to charge £12.50 an hour to cover our cost which seemed much to low and we must have worked out something wrong, we therefore referred to the document online and from this we saw we had left out a few things. We also discovered that we had gotten the amount for rent wrong, the amount we thought was per month was actually per week.
Although the costs still cam out low they were more realistic than the first figure so we left it at that.
However, we were still not confident with the figures and therefore Emily, who has a Business Studies A Level looked over the costs again to see what was missing. She realised we hadn't included our salary or start-up costs which alters all the figures for our costs, loans and how much we would charge.
Costs
Rent
£50 per desk per week
Office - 6 desks
Building charges 20 % tax on top of price
£50 x 6 = £300 per week
£300 x 52 weeks = £15, 600 a year
£15, 600 / 12 months = £1, 300
£1,300 + 20% tax = £1, 560
Cost Per Month = £1, 560
Salary
Average wage of a junior designer = £22, 000 per year
Employees = 5
£22, 000 x 5 = £110, 000 per year
£110, 000 / 12 months = £9, 166.67 per month
Cost Per Month = 9, 166.67
iMac
Individual iMac = £1, 599
iMacs needed = 5
£1, 599 x 5 = £7, 995
Cost Per Month = £7, 995
Printer
One off cost = £145.20
Printer Supplies
Cost Per Month = £70
Wacom Tablet
Individual Wacom Tablet = £118.50
Wacom Tablets needed = 2
£118.50 x 5 = £237
Cost Per Month = £237
Laminator
One off cost = £175
Insurance
One off cost = £30
Food
Cost Per Month = £600
Utilities
Cost Per Month = £150
Accountant
Annual Charge = £1, 200
20% tax on top
£1, 200 + 20% tax = £1, 440
£1, 440 / 12 months = £120
Cost Per Month = £120
Stationery
One off cost = £400
Travel
Cost Per Month = £1000
Start Up Costs
£1, 560 (rent)
£9, 166. 67 (salary)
£7, 995 (iMacs)
£145.20 (printer)
£70 (printer supplies)
£237 (tablets)
£145 (laminator)
£30 (insurance)
£600 (food)
£150 (utilities)
£120 (accountant)
£400 (stationery)
£1000 (travel)
Final Start-Up Cost = £21, 648.87
Emily was then able to work out the monthly loan, we decided as a group that we repay the loan over a three year period, as after this point would be when we would consider moving and expansion.
Loan = £21, 648.87
Interest is 7.9 %
£21, 648.87 / 3 = £7, 216.32 per year
£7, 216.32 + 7.9 % interest = £7, 786.41
£7, 786.41 x 3 = £23, 359.23 ( total cost of loan)
£23, 359.23 / 36 months = £648.86
Monthly Expenses
£1, 560 (rent)
£9, 166. 67 (salary)
£7, 995 (iMacs)
£145.20 (printer)
£70 (printer supplies)
£237 (tablets)
£145 (laminator)
£30 (insurance)
£600 (food)
£150 (utilities)
£120 (accountant)
£400 (stationery)
£1000 (travel)
£648.86 (loan)
Cost Per Month = £13, 345.53
To work out our cost per hour Emily then worked out what are expense would be for the first year and then divide that by the number of business hours in a year.
Start Up Costs = £21, 648.87
Costs per month = £13, 345.53
Start Up Costs + (costs per month x 11) = Total Year Cost
£21, 648.87 + (£13,345.53 x 11) = £168, 499.70
First Year Expense = £168, 499.70
Hourly Rate = first year expenses / hours working
£168, 499.70 / 9400 = £17.92 per hour
In order to have a margin we had previously decided to charge the client £40 per hour which we thought was a reasonable amount as we wouldn't want to put off start-up businesses with high hourly costs.
With 20% tax our cost per hour = £21.50
For every £21.50 we will make £18.50 profit
As this is the first year for our business, realistically we would not be working all workable hours, we agreed that we would mostly likely be work 60% of the workable hours with the other 40% being self promotion, or even work free.
Using this Emily then worked out what our turnover, gross and net profit would be. As we are a limited company we will have to pay 20% corporate tax
Turnover
Hourly rate x hours = Turnover
60% of 9400 = 5460
£40 x 5460 = £225, 600
Turnover = £225,600
Gross Profit
Turnover - expenses = Gross Profit
£225,600 - £168, 499.70 = £57, 150.30
Gross Profit = £57,150.30
Net Profit
Gross Profit - tax = Net Profit
£57, 150.30 - 20% = £45, 720.24
Net Profit = £45, 720.24
Profit For First Year = £45, 720.24
In our first year are business makes a decent profit.
Emily then used this information to go on to work out the potential profits our second and third years. We agreed that in the second year we would probably be working 80% of the workable hours and the third 100%.
Are overall expenses would also go down in the second year as we would not have start-up costs.
Second Year
Yearly expenses = Monthly expense x 12 Months
£1, 560 (rent)
£9, 166.67 (salary)
£70 (printer supplies)
£30 (insurance)
£600 (food)
£150 (utilities)
£120 (accountant)
£1000 (travel)
£648.86 (loan)
Costs Per Month = £13, 345.53
£13,345.53 x 12 Months = £160, 146.36
Yearly expenses = £160,146.53
Working hours - 80% of 9400 = 7, 520
Turnover
Hourly rate x hours = Turnover
£40 x 7,520 = £300, 800
Turnover = £300, 800
Gross Profit
Turnover - Expenses = Gross Profit
£300, 800 - £160, 146.53 = £140, 653.47
Gross Profit = £140, 653.47
Net Profit
Gross profit - tax = net profit
£140, 653.47 - 20% = £112, 522.78
Net Profit = £112, 522.78
Profit for Second Year = £112, 522.78
Third Year
Yearly expenses = monthly expenses x 12 months
Monthly Expenses
£1, 560 (rent)
£9, 166.67 (salary)
£70 (printer supplies)
£30 (insurance)
£600 (food)
£150 (utilities)
£120 (accountant)
£1000 (travel)
£648.86 (loan)
Cost Per Month = £13, 345.53
£13, 345.53 x 12 = £160, 146.36
Yearly Expenses = £160, 146.36
Working Hours = 9400
Turnover
Hourly Rate x hours = turnover
£40 x 9, 400 = £376, 000
Turnover = £376, 000
Gross Profit
Turnover - expenses = Gross Profit
£376, 000 - £160, 146.53 = £215, 853.47
Gross Profit = £215, 853.47
Net Profit
Gross Profit - tax = net profit
£215, 853.47 - 20% = £172, 682.78
Net Profit = £172, 682.78
Overall profit for the first three years
The average working week is 40 hours, with five of us this means it would be 200 hours
Average amount of holidays per year: 4 weeks
Taking bank holidays into account which is 8 days which we rounded to 7 to give us 5 weeks holiday
Hours per year x 47 weeks = 9, 400
Divide this by 5
Costs for the business:
Rent
Travel expenses
iMacs
Printer
Laminator
Wacom tablets
Insurance
Salary
Loan payments
We chose a business loan from Halifax which seems quite good, we can choose from 1 to 10 years repayment with 7.9% interest rate per year.
We worked out that we would need to charge £12.50 an hour to cover our cost which seemed much to low and we must have worked out something wrong, we therefore referred to the document online and from this we saw we had left out a few things. We also discovered that we had gotten the amount for rent wrong, the amount we thought was per month was actually per week.
Although the costs still cam out low they were more realistic than the first figure so we left it at that.
However, we were still not confident with the figures and therefore Emily, who has a Business Studies A Level looked over the costs again to see what was missing. She realised we hadn't included our salary or start-up costs which alters all the figures for our costs, loans and how much we would charge.
Costs
Rent
£50 per desk per week
Office - 6 desks
Building charges 20 % tax on top of price
£50 x 6 = £300 per week
£300 x 52 weeks = £15, 600 a year
£15, 600 / 12 months = £1, 300
£1,300 + 20% tax = £1, 560
Cost Per Month = £1, 560
Salary
Average wage of a junior designer = £22, 000 per year
Employees = 5
£22, 000 x 5 = £110, 000 per year
£110, 000 / 12 months = £9, 166.67 per month
Cost Per Month = 9, 166.67
iMac
Individual iMac = £1, 599
iMacs needed = 5
£1, 599 x 5 = £7, 995
Cost Per Month = £7, 995
Printer
One off cost = £145.20
Printer Supplies
Cost Per Month = £70
Wacom Tablet
Individual Wacom Tablet = £118.50
Wacom Tablets needed = 2
£118.50 x 5 = £237
Cost Per Month = £237
Laminator
One off cost = £175
Insurance
One off cost = £30
Food
Cost Per Month = £600
Utilities
Cost Per Month = £150
Accountant
Annual Charge = £1, 200
20% tax on top
£1, 200 + 20% tax = £1, 440
£1, 440 / 12 months = £120
Cost Per Month = £120
Stationery
One off cost = £400
Travel
Cost Per Month = £1000
Start Up Costs
£1, 560 (rent)
£9, 166. 67 (salary)
£7, 995 (iMacs)
£145.20 (printer)
£70 (printer supplies)
£237 (tablets)
£145 (laminator)
£30 (insurance)
£600 (food)
£150 (utilities)
£120 (accountant)
£400 (stationery)
£1000 (travel)
Final Start-Up Cost = £21, 648.87
Emily was then able to work out the monthly loan, we decided as a group that we repay the loan over a three year period, as after this point would be when we would consider moving and expansion.
Loan = £21, 648.87
Interest is 7.9 %
£21, 648.87 / 3 = £7, 216.32 per year
£7, 216.32 + 7.9 % interest = £7, 786.41
£7, 786.41 x 3 = £23, 359.23 ( total cost of loan)
£23, 359.23 / 36 months = £648.86
Monthly Expenses
£1, 560 (rent)
£9, 166. 67 (salary)
£7, 995 (iMacs)
£145.20 (printer)
£70 (printer supplies)
£237 (tablets)
£145 (laminator)
£30 (insurance)
£600 (food)
£150 (utilities)
£120 (accountant)
£400 (stationery)
£1000 (travel)
£648.86 (loan)
Cost Per Month = £13, 345.53
To work out our cost per hour Emily then worked out what are expense would be for the first year and then divide that by the number of business hours in a year.
Start Up Costs = £21, 648.87
Costs per month = £13, 345.53
Start Up Costs + (costs per month x 11) = Total Year Cost
£21, 648.87 + (£13,345.53 x 11) = £168, 499.70
First Year Expense = £168, 499.70
Hourly Rate = first year expenses / hours working
£168, 499.70 / 9400 = £17.92 per hour
In order to have a margin we had previously decided to charge the client £40 per hour which we thought was a reasonable amount as we wouldn't want to put off start-up businesses with high hourly costs.
With 20% tax our cost per hour = £21.50
For every £21.50 we will make £18.50 profit
As this is the first year for our business, realistically we would not be working all workable hours, we agreed that we would mostly likely be work 60% of the workable hours with the other 40% being self promotion, or even work free.
Using this Emily then worked out what our turnover, gross and net profit would be. As we are a limited company we will have to pay 20% corporate tax
Turnover
Hourly rate x hours = Turnover
60% of 9400 = 5460
£40 x 5460 = £225, 600
Turnover = £225,600
Gross Profit
Turnover - expenses = Gross Profit
£225,600 - £168, 499.70 = £57, 150.30
Gross Profit = £57,150.30
Net Profit
Gross Profit - tax = Net Profit
£57, 150.30 - 20% = £45, 720.24
Net Profit = £45, 720.24
Profit For First Year = £45, 720.24
In our first year are business makes a decent profit.
Emily then used this information to go on to work out the potential profits our second and third years. We agreed that in the second year we would probably be working 80% of the workable hours and the third 100%.
Are overall expenses would also go down in the second year as we would not have start-up costs.
Second Year
Yearly expenses = Monthly expense x 12 Months
£1, 560 (rent)
£9, 166.67 (salary)
£70 (printer supplies)
£30 (insurance)
£600 (food)
£150 (utilities)
£120 (accountant)
£1000 (travel)
£648.86 (loan)
Costs Per Month = £13, 345.53
£13,345.53 x 12 Months = £160, 146.36
Yearly expenses = £160,146.53
Working hours - 80% of 9400 = 7, 520
Turnover
Hourly rate x hours = Turnover
£40 x 7,520 = £300, 800
Turnover = £300, 800
Gross Profit
Turnover - Expenses = Gross Profit
£300, 800 - £160, 146.53 = £140, 653.47
Gross Profit = £140, 653.47
Net Profit
Gross profit - tax = net profit
£140, 653.47 - 20% = £112, 522.78
Net Profit = £112, 522.78
Profit for Second Year = £112, 522.78
Third Year
Yearly expenses = monthly expenses x 12 months
Monthly Expenses
£1, 560 (rent)
£9, 166.67 (salary)
£70 (printer supplies)
£30 (insurance)
£600 (food)
£150 (utilities)
£120 (accountant)
£1000 (travel)
£648.86 (loan)
Cost Per Month = £13, 345.53
£13, 345.53 x 12 = £160, 146.36
Yearly Expenses = £160, 146.36
Working Hours = 9400
Turnover
Hourly Rate x hours = turnover
£40 x 9, 400 = £376, 000
Turnover = £376, 000
Gross Profit
Turnover - expenses = Gross Profit
£376, 000 - £160, 146.53 = £215, 853.47
Gross Profit = £215, 853.47
Net Profit
Gross Profit - tax = net profit
£215, 853.47 - 20% = £172, 682.78
Net Profit = £172, 682.78
Overall profit for the first three years
Tuesday, 22 April 2014
OUGD502: Personal and Professional Practice 2 - Studio Brief 3: Life's A Pitch Presentation Preparation
Following our three week break for Easter, we organised a group meeting for the first day back in order to discuss what we had research over the holidays and bring together all this information to produce a 15-minute presentation which we would then present to the group.
Once we had seen what everyone else had done, we discussed what else we would need research and gather for the presentation and then devised the running order of the presentation.
First Slide: Logo, about us and our clients and some egg puns
Second Slide: How 'eggcellant' we are and our specific job titles
Third Slide: Examples of our work
Fourth Slide: Where we nest
Fifth Slide: How our payment works
Sixth Slide: Copyright etc.
Seventh Slide: Our testimonials
Once we had decided on the running order we needed to decide upon the logo for our design agency as this would be key to the branding of the presentation and our visual identity for our design agency.
Although we all felt 'Good Egg' was appropriate in terms of our design agency specialising in the food and drink sector, none of us were particularly inspired by the name and we hit a brick wall in terms of designing the logo. Therefore we looked for alternatives, eventually we decided on 'Oeuf' which is french for egg. This name not only is still appropriate for our design field but also is more unique and it would be appropriate to have a name which is international in terms of our plans for growth.
Feeling a lot more inspired by this name we began creating a logo as a group. Emily set up illustrator on her Mac and we began looking thorough typefaces which not only represented the new name but also the beliefs of our design agency.
Once we had seen what everyone else had done, we discussed what else we would need research and gather for the presentation and then devised the running order of the presentation.
First Slide: Logo, about us and our clients and some egg puns
Second Slide: How 'eggcellant' we are and our specific job titles
Third Slide: Examples of our work
Fourth Slide: Where we nest
Fifth Slide: How our payment works
Sixth Slide: Copyright etc.
Seventh Slide: Our testimonials
Once we had decided on the running order we needed to decide upon the logo for our design agency as this would be key to the branding of the presentation and our visual identity for our design agency.
Although we all felt 'Good Egg' was appropriate in terms of our design agency specialising in the food and drink sector, none of us were particularly inspired by the name and we hit a brick wall in terms of designing the logo. Therefore we looked for alternatives, eventually we decided on 'Oeuf' which is french for egg. This name not only is still appropriate for our design field but also is more unique and it would be appropriate to have a name which is international in terms of our plans for growth.
Feeling a lot more inspired by this name we began creating a logo as a group. Emily set up illustrator on her Mac and we began looking thorough typefaces which not only represented the new name but also the beliefs of our design agency.
As a group we eventually decided on Brixton, in the lowercase which had a friendly yet professional feel to it which is something we wanted to come across.
When it came to the colour we all decided that yellow worked best and was most appropriate for the tone of the logo/identity. Therefore Emily experimented with a few different yellow hues, we decided on the first yellow as it was the most vibrant and friendly.
Although we had decided on a new name for our design agency, we still wanted to keep the egg imagery incorporated into the branding as we felt this was a unique identity for us which would ideally get us remembered, we therefore placed the name inside the egg for the logo and the character 'œ' for an icon which would be used on a smaller scale.
As a secondary colour we experimented with a cream colour which was suggested by Caitlin.
Once we had produced the final logo which would appear on each slide of our presentation we began producing the final PDF document with a particular emphasis on how we could represent all the information as visually as possible in order to keep the audience interested and enthused.
In order to keep the presentation branded throughout we decided to have the size of the slides the ratio of an six egg carton which is 1:1.4 (HxW) and designed our grid system according to the layout of and egg carton.
Emily then emailed us the final logo and the typeface we were to use so we could individually complete our tasks to put the finishing touches to the presentation.
I was asked to produce a series of testimonials from our previous clients which would feature at the end of the presentation. As throughout this process we had put a emphasis on how we are a friendly and approachable design agency I made this a particular emphasis throughout the testimonials as well as the creativity of our team.
I also produced the content for the 'Who We Are' slide, in order to represent this information visually and in a light-hearted way as a group we came up with the idea to each have our own 'top trump' card which would include basic facts about us and our design practice. We also included how we like our eggs and to keep our presentation as friendly as possible we included as many egg puns as possible.
One of the main worries we had was with the colour we had chosen for our final logo, as the yellow is quite bright we were unsure of how the would look on the projector. We therefore tested out our slides on the projector in studio 3 and found that it did not show well at all.
Therefore we tried a range of hues from the original yellow on the egg which we could compare on the projector to see which worked best.
We all agreed that the 'Caitlin' egg worked best as it was slightly darker which worked better on the projector but still conveyed the original feel of the yellow.
Final Logo:
This new hue was then applied to all the previous design work we had produced.
Once all the content for the presentation had then been amended we then got to work on the final presentation, Grace had begun this already and Charlie and Emily finished it off, creating a simple border which incorporated our logo for each slide to give a sense of continuity and professionalism.
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