Business Structures

It is important to understand how small businesses operate especially if you plan to work as a freelance designer or setting up a small creative practice. There are a great deal of responsibilities and legal requirements and ignorance is not a defence is you get something wrong.

Areas covered:

Small Business Models
Creative Professional Bodies
Tax Liabilities
Legals

Personal Business Plan

Below is a business plan for my own freelance graphic design work:

An exercise in understanding small businesses is to create my own business plan for my work as a sole trader.

There are a few additional things I want to discuss that aren't covered in the plan:

Awareness of financial growth, currently in the UK the VAT threshold is £90K turnover, and this is not done on an accounting period but over an 12 month period so if you are close to the amount you need be doing a monthly check the previous 12 months, you only have 30 days to register so it is very import to know this as you could be landed with a hefty bill.
I have no intention of providing my services outside of the UK but if i were to do so then I am subject to the reverse charge mechanism - in affect if I am selling my service in France then I would be subject to French rules.
While payment terms are usually 30 days from invoice issue date, lengthy projects may require payment plan based on key deliverable points.
PAT testing – I will conduct my own PAT testing on my equipment as in line with UK law.
I am aware that with regards to financial record keeping I need to keep all records for a 7 year period (including invoices). I must prepare & filing sole trader accounts, manage cashflows and meeting statutory deadlines.
When working in design there is always the consideration of intellectual property, it is import to credit and license other peoples work and be aware of copyright infringements.
Insurances to consider: Public liability – Covers me against 3rd party injuries to my customers - this would be relevant if a client was meeting me on my own property. Equipment insurances – Covers my kit for loss or damage, my laptop is currently covered by my home insurance. Indemnity insurance – covers me for professional failure, eg failing to attend an event, damaging clients goods, etc.
Creative professional bodies that would be relevant to my field include D&AD and ISTD, both highly revered organisations that offer annual competitions which would help raise my profile if I were to enter and receive acknowledgement for my contribution. They also offer membership which would also help raise profile by affiliation.