BUDGET>>

This is, of course, where you should start everything to do with your Edinburgh Fringe production, but some budgeting areas relate to things covered in earlier sections of this guide, which is why we've put it here.

You should decide who in your company is going to be responsible for finances – in most companies there is normally someone who has this responsibility all year round. That person then needs to put together a simple budget right at the start. Things to think about...

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Expenditure

Personnel

You need to decide if you are going to pay the people involved in your project. This is an important consideration because if you pay your team you will be considered to be a 'professional theatre company' by royalty agents, which will affect the royalty fees they charge you for performing copyright plays.

If you are paying your team the current Equity rates for 'commercial theatre' (as of January 2007) are £300 per week for actors (rehearsal and performance weeks) and £300-£450 per week for stage managers (depending on the kind/level of stage manager). For more information call the Equity theatre department on 020 7379 6000 and ask about 'small-scale theatre' rates. Equity should also be able to advise on going rates for directors - who will need to be paid for rehearsal periods and might need a fee for performance weeks if you expect them to be available.

The Independent Theatre Council also sets rates that it advises smaller theatre companies to pay. These are currently £335 per week for actors or stage managers.

On the tech side technicians union BECTU have similar rates for your tech staff. For more information contact the BECTU theatre department on 020 7346 0900.

All this said many Fringe producers pay a set project fee to their actors and crew rather than a weekly rate – which can be negotiated with the team member or their agent on an individual basis. Other companies will pay an 'expenses honorarium' – essentially the actors and crew work for free but will get a payment to cover the costs of living in Edinburgh for three weeks. However in both cases royalty agents will count you as being a professional theatre company.

Whether people are being paid, and if so how much, should be agreed with all team members before the first rehearsal begins – if money is changing hands it is wise to make sure that each person signs a contract which states what time commitments they are making, what they are expected to deliver, how much they will get paid, and when those payments will be made. The contract should also include whether or not the theatre company will pay for a team members' travel to and accommodation in Edinburgh (normally they do) – and if it does you should state what level of travel and accommodation will be supplied. It is wise to have contracts even if you are friends with most of your team – it's amazing what friction can be created when money is involved.

Most Fringe producers will take on their team members as 'freelancers', ie they do not employ them in the true sense, and therefore will make no income tax or national insurance payments on the team members' behalf. Team members will be contracted for the project, will invoice the producer for their fee, and each individual participant is responsible for any tax or NI payments that should be made.

Once all this is agreed you will know how much you need to budget for actors and crew.

Venue Fee

After personnel, the venue fee is probably going to be the biggest expenditure for any theatre company. For amateur companies this is the big one! As explained in the venue section, you will most likely be charged a fee or guarantee payment by your venue. In the former this will be a set rental charge, in the latter this will be part of a box office split deal. Either way you will need to make a payment to your venue before you arrive in Edinburgh, and this should be included in your budget, even if its a guarantee. Of course you won't know this figure until you are made an offer by a venue in March. But for earlier budgeting purposes choose the kind of venue you are aiming for and budget on their 'rate card' fee or guarantee (if a venue doesn't publish this information just ask them). You may be able to negotiate a better rate at a later date, but best to budget on worse case scenario.

Accommodation

The other big cost – you probably need to put up your team in Edinburgh. More on this in our Accommodation section. Again you probably won't know an exact cost until you arrange a flat in the Spring, but work out the kind of flat you are looking for and then contact one of the agents listed in our flat letting section for advice on ballpark figure for renting that 'kind of' flat. Also ask about deposits – although you are likely to get this back you need to bear in mind you might have to find an extra £500 in cash flow in July to cover this.

Royalties

If you are planning on performing an established play you will need to apply for the rights to do so. Rights for plays are generally handled by one of a small number of royalty agents (Samuel French and Josef Weinberger key names in this area). You should contact them as soon as possible to find out if the rights are available and how much they will cost. This will depend on whether or not you are an amateur or professional theatre company (whether or not you pay your actors).

Travel

The main cost here is getting your team to Edinburgh. More of that in our Travel section. Don't forget to work out how you are going to get your set, props and costumers to Edinburgh. It is pretty likely to involved renting a van – look in the Yellow Pages for national van hire and get a quote (check if there are any age restrictions on drivers, and whether any of your crew are able to drive the van, if not do you need to budget for a driver?). If you are hiring a van can any of your cast or crew travel with the set saving on plane or train fares?

Fringe Fees

Although technically you do not have to register with the Fringe Society to perform at the Fringe getting a listing in the Fringe programme is very advisable, and as such few venues would let you perform without being Fringe affiliated. Fringe fees are in the region of £350 per show, with a £100 (approx) discount if you get your forms in before their early bird deadline in early April – the Fringe Society announce registration fees in early February.

Production Costs

Now you need to budget for props, set and costume. Obviously this depends on the ambitions of your director and, if you have one, your designer. Remember that most fringe performance spaces are small, and that sets have to be put up and taken down for every performance, often in the matter of minutes. Also storage space is of a premium and most sets will get quite a battering during the run. For this reason simple sets are always the best at the Edinburgh Festival! Either way – work out how much you plan to spend on wood, paint, props, costumes and make up (remember Edinburgh Fringe venues are quite strict on the health and safety front meaning any wood or fabrics in a set will need to be flame proof, this may add to the cost).

Tech Costs

Again simplicity is the key when it comes to lighting and sound design at the Fringe. That said many venues offer you a general cover and one or two 'specials' in the venue fee and will then charge you extra if you need other lights, or special items like a strobe or glitter ball. If a high number of 'specials' or 'special kit' is likely to be required then you should include money in your budget for it. Your venue may require you to hire such kit through their supplier, but for budgeting purposes you can go on the rental rate cards of any major lighting supplier (eg White Light, Northern Light or Edinburgh based Black Light). On the sound front don't forget to budget for buying any CDs (with music or sound effects) and the cost of putting sounds on to one CD or mini-disk. If you have music you need to budget for a composer, or if you are using previously released music you need to consider PRS (see below).

Marketing and Publicity

One of the most important bits of your budget – read through the Getting Noticed section of this guide and then work out what publicity you are planning to do – you should then get quotes for poster, flyer and programme printing, for publicity distribution and for any show merchandise you plan to produce. Get quotes off any media you are planning to advertise with (they should be able to give you last year's prices, then add 10%). Finally get a quote off a publicist if you intend to use one, or add about £50 to cover the cost of press mailings and photos if you intend to manage your own press campaign (press campaigns aren't so expensive these days because you can send out most press packs electronically, and rarely need to get prints made of photos).

Insurance

Your venue should have public liability insurance (so if a light falls on an audience member you're all covered). However technically you should take out insurance to cover the safety of your team members, and any damage caused to bought or rented equipment. If you are an established theatre company you may well have this covered with year round insurance, otherwise it may be worth talking to an company insurance broker for advice in this area.

Admin & Contingency

You should always include an admin budget to cover basic office, postage, phone and photocopying costs (will you be photocopying scripts, whose mobile bills will you pay, how many mail outs will you do?). And once you have calculated your overall budget you should add a contingency budget – a sum of money not assigned to anything, which is there 'just in case'. Different producers have different ways of calculating contingency, but 10% of the overall budget is good practice. Make sure this is truly for contingency – don't miss things out of your main budget thinking "oh well, there's always contingency". It's amazing how many times you can mentally spend your contingency budget in this way!

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Income

Most companies' main income is ticket sales. To estimate box office take for budgeting purposes you need to estimate four things:

Your average ticket price

The average full price ticket for a Fringe show is somewhere between £6 and £9 – bigger shows have broken the £10 barrier but to go that high will affect overall ticket sales if you don't have a big name in your show. Concessions are normally £1-2 cheaper. Some venues charge different ticket prices Mon-Thu as they do Fri-Sun (weekend prices normally about £1 more per ticket). Your venue will have an opinion on ticket prices but if you are a smaller theatre company you should be aiming for the £6-7 bracket. For budgeting purposes most people decided on an average ticket price, somewhere between their highest full price and lowest concession ticket.

The capacity of your venue

Obviously you will not know this until you have confirmed a venue, but you should have an idea on whether you are aiming for a 40 seat studio, 80 seat small theatre, 400 seat large theatre or somewhere in between. Based on the venues you're planning on targeting estimate the number of seats in the venue you are likely to perform in.

Volume of ticket sales

Now you need to estimate what percentage of available tickets will be sold. It is unwise to budget on getting over 40% capacity during a three week run (sell outs in week three need to compensate for poor turn outs in week one). Some producers prefer to budget on 30%.

Number of Performances

More on this in Dates & Times. You need to decide on how many weeks of the festival you want to run. Some venues open for up to 27 days during August, others close completely on Sundays or Mondays. For budgeting, work out how many weeks you plan to perform, and assume six performances per week. If you are aiming for one of the venues open for the full 27 days you could budget on up to 25 performances (most companies in these venues take at least one day off!)

Once you have made these four estimates you will then need to do some complicated maths multiplying average ticket price by average number of tickets sold per performance by number of performances.

Then you need to consider deductions:

- If you are working on a box office split deal you will lose 40% off any ticket sales after your agreed guarantee has been reached.

- The Fringe Office will charge a 6% commission (plus VAT) on any tickets they sell on your behalf. Your venue may also charge a commission of 2-3% on credit card sales.

- If you use non-original music in your show you will be required to pay a royalty fee to PRS, the body that collects money for songwriters. Normally they will charge you a set fee per song per performance, but thanks to a deal between the Fringe Society and PRS you will be charged a percentage of your box office instead (this normally goes in the theatre company's favour!). Your venue will look after PRS payments for you, but it will take another 2-3% off your box office.

If you are a VAT registered company then a further 17.5% will come off your takings. If you're not based in the UK you may also have to pay a Foreign Performers Tax (more on that below).

Again you will have to make some estimations here because you do not know how many tickets will be sold by the Fringe Office etc. But it is perhaps wise to deduct 5-10% of your budgeted income to cover these extra costs (over and above any VAT deductions, obviously).

The result of all this is that your budgeted income will probably be nowhere near your costs of performing in Edinburgh. Some theatre companies look to raise sponsorship money to help them cover their costs, normally using contacts of one or more of its team members. Others accept they will make a loss, either looking at it as a long term investment for the company or just as a good experience for all involved.

If you are hoping to cover all your costs, however, do make sure you're clear on just who picks up the tab if you do not get the 30% capacity you have budgeted on!

And if you are relying on box office takings to cover costs don't forget cash flow. You are unlikely to get your box office takings until the end of September, maybe later. The vast majority of your costs will need to be made up front (ie before August). Do consider how you will cover these costs in the short term, and if you can't find a cash flow facility how much payment you can put off until the end of September (hint: you won't be able to put off venue fee, fringe fees or accommodation rent).

Once all this is done you should have a budget for your show. Work out who is going to manage show expenditure, and make sure they are very familiar with the budget. Make sure everyone involved knows what expenses they can and cannot claim, and make it clear which team members have budgets to spend (so that four people don't all spend the costume budget). If individuals have a budget to spend it might be worth including responsibility for sticking to budget in their contract.

Do take time to budget well, and allow time in the schedule for managing finances throughout. More than one Fringe producer has let things get out of control during the Fringe and ended up with debts of thousands as a result.

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Foreign Entertainers Tax

If you are coming to the Edinburgh Fringe from overseas then you may need to pay a Foreign Entertainers Tax to the Inland Revenue – this tax will take the form of a percentage of your overall box office.

The Fringe Society will send all non-UK theatre companies an information pack from the Inland Revenue's Foreign Entertainers Unit around May time. You should fill in the form in this pack and return it as soon as possible. The rate of tax due to be paid is calculated on a show by show basis. If you are an amateur theatre company, or can prove your production is a promotional project from which you will make little or no profit, then the amount of tax you will be charged will be minimal or even zero.

Once your tax rate has been arranged the Inland Revenue will instruct the Fringe Society and your venue to make the relevant tax payment out of your box office receipts direct to the Inland Revenue. If you don't deal with the tax before August you will be charged the default tax rate of 22% – so make sure you have everything sorted before you arrive in Edinburgh.

As a first point of call regarding tax ask the Fringe Society for the Foreign Performers Tax information pack (as we say, any non-UK theatre companies should get this mailed to them automatically around May time). If you have any further questions contact the Foreign Entertainers Unit direct on 0121 712 8601