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Trellis News
The newsletter for Garden Designers

Welcome to this edition of Trellis News, the ezine that aims to help you expand your community and your business.

This edition focuses on holding on to your hard earned money!

If you have found this interesting, it would be great if you could forward it on to colleagues, and ask them to subscribe by sending a blank email to .

Letters Page -
Your opportunity to have your say, to ask questions, look for resources.
The first letter is from a garden designer who wishes their name withheld, and would appreciate your advice and comments:

"I have just started designing gardens, and my first client is refusing to pay. I don't have anything in writing apart from a letter to the client explaining my charges. The client has 'tricked me' into sending him 2 copies of the interim designs electronically 'just to have a look' and how he is not paying for them."

The debate about charging for work goes on....

Adam Bailey wrote:
"In response to the view that "it would be commercially unwise and professionally unethical for designers to set fixed fees acording to size of garden.", we've been setting fixed costs almost since we started. Indeed, we used to do an hourly fee basis but when we asked our clients for feedback, they virtually all said they wanted to know costs up front. The only way of doing this is by the size of the garden. Bigger garden, more design time therefore higher charge. Commercially unwise? Hardly! In about 2 months we'll be moving to bigger premises, taking on more design staff and expanding due to the high demand we're receiving. This can only be based on the quality and service we've offered our customers over the past 5 years.

As for the comments about charging 10% of project cost, I'm glad he's not designing my garden! For an average £30,000 project, that's £3000. In comparison we'd charge in the region of £1500 - £1900 including survey, all design work and project management site visits."

Adam also had views on the Prospective Client detailed in the last edition of Trellis News -
"The main focus of the letters is what to charge, based on what a designer is worth etc. etc. Why is it then that the 'Prospective Client' needs a garden designed, constructed and planted for £1000??!! Even a student, working for free on all areas of the project would spend more than that on materials alone! With site clearance (skips etc.), plants, hard landscaping materials, compost and the other multitude of gubbins that are required to build a garden, even a FREE designer, working for nothing would lose money!"

My reply, as a coach who likes to ask provocative questions, was:
"It's an interesting point you make about the £1000 project - a vast section of the public who would previously never visit Chelsea or dream of having their gardens designed, have watched all the TV makeover programmes and think they want something like that and know they don't have the expertise to design it themselves. They know that the costs shown on the TV don't include the designer's costs in terms of design and labour charge for the construction, but they expect that for a few thousand pounds, they can buy themselves a garden makeover. Maybe they are being totally unrealistic, as they will find out when they approach designers - and maybe there are horses for courses - just as in the computer industry, there are the large companies who sell to other large companies at top level prices, then there are the medium level companies who sell at lower rates to other medium level companies, right down to the one man band who looks after local businesses pcs, or even the pc in your living room, charging £25 per hour. The computer industry is large enough to accomodate all of them. Does garden design have to be an elite service for the few or is there a way of satisfying the new market that has emerged of the average joe?"

Adam replied:
"I agree also that GD doesn't have to be an elite service. We have clients who spend £100 on plants and nothing else. They're just as valued as the higher spending clients since our reputation is crucial for both clients, regardless of what they spend. What people can afford isn't the subject, it's what the designer can offer for their money that matters. I've learnt the hard way over the years by trying to offer quality for peanuts. It can't be done. I've built railway sleeper terraces in rain and snow for pocket money, hoping to build my reputation. I've lost money in all number of ways trying to create something wonderful for next to nothing. Indeed, there are companies that charge £300 per sq. metre for decking. We hardly ever use them. Neither do we use companies who charge £1600 for simple timber archways (yes, they do exist!) We aim to keep costs down wherever possible, so the client gets the most from their money without sacrificing the quality too much. But, the £1000 budget for that design brief I'm afraid just doesn't work. I've tried it! I've been there. One other point before I bring my whinge to an end;-) Do we, as an industry, want to raise standards, or are we happy to lower them for the sake of the public's lack of awareness to what things cost? There are companies out there cheaper than mine, loads of them. But they've also got a lot of unhappy customers who were told they could have gold by paying in brass. Many of whom come to us in the end.... thanks and sorry this is so long but this is my livelyhood and something I'm quite passionate about."

What do you think about any of the above?
Or is there something else you'ld like to say to your profession?

Please email me at for publication in the next edition of Trellis News.

The Leaky-Hose Syndrome: Your Guide to Mismanaging Your Finances
by Annie Meachem

I'm sure you and I put a great deal of time and effort into running our businesses and in maintaining and improving our professional standards - and one of the rewards I know I expect from my work, and I imagine you do too, is to make a reasonable profit.

Having worked hard to earn our profits, it's worth checking that we haven't got a leaky-hose syndrome - just as water seeps out of the hose without much outward sign, so can our profits seep away without us noticing.

Here's a check list of 27 possible profit leakage points that could apply to many types of businesses - how many apply to you? It would be great if you could email in any more that you think of to include in the next edition, especially ones specific to your industry! Or what did you decide to do as a result of reading this?

1. Being so busy that you get behind on paying your bills and end up paying additional interest charges
2. Trying to maintain a company image that is too expensive
3. Selling what you want to supply, rather than what the client wants to buy
4. Not getting paid by clients quickly enough
5. Not getting paid at all for work that you've done
6. Keeping on unproductive staff for whatever reason you excuse it with
7. Spending your valuable time on admin tasks that can be delegated to someone on a much lower hourly charge-out rate than yours
8. Excessive fringe benefits
9. Poor staff morale & high staff turnover
10. Spending money on the wrong advertising, the wrong message and the wrong medium
11. High stocks, due to poor tracking systems and lack of purchasing controls
12. Excessive travel costs - can you use tele/video conferencing instead?
13. Not shopping around for the best deals on insurance, supplies, goods etc
14. Accounting errors that mean you pay out too much, collect in too little
15. Not investing in professional services that can help your business, like a good accountant, business coach etc
16. Borrowing from the business to finance your personal life
17. Poor or absent business plan
18. Too many staff
19. Spending longer on a job than you've costed for to get it perfect
20. Outmoded technology - computers, phones etc
21. Poor communication - you're receiving this by email, but many lag behind in this area
22. Overpayments
23. Having too much debt
24. Waiting too long to bring new items to market
25. Inadequate management information systems
26. Not negotiating discounts on supplies
27. Having to revisit a site because you missed some dimensions

How many did you think - "I've been meaning to do something about that", or " I don't know how to go about that", or "I'll do something about that when I'm not so busy?"

Which of these is the biggest hole in your "profit" leaky-hose?

What's the cost of not sorting this out?

What action do you need to decide to take to plug this hole?

When will you do that?

What support do you need to make these changes?

What shifts in your thinking would this require?

What will be the benefits to you of taking these steps?

Contact me by email, or ring me on 01243 545010 for an informal chat or to arrange a complementary telephone coaching call to find out how business coaching supports entrepreneurs and professionals like you to grow succesful businesses.

To Become a Limited Company or not?
by Nikki Merridue

The Chancellor has given incorporated business (Limited Companies) £10,000 of tax-free profits in the budget this year to take effect for profits made after 1st April 2002. He also reduced the small rate for company profits up to £300,000 down from 20% to 19% as from the same date. On initial review this would appear considerably better than £4,615 tax free and then £1,920 at 10% and the following £27,980 at 22% that you would receive as an individual working either as a Soletrader or in partnership. This could have a potential tax saving of over £3,500.

A Limited Company is a legal entity in it's own right and has it's own tax office and reference completely separate from you as an individual. A company must have two officers i.e. one director and one secretary and also a registered office and a unique name.

The company must also file the annual trading account at Companies House within 10 months of the year end. There are different disclosure requirements depending on the size of the company.

Director or Proprietor? As a Director you will be considered an employee - you will have tax deducted at source on your remuneration rather than the half-yearly tax bills than you pay as a proprietor of a business. The main benefit, other than the potential tax saving, will be the Limited liability status. This means that your private residence and investments are not used to settle business debts should the worst happen and the business fail. Only if a director is proved to have traded fraudulently will a liquidator make a claim against personal assets.

You would also need to consider the following points:-
1. Cars and benefits - As a soletrader you may have a vehicle, which you use and can claim for repairs, insurance and general running costs as well as some loan interest. If the company owns the car you would incur a potentially large Benefit in kind as these are based on the cars CO2 omissions as well as a large fuel Benefit if you wish to claim the same expenses. (Editor's note - I'm a Director and own my own car, and the company pays me for the mileage I do on their business at 40p per mile.)

2. Pension contributions - From this year you can make contributions into a pension scheme without the necessary earnings. There is the advantage that the company can also make contributions into your pension scheme which will be tax deductible for the company.

3. Additional Costs - The accounts for a limited company are more complex than soletrader accounts, so cost more to prepare. As an employer you will need a PAYE scheme and need to prepare annual returns and returns of benefits in kind.

4. Public accountability - Much more data about your business will be on public record as a company than as a Soletrader or Partnership.

5. Setting up a new company - There is the cost of purchasing a limited company off the shelf or getting a broker to set one up for you of approximately £250. You will also have to set up company bank accounts and you will need new stationery which complies with certain regulatory requirements.

6. VAT - The company being a legal entity in it's own right has it's own registration threshold of £55,000.

These are just some of the issues and considerations that need to be reviewed in planning a change in your trading status. The list is not exhaustive but hopefully has given you some food for thought and some ideas for discussion with your financial advisor.

Nikki Merridue is a Director of Matthews Hanton Ltd, Chartered Certified Accountants. She would be happy to advise you on financial issues - contact her on 01243 861521 or by email, matthewshanton@btconnect.com

End piece

Hope that you've enjoyed this edition and that something in it has got you thinking!

Best Wishes

Annie Meachem

Trellis Coaching
+44 (0) 1243 545010
email

"Supporting Personal & Business Growth"

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Copyright © Annie Meachem 2003/4. Copyright in this document is owned by Annie Meachem. All rights are reserved. This document may not be copied or distributed without the prior written consent of the Copyright owner.