Research Task 8

 L4 Creative Enterprise

Unit 1: The Creative Entrepreneur

Research Tasks

Task 8: Other considerations for businesses

You may find a lot of information for some of the sections below. If so, tighten your search to focus mainly on the sector  / career you are interested in.

 

•Finance - what sources of funding exist within the creative industries?

Finance is perhaps the most significant department for a business, of any size. Within the creative industries, this is no different. By all means, a huge west end show will have the core aim to inspire a generation of audiences, a songwriter may want to capture the emotions of their fans and a photographer may want to change our perspective on the world, they all share the same mutual objective – profit. Financing productions big or small need to have controlled and sustainable finance in order to achieve this, which can be a challenge particularly for the smaller businesses who need to be recognised among the crowd.

Businesses have two options when finding a source of finance, internal and external. Internal finance relates to the cash and/or assets they have in their immediate possession. Foe example, the owner of the business may use their personal savings as a quick, reliable and measurable source. Despite the huge financial risk in business, if the entrepreneur is beyond confident in their work, they may delegate their own savings. It is important to remember that this should always be one of your top options particularly for LTD’s as they can only lose what they have invested in if the business cannot pay their debts due to limited liability. Optional internal sources include unofficial loans from family and friends, retained profits and selling any of their personal assets.

On the other hand, external sources of income are a much more popular resource as it allows for higher projections of capital. For example, loaning money from a bank can give you access to tens of thousands of pounds in order to push your business in the right direction. However, the loan has to be repaid over a certain amount of years, with added interest, meaning you will have to repay even more than what you initially withdraw. For the creative industries, crowd funding may be a great idea, particularly for a popular business in high demand. Websites such as funding circle allow stakeholders to invest into the business. This way, they can give a helping and to a local or nation show they are in demand for. In return, they may receive dividends based on the profits of the business. Other examples of external funding include business angels, credit cards and mortgages.

•Insurance - what types of insurance exist for the creative industries?

As mentioned previously, one of the most popular methods of insurance is via public liability insurance. By having this insurance, it can cover compensation payments in case a member of public including customers, employees or anyone under the supervision of the business gets hurt or damages property. For example, an audience member of a show trips over a piece of equipment and injures themselves or a worker accidently breaks a piece of equipment whilst on set, public liability insurance would cover any issues if the victim decided to sue the business. Another useful use of insurance is cyber insurance. In the event of a cyberattack, most cyber insurance policies will cover the first-party and third-party financial and reputational costs if data or electronic systems have been lost, damaged, stolen or corrupted. For the business involved, the first party, cover includes the cost of investigating a cybercrime, recovering data lost in a security breach and the restoration of computer systems. Third-party coverages include damages and settlements, and the cost of legally defending yourself against claims of a GDPR breach. Essentially any online, hardware and software damage are covered in the event of a cyber breach with this insurance.

•Working from home - what are the considerations?

Working from home has been the number one consideration for every business, particularly within the creative industries as a result of lockdown in 2020. Since all productions have been put on hold, offices closed and crowd numbers highly limited, the creative industry has been well and truly flipped upside down. As a result, working from home must be the answer. For some, particularly the job roles where they are office based, this is a gold mine to work in their own environment, with little human contact can make them work harder. With the technology available to Facetime, call and email instantly, there is no reason to not work from home since we have the tools to do so. However, for the unlucky many, the creative workers are out of work, relying on the governments furlough scheme and unable to work from home. Alternatively, there are workers who have to compromise and turn their home into their own studio, office and stage in order to improvise their work into the right track.

•Business rates - what are they?

Business rates is a term which relates to the tax a landlord has the pay if they property is used for business. For example, every shop, office, restaurant, warehouse will need to pay business rates to the government. Fortunately, business rates are flexible in correlation to the predicted value of the building. Therefore, a huge factory covering significant spaces of land will have a much higher business rate than a small shop on the high street. For businesses heavily affected via the coronavirus such as nurseries, barbers and pubs will not have to pay business rates for the whole year.

•Geography, transport and accessibility - does it matter where a company / organisation is based? Does distance matter?

On the topic of property, there is another huge consideration for the business to excel - location, location, location. Picture this; a highly developed brand with headquarters in the heat of the central London population with a big fancy building, tube and bus stops nearby and nothing but promising success around the corner. Now imagine that same brand on the sleepy coast of the East of England. For many businesses, being in the centre of a highly populated area, shoulder to shoulder with some of their biggest competitors can give them a 24/7 work hard attitude as they are able to connect, transport and be inspired by the busy nature around them. This is absolutely necessary in order for the business to keep busy, find exciting human resources and control their imports and exports. On the other hand, many businesses keep their local area in strong pride to keep the heart of their business running, remaining the true colours of the firm consistent and with a hunger to put their location on the map. Brands such as Brewdog, Kettles Crisps and Cadbury’s all take pride in their humble hometowns of Ellon, Norwich and Birmingham which creates a strong sense of local loyalty which is vital to win the hearts of local customers just as much as nationally.