DBA scheme helping small design groups to think big

Ten UK design groups have been selected to receive free advice and training from the Design Business Association.

The chosen consultancies are the first beneficiaries of Small/ Medium/ Large, the initiative for small and micro-sized businesses set up by the DBA, together with the National Endowment for Science, Technology and the Arts and creative industries investment group Pembridge Partners LLP (DW 2 December 2004).

The £50 000 fund will be distributed across the ten consultancies over the next six months, providing tailored business advice and training.

This is a pilot wave for the scheme, but the DBA hopes that public funding agencies recognising design’s contribution to the economy will provide backing to extend the initiative. According to DBA chief executive Deborah Dawton, it has already secured funding for a second year, allowing for fine-tuning of the scheme ahead of an anticipated expansion.

‘I really hope there is a scalable version of this. I would like to see a legacy, say, five years down the line, of consultancies that have been catapulted into the next stage of their development by the scheme,’ says Dawton.

For Nesta, the collaboration is an extension of its aim to develop models for growth and investment in the creative industries. ‘We hope these ten consultancies can become role models and help build an understanding of how micros and small design businesses can grow,’ says Nesta business support manager Mark Fenwick.

Dawton stresses that Small/ Medium/ Large will not attempt to provide a ‘one-size-fits-all’ solution to small design groups’ business issues, but rather a tailored service that maps out the difficulties that each consultancy faces. The knowledge attained from this process will be fed back into the industry.

The scheme is backed up by the DBA’s workshops. There will be a human resources event in London in June and a series of financial management workshops across the country later in the year. ‘We are identifying issues and then scheduling activities that address these issues,’ says Dawton.

To select the initial ten groups for Small/ Medium/ Large, Pembridge Partners interviewed 25 applicants, discounting those that had yet to put in place some of the business ‘basics’. From this small sample it found 60 per cent of directors had no business training and a quarter did not use management accounts to run their companies.

More positively, three-quarters had built commercial goals into their ambitions, allowing clear financial targets to be set. This contrasts with the film and television sector, for which Pembridge has initiated a similar scheme. In this industry the majority of companies were reluctant to define goals in financial terms and virtually none had a business plan.

The UK design industry is comprised of a large number of small consultancies. The DBA says the growth of start-up groups typically continues to a point and then halts: consultancies with more than 40 employees remain exceptional.

The association offers a number of explanations for this lack of continued growth, the majority of which relate to the skills, knowledge and motivations of the consultancies themselves. There may be a lack of confidence to grow – many people prefer to stay ‘safe’ with a small group, it says in a statement.

Another possible curtailment to expansion is a lack of business understanding: unlike other creative industries, such as advertising, design has a paucity of role model companies that have made the transition from small to large. But these are issues that arise for most small to medium-sized enterprises, says Dawton.

Ten consultancies awarded the £50 000 pilot

• 442 Design, Edinburgh

• Alloy Design, Farnham

• Black I, Tunbridge Wells

• Elfen, Cardiff

• Mode, London

• Northbank Design, Bath

• Reach, Bristol

• Rodd Industrial Design, Hampshire • Seachange Creative Partners, London

• Vivado Limited, Chelmsford