Week Two: Business Models, Studios, Estimating, Invoicing and Budgeting Management

Updated: Aug 21, 2021






This weeks lecture took place in the ustwo London office in Shoreditch. Alec Dudson from Intern Magazine mentioned how the study was going to be split into four parts:

  1. An agency model

  2. Collective

  3. Freelance practice

  4. Studio operation

1: A Studio Model

About Kate Moross:

  • Art Director.

  • Illustrator.

  • Graphic Designer

About Studio Moross:

  • Kate founded Studio Moross in 2012.

  • Studio Moross is a London based multidisciplinary design company.

  • Started by buying a URL and deciding on a name.

  • Split into design and video to manage workload.

  • It makes time to work for charities, musicians, artists etc. that don't make money but are favours/social responsibility/investments.

  • 80% of clients are repeat clients.



Image: https://flex.falmouth.ac.uk/courses/897/pages/week-2-lecture-the-business-of-design?module_item_id=50644



Image: https://flex.falmouth.ac.uk/courses/897/pages/week-2-lecture-the-business-of-design?module_item_id=50644



Image: https://flex.falmouth.ac.uk/courses/897/pages/week-2-lecture-the-business-of-design?module_item_id=50644


Goals


Image: https://flex.falmouth.ac.uk/courses/897/pages/week-2-lecture-the-business-of-design?module_item_id=50644



2. An Agency Model


About Neef Rehman

  • Graphic Designer.gner and software developer.


About ustwo:


Mission: We want to launch products, services and companies that make a meaningful impact on the world through:

  • Working with clients.

  • Launching own ventures.

  • Investing in companies we think are doing impactful creative work.

Three main facets of ustwo:

  1. Studio: work for clients.

  2. Games: create and sell games that are developed in house.

  3. Adventure: investment fund.

I found the revenue model (below) from ustwo really interesting as it showed how different areas of the business generated revenue and how they supported each other. This is also important for when the market changes or any other unforeseen changes happen that affect a revenue stream, they can focus more on another revenue stream that isn't affected or is doing better.

Image: https://flex.falmouth.ac.uk/courses/897/pages/week-2-lecture-the-business-of-design?module_item_id=50644



3. A Collective Model


About Lisa Armstrong:

  • Creative Producer at Lovers.

  • Responsible for the successful running of a project.


About Lovers:

  • Creative super group that helps brands.

  • Only work on projects they love (hence the name).

  • Began to create a collective of designers that wanted to work on projects they're passionate about.

I found the project management tools (below) helpful from Lovers as in a collective of freelancers; it's vital to share up to date information on how projects are running not just with freelancers but with clients too. Sharing this information with clients makes it easier to ask for more money/time as you can back up your reasons.



Image: https://flex.falmouth.ac.uk/courses/897/pages/week-2-lecture-the-business-of-design?module_item_id=50644



4. A Freelance Model


About Theo Inglis:

  • Freelance design writer.

  • Graphic designer focusing on book and publications.


  1. In House

  • Day rate

  • Agent

  • Big studios

  • Design focused

2. Independant

  • Studio of one

  • Own clients

  • Fee per project

  • Freedom

3. Independant Designer

  • Design

  • Finding business

  • Studio Manager

  • Production

  • Marketing

  • Finance

I found Theo's lessons helpful from his presentation as they're kind of relevant to any new designer starting. For example, Theo mentioned how he entered a competition to design a magazine cover that he wasn't overly invested in. The brief had many restrictions, and he didn't win the competition; however, it did lead to work that he was a lot more passionate about.

Image: https://flex.falmouth.ac.uk/courses/897/pages/week-2-lecture-the-business-of-design?module_item_id=50644



Panel Discussion




Are there any challenges or limitations to your models? Are there any things that they stop you from doing?

Neef Rehman

ustwo

  • Working with bigger companies means it can be a long process for design work to be approved.

Kate Moross

Moross Studio

  • Working with people you want to work with can have its disadvantages as your potentially turning down bigger clients with more money.

  • Running a business can lead to having too much responsibility.

Lisa Armstrong

Lovers

  • Having a big pool of talent adds paperwork and project management.

Theo Inglis

Freelancer

  • The work is unpredictable.


How do you manage multiple projects?

T.I

  • Asking for more time (if possible) depending on the client.

K.M

  • Many clients set you up with a fake deadline which is important to remember as this can give you confidence when/if you decide to ask for more time.

Which custom build tools are the most key?

L.A

  • Scoro lets you plan your resources day-by-day and allows clients to see how the resources are being used.

N.R

  • Resourcing managers.

  • We rarely have one person working on multiple projects.

K.M

  • I like working on multiple projects at the same time.

  • People have different ways of working, and it's important to remember that.

  • Most people manage their own time.

How do you maintain a healthy environment?

K.M

  • We have a life coach. that mental and financial well-being are separate.

  • Being open to talk

  • Being open to talk.be aware of it.

T.I

  • Flexibility helps, although it can be lonely.

L.A

  • We have a life coach

  • We eat together.

  • Making sure people leave on time.

N.R

  • Coaches.

  • Fitness programs.

  • Work-life balance.

  • Flexibility.

Are any of you seeing changes in the work you're being asked to do? Can you chart it, or is it down to external forces?

T.I

  • Once you do one thing, you get more of the same.

  • We find a lot of clients are investing in strong in house teams.

L.A

  • We find a lot of clients are investing in strong in house teams

N.R

  • We always have to adapt.

K.M

  • Started in graphics and visual design, then moved onto motion and music videos as trends changed with websites such as YouTube became popular.

  • It's good to be new in a saturated market


Advice for a starting business...

N.R

  • Identify your niche.

L.A

  • Instil trust.

  • Build relationships.

T.I

  • Have a long term personal project.


The process of setting fees in AIGA professional practices in graphic design



Image: https://www.amazon.com/AIGA-Professional-Practices-Graphic-Design/dp/1581155093


There are three fundamental conditions to consider during the process of setting fees, they are:

  1. The cost of staying in business (overhead).

  2. The best estimate of the nature and complexity of the proposed project (variable costs).

  3. Knowing the intrinsic value of the final products (market conditions).

Overhead

  • Know what resources you are using and costs.

  • Keep a record of ingoings and outgoings.

  • Have an accountant.

  • Map out the ongoing expenses of the business, such as rent, utilities, etc. And nonbillable time, such as admin.

  • A healthy business should generate about 20% profit.

  • The costs (above) will determine your hourly rate, so they should be calculated annually.

Hourly Rate

  • You should be able to bill out 50% to 80% of your time. If you can't, see if there are ways you can be more efficient with your time in other areas.

  • Track the number of hours you work on projects.

  • Tracking hours can help a studio estimate how long similar future projects will take.

Materials

  • Supplies that are routinely part of studio activities are overheads.

  • Supplies that are for a particular project need to be accounted for and evidenced.

  • Copy/scan receipts.

Service

  • All outside services need to be documented.

Project Estimating

  • The difference between a good estimate and a bad estimate is the difference between profit and loss.

  • The key to an accurate estimate is understanding the project specifications and production process.

  • Get familiar with the project.

  • Research.

  • Break the project down into phases.

  • Know how long it takes to do specific tasks.

  • Will the project require outside services?

Out of Pocket Expenses

  • Estimate all out of pocket expenses that can be reimbursed.

  • Outside services fall into this category.

Changes and Additions

  • Changes and additions should be considered separate from the project agreement.

  • Document changes and additions and have the client sign them off.

Market Conditions

  • Inherent worth: how much is someone willing to pay for something.

Usage Rights

  • Always consider future uses of your work.

  • Reserve the right to your artwork.

  • Limit usage rights.

  • A complete buyout requires a higher fee.

Negotiations

  • Ask the client how much they have budgeted for a project.

  • Negotiation is a key activity, don't be afraid of it.

  • Both parties should get a fair outcome.


Workshop Challenge


"At C.Studio, we specialise in creating promotional materials for comedians and sketch acts. By working closely with the performer/performers and their producer, we visualise their voice, persona, and on-stage presence through a wide range of print media, both analogue and digital, to capture their essence tailored to their specific style. Throughout the year, we travel between comedy festivals such as The Edinburgh Fringe Festival, The Melbourne International Comedy Festival, and Just For Laughs Festival so we can oversee the distribution of material, support our clients, and have a laugh!


Like many of our clients, we are eco-conscious and use eco-friendly, locally produced, recycled materials whenever possible. As well as this, we work remotely, which reduces our carbon footprint further and allows us to focus more of our time and finances on our projects."


I decided last week that my design studio would specifically focus on creating posters for comedians/sketch acts. So with this in mind, for this weeks challenge, I decided to look at the potential brief of creating a poster and flyer for a comedian for the 2022 Edinburgh Fringe Festival. I've highlighted in my ethos that I'd be working remotely and not in an office, meaning we'd be able to keep overheads down as we wouldn't be paying rent for an office and other utilities that come with that.

I was unsure what to charge for a project like this, so I decided to research what other graphic designers have/would charge for a similar project.



Image: https://www.webdesignerforum.co.uk/topic/36794-how-much-to-charge-for-poster-design/



Image: https://www.webdesignerforum.co.uk/topic/36794-how-much-to-charge-for-poster-design/


It seems as though most people charge an hourly rate for poster/flyer work, which appears to be fair as it's a small project that I couldn't charge at a day rate or anything higher. However, there are still factors I need to keep in mind when setting an hourly rate, such as:

  • Popularity; are they niche or mainstream?

  • What size audiences do they pull in?

  • My services specific to promotional materials for comedians/sketch acts, so don't put prices too low.


I decided to set an hourly rate of 85.00GBP for this project that would take 10hrs over three weeks, totalling 850.00GBP. I feel this cost would reflect our skills and services and the comedian's (Tony Law) projected revenue from the Edinburgh Fringe Festival. I also feel the three weeks to complete the project takes into account time to cool off (after drafting) and other workloads we would also potentially be dealing with at the same time. This is how the project would break down:

Week One: discover/design/draft

This is where we would discuss initial ideas, begin designing, and create the first draft.

Week Two: develop/draft

This is where we'd develop ideas further, taking into account the feedback from the first draft and producing a second and third draft (if necessary).

Week Three: deliver

Finally, we'd finish the final draft, send it to the printers (under our supervision), and it would be delivered.


Invoice #628


Invoice #628
.pdf
Download PDF • 80KB

Invoice #629

Invoice #629
.pdf
Download PDF • 115KB

Terms & Conditions


The following terms and conditions apply to all services provided by C.Studio. Any work carried out by C.Studio is done so in the complete understanding that the client has read and accepted the following terms and conditions.

C.Studio retains copyright on all working, including illustrations, photography, typography, ideas, visuals, unless additional agreements have been and costs have been settled with the appropriate paperwork signed by the relevant parties.

Payments

  1. At the time of proposal, an estimated cost will be sent to the client in which the client has two weeks to respond by signing in the appropriate space provided on the proposal letter and returning it to us.

  2. Once the client has agreed to the said proposal and the estimated cost, the client then has a further week to make a 50% cost payment. Failure to do this will result in a delayed project start date initially outlined in the proposal letter. This initial payment is non-refundable.

  3. The remaining 50% payment will be due on the project completion.

  4. The client will be provided with an approval form and invoice within 7 days prior to project completion.

  5. If payment isn't made within 14 days of receiving the invoice, late fees will be issued unless additional agreements have been arranged before the 14-day deadline.

  6. Work created by C.Studio will not be released until all outstanding payments have been cleared.

Copyright and Trademarks

  1. Any artwork supplied by C.Studio remains the property of C.Studio unless any additional agreements have been made in writing and costs concurred.

  2. The client may request additional usage of said artworks (of which C.Studio holds the copyright) through writing. C.Studio has the right to approve or decline the request; however, further payments may be issued if approved.

  3. By supplying C.Studio with images, text, artwork or any other media, the client allows C.Studio the right to use it as freely as they wish.

Cancellation

  1. If the client decides to cancel a project once the project has started, a further 25% additional cost will be issued as a cancellation fee.

Rights for Refusal

  1. C.Studio holds the right to refuse any work that doesn't align with its ethos. Projects that suggest racism, homophobia, sexism or any other negative discriminatory act that can be deemed offensive will be refused.

Reflection


It has been fascinating hearing about how different designers work and how pricing is delivered to clients. I was slightly nervous heading into this week as I've not worked in graphic design before and therefore have no idea how to price myself. I learnt that there are different ways of pricing your work, such as hourly or day rates and even one payment for a complete project. Of course, charging an upfront payment for one whole project require knowledge of the time, materials and other factors that need to be worked into the cost. For the challenge, I decided to stick with an hourly rate as I felt comfortable (in regards to my experience) in doing this. I created two invoices for two different sized projects, one big and one small. After speaking in a tutorial with Paul, it was clear that the main emphasis of the cost to the client and the reason for why they should decide to work with you comes down to the 'Discover' stage. At this stage, the ideas come together, and your unique ideas are your main selling point, hence why most of the hours I'd spend on a project would be at this stage.

I feel that I've learnt a lot from this week. Costing isn't something that is always considered; however, it's so important. You have to consider many questions when pricing your work, and all those questions are entirely valid and navigate you in the right direction. Those questions weren't so clear previously, though.


References


flex.falmouth.ac.uk. (n.d.). Log in to canvas. [online] Available at: https://flex.falmouth.ac.uk/courses/897/pages/week-2-lecture-the-business-of-design?module_item_id=50644 [Accessed 13 Jun. 2021].


Crawford, T. and American Institute Of Graphic Arts (2008). AIGA professional practices in graphic design. New York: Allworth Press [Accessed 13 Jun. 2021].

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