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How to set up a theatre company

Lost Watch’s Flew the Coop at the New Diorama Theatre. Photo: the Other Richard
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Creating your own work is a proven way of breaking into this competitive industry. Young theatremakers and a leading arts consultant tell Susan Elkin about the logistics of producing theatre under your own steam…

The buzz phrases in training these days are “be entrepreneurial”, “create your own work” and “set up a company”. All this sounds easy, but what about the practicalities?

“The issues you have to deal with include finding rehearsal space, marketing, finances and getting advice,” says Rianna Dearden, whose company Lost Watch is touring Flew the Coop, its fourth show. Dearden and her two colleagues graduated from East 15’s BA in acting and contemporary theatre course in 2013.

“The setting up of Lost Watch just happened,” she says, adding proudly that the company is now able to pay all the actors it works with.

Dearden continues: “We knew we wanted to work together and we took Play for September to the Edinburgh Fringe, at which point we had to think of a name. We kept going and continued to make work together. It was only much later that all the business stuff came and brought with it all those challenges we never thought we would need to tackle.”

Jo Salkilld is an arts consultant who advises many companies. She is also in charge of finance and fundraising at the New Diorama Theatre, which won The Stage Awards fringe theatre of the year 2017 and supports emerging companies. It has 13 organisations on the programme this year. What sort of company should young performers set up?

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“It depends on what you want from the company and how they see their future developing,” Salkilld explains. “If you intend to be not-for-profit, which doesn’t preclude the artists from being paid reasonably, then the charitable incorporated organisation model may be best. It’s fairly new and offers the status of a charity with the protection of a limited liability company. You have to report to the Charities Commission, but not Companies House.”

CIO status means that you can apply to a wider range of funders, some of which will only fund registered charities. You can also apply for exemption from corporation tax and claim gift aid on private donations.

“All of that is attractive to a group of young people with very few resources,” Salkilld says.

Dearden knows about limited resources. “It’s taken a long time to make Lost Watch financially viable,” she says, “but we found ways to make paying people who work for us a priority. For years we took our sets from skips.”

Salkilld advises that groups of young people working together as a company share the business responsibilities. The larger the group, the better this works.

How do you set up a successful touring company?

Ross White, 21, who graduates from Guildford School of Acting this summer, began to create work with fellow students in their first term. This summer – their third together – Split Second Productions is taking a three-week repertory season (A Midsummer Night’s Dream and Much Ado About Nothing) to Berkeley Castle in Gloucestershire with a cast of 13. “We do everything ourselves, sharing out the business roles,” he says, adding that this summer everyone will be paid fully for the first time as they embark on their professional careers.

Salkilld offers sage advice on business models: “A company that becomes a CIO has to recruit and report to a board of trustees, produce regular financial and administrative reports and ensure that bookkeeping is to a standard and, once they are over a certain size, get their accounts certified. All that comes at a cost and may deter some people.”

So what are the alternatives? If you don’t fulfil the rigorous requirements for a charity, then you can set up as a company limited by guarantee. “It offers limited-liability protection and the not-for-profit status will still open some doors,” says Salkilld.

If you hope, one day, to make and take some profits then a company limited by shares allows you to retain full control and do that. A solo artist might find it simpler to operate as a sole trader, Salkilld says: “A registered company is a lot of work and most artists would have to employ somebody extra just to do that.”

Lost Watch, which has recently become a CIO, benefited from the New Diorama’s emerging company/graduate programme in 2015. “The practical stuff is amazing but the real benefit comes from moral support and mentoring,” says Dearden. “They take the strain off the boring bits, such as accounts, by making it seem achievable.”

David Byrne, the New Diorama’s artistic director, chuckles: “I’ve lost count of the number of times I’ve explained how a cashflow works this year.”

Jo Salkilld’s advice for company starters

• Always build a sizeable contingency into any budget – between 5% and 10%.

• Keep at least one piece of paper for every financial transaction. Always get a receipt.

• Once your turnover exceeds £15,000, ditch the spreadsheet and get a bookkeeping package.

• You have to produce certified accounts once your turnover exceeds £25,000. If you can find a friendly accountant who will put up with your rookie mistakes and explain how to correct them, you have won the lottery. Otherwise, employ a bookkeeper.

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