Small-scale networks mean designers can avoid the risks of ‘boom and bust’ for the consultancy business model, as Stuart Spooner has discovered
Over the past 20 years the design industry, like many sectors, has constantly evolved. I’ll never forget the impact our first Apple computer made when it was introduced into my studio back in the early 1990s. Long-held views and established ways of working were thrown out of the window almost overnight. Change, as they say, is the only constant.
Having worked in the industry throughout this period, I now believe the ‘traditional’ design consultancy model is ready for review. By traditional, I mean where two or more entrepreneurs create a formal partnership and develop their business along a well-trodden business path – prospecting for work and employing staff to meet the demand. As the company develops, it continues to recruit to meet increased demand, continuing the predictable cycle unchecked. More work needs more resources, needs more money, which needs more work, and so on.
All this would be fine if you could guarantee that the main profitable client relationships you have today will all be there tomorrow. Sadly, this is not always possible. In a downturn, this leaves the consultancy with high fixed costs and no way to pay them.
Replacing major customers overnight because they moved in-house, were seduced by another consultancy or followed an account director out the door is never easy. I know this from personal experience when my established design consultancy, which employed 12 people, failed in 2002, leaving me with nothing more than a few loyal customer relationships.
Now, four years later, I’m back in business with a renewed enthusiasm. This time, however, I’m working very differently. Instead of building up large internal resources to meet demand, I collaborate with other small businesses to complete projects, as I need to. Collaboration to me is much more than outsourcing to freelances or developing a ‘virtual’ business. It’s about creating a business – or even several – within a business.
The simple benefits are that you share the risk as well as the revenue. It can dramatically transform your service offer and it can radically change the first impression you can make with larger customers. And, because those who you collaborate with are already in business, you can be assured of their professionalism, commitment and willingness to go the extra mile to get the job done. Lastly, it also means that your existing relationships and work remain yours – giving you the all-important fallback in times of trouble.
In a ‘traditional’ model, facilitating the departure of a director or partner is very tricky, with potentially damaging consequences for the consultancy. With collaboration, departure does not mean the end of the business, just a new opportunity for somebody else.
For collaboration to work you must agree certain principles, develop a business plan and have a clear marketing strategy. This ensures that different parties adopt a shared vision, collectively prospect for new business and have a clear arrangement about how the work and payment is distributed. Existing resources within the individual consultancies are used to fulfil contracts. Trust and honesty are essential ingredients if effective collaboration is to work.
So who could benefit? Collaboration is ideal for start-ups, as it gives them more confidence to make the difficult first step from employment to running a small business. It also suits people who want to grow their existing business, but are not comfortable with the ‘boom or bust’ approach to growth. Also, it helps small creative businesses exploit horizontal sectors or vertical markets in a more focused way. Finally, it’s ideal for those wanting a ‘lifestyle’ business – more and more relevant as people like myself choose to work in the countryside in pursuit of a better work/life balance.
I have developed collaborations with consultancies I first met at regional creative networking group Creative Shropshire. These groups are a useful way to find suitable ‘partners’. We, as an industry, should do more to support such networking groups, and development agencies should realise the opportunity that exists within them.
Stuart Spooner is founder of Spooner Design and Marketing
BENEFITS FOR SMALL CREATIVE BUSINESSES
• Transform your service offer
• Gain confidence to approach bigger customers and win more demanding projects
• More resources to meet peaks in demand • Enables business growth without the responsibility of large staff numbers
• Specialist talent from collaborating consultancies can be used to enhance particular projects
• Reduces time spent sourcing suppliers and freelances