Business Growth - Does Size Matter ?

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Permalink Reply by Ellen O'Hara on May 15, 2009 at 4:01pm

At Cockpit we have designed a set of performance measurements which we feel are appropriate for our clients - largely sole trading craft based businesses - but even these need to adapted on a case by case basis. And it terms of scale and scope,its a case of getting a balance between the profitability, productivity and optimum size of a business, with the personal and creative rewards sought by the business owner. An often challenging but very satisfying process!

We will be analysing this years KPIs over the next few weeks and are looking forward to seeing how things have shifted over the last year. Extracts from last years research are available on the a-n website at
http://www.a-n.co.uk/knowledge_bank/article/489421

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Permalink Reply by Peter Drought on August 27, 2009 at 10:32pm

I guess the most important thing about business growth is that it should be managed effectively and planned for. Before a career change, the first business I worked for was a small accounts practice (I used to be an accountant before deciding to start up my own photography business - as different as chalk and cheese I know, but then look at Xander Casey aswell).

This place had started as a low budget sole practitioner often specialising in low price work. It was a really stressful place to work in because the margins were so low, prices being based on one individual doing a set of accounts. When the place took on addittional staff (like me) its pricing structure wasn't sufficient to cover the addittional overheads. This put strain on everyone trying to do jobs that were never going to make a profit because the original budgets for these jobs were not set up to cover the addittional staff costs.

I guess the point I'm making is that if you intend to grow, make sure that your pricing and margins are set up to do this from the start, as your clients/customers won't take kindly to you increasing your prices later on if you decide to take on further staff or other costs such as training or office space.

The point

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Permalink Reply by Sarah Elderkin on August 28, 2009 at 12:33pm

I think that at the heart of what most creative want to achieve is excellent creative success - sometime you do need to be a big practice to achieve this but I would argue in most cases it isn't necessary. See Matt Pyke's D&AD President's Lecture that took place at the Liverpool Design Symposium last year. Based in a (very nice) garden shed in Sheffield, with mobile and laptop, he works with amazing collaborators internationally and is at the cutting edge of digital design practice with commissions from international brands.
(Visit - http://www.dandad.org/membership/lectures.asp)

Creative Industries lead the way in defining new business models and in many cases - smaller, energetic creative companies with a pool of collaborators and freelancers can be more fleet of foot. This means they can be more sustainable during an economic downturn and better able to respond to commissions that require them to adapt their talent base.

This model isn't right for everyone but I am frustrated by government prioritisation of large companies, or those with large growth potential and aspirations. If the UK creative sector is to retain its international position, we must support innovation and ideas and successful enterprises that are happy to stay small as well as larger businesses. An entrepreneur's interest in staying small doesn't mean they are necessarily a 'life-style' business - i.e. not to be taken seriously. More than likely it will have been an important business and practical decision.

Also checkout NESTA's research commissioned from Manchester Business School to look at 'Hidden Innovation in the Creative Industries' - http://www.nesta.org.uk/hidden-innovation-in-the-creative-industries/
where the study looks to explore a wide range of forms of innovation - in their services, products, business models and practices.

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Permalink Reply by David Parrish on September 1, 2009 at 6:25am

Thanks Sarah !

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