How design businesses can survive and thrive post-Brexit

As consultancies face up to the prospect of the UK leaving the European Union, the Design Business Association’s insight and content editor Hannah Paterson looks at what design businesses can do to help themselves.

Brussels , Belgium - March 23, 2015: The European Commission Headquarters of European Community
The European Commission Headquarters of European Community, Brussels, Belgium

It’s nearly a month since the EU referendum result. One month of extreme political and economic change. Many consultancy owners are concerned about how revenues and profitability may be impacted; how successfully their businesses may continue to trade and perform.

It’s worth remembering the design sector has been growing at well above the rate of the UK economy, and the quality and effectiveness of our offer is world-renowned. If we pick between the worry and uncertainty, what opportunities and positives can our industry take forwards? How can we pro-actively face these challenging times?

Pro-activity

“Here’s what we always advise in times of turbulence,” suggests Shan Preddy of PREDDY&CO and author of How to Run a Successful Design Business, “One: Turn up the heat immediately on the satisfaction, retention and development of current and recent clients. They are the easiest, quickest and best source of future business. Two: Check over your vision, values, goals, business strategy, finances, product quality and marketing programmes. Perfect? If not, work on them. Three: Invest heavily in your team members by giving them expert internal and external coaching and training. With the right knowledge, skills and capabilities they will perform at their best and support you fully.” And Preddy adds: “Doing these three things now will protect you from bad, and prepare you for good times ahead, whatever the eventual impact of the referendum result.”

Jack O’Hern of accountancy firm Wright Vigar supports this message when he says: “If your market is going to be affected, then appropriate contingency planning ahead of falling sales or rising costs is the duty of a responsible management team, but avoid talking oneself into acting too quickly.”

Reasons to be cheerful

“Life must go on,” says business advisor Ian Cochrane, Chairman of Ticegroup. “There will be opportunities for positive thinking design consultancies to help their clients to grow and thrive in this new trading environment.” Measures are being put in place to stave off recession and boost the economy, and Cochrane flags that there are at least three reasons to be cheerful:

1. Borrowing should be easier moving forward and interest rates are likely to remain low for the foreseeable future. This will enable agencies to invest in staff, learning and technology to accelerate growth.

2. Corporation tax may go down which will not only attract inward investment to the UK but automatically increase post tax earnings and the valuation of design businesses.

3. The weaker sterling exchange rate will boost overseas sales potential.

“Agencies have a real opportunity to build and prepare their businesses ready for a possible trade sale in 3-5 years’ time,” Cochrane says.

On consultancies’ financial concerns, accountant Green and Purple’s managing director, Peter Carter also has some good news. Design businesses which are service providers to the EU with few overhead costs in those markets, are in fact beautifully placed – they are now more competitive than a supplier in their client’s home country.

“Any piece of work you quote in GBP now is worth the same to you as it was, but costs your clients less, because of the pound’s weakness, which will probably recover slowly but not for quite some time. If you already have any foreign-denominated retainers: happy days, they’re worth more to you than they were last month,” says Carter.

Peter also flags that during the last few downturns we have seen a gradual shift where advertising and marketing spend is being seen as a recovery tool, rather than a discretionary nice-to-have, so consultancies aren’t getting “switched off” in a downturn – at least no more than other essentials like people and property costs. “Hold your nerve when quoting and tendering,” he advises, “you shouldn’t need to drop your prices to undercut ‘local’ competitors, and the UK has long had the edge in terms of sharp and effective design.”

The long game

“There is a long way to go until we are clear again on our working relationship with our European friends,” says  design industry expert Kate Blandford of Kate Blandford Consulting. “Stay calm, keep up those friendships, continue to do your extraordinary work, building healthy commercial futures for your clients’ brands.”

It’s a sentiment echoed by business development consultant, Catherine Allison of Master the Art: “Surely now, more than ever, agency CEOs need to project positivity, ensure agency staff remain confident and engaged, invest in their personal development and train them to represent the agency in the best possible way? Only then will they be best placed to convert those new business opportunities that do come their way.”

So in these extraordinary days, months and years ahead, this will be the time to really master your messaging to your clients on the value you can bring to their business; the ROI and commercial growth they can expect to see from investing in design. As the DBA’s chief executive Deborah Dawton says: “UK design is world leading. Our industry’s proven ability to drive both business and economic growth has not changed, nor has the quality and effectiveness of our offer. UK design is a potent business asset and a sound commercial investment.”

It is our time to design a better future for business, government and society. The opportunity is there. 

www.dba.org.uk

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  • James Souttar July 22, 2016 at 3:06 pm

    However, the fundamental problem of the Referendum result is not the uncertainty it has caused, or the economic implications of Brexit. It’s the damage it has done to ‘Brand Britain’.

    Our creative industries have benefited enormously from the perception of the UK as a young, vibrant, multicultural society (it could even be said that, in recent decades, they have depended upon it). This was the vision so brilliantly presented to the world at the 2012 Olympics. But only four years later the Referendum vote has given the lie to this image: it’s shown us to be old, grey and stuck in the past – a people who don’t like foreigners, and certainly don’t want them coming here. And it’s a brand fail of epic proportions: FIFA, LIBOR, Volkswagen, MPs expenses and Kids’ Company all rolled together. Worse, perhaps, because while these betrayals brought remorse and change, the Referendum result is moving from ‘advisory’ to national policy.

    We’re not going to ‘survive and thrive post-Brexit’ unless we grapple urgently and radically with the damage we’ve done our national brand. And at this stage I can see no alternative except for a concerted effort – by all those who stand to lose most from the ‘xenophobic Little England’ repositioning – to get the message out that ‘We are not that Britain!’ If we can create an alternative, ‘challenger’ version of Brand Britain, there may be some hope for us. I can’t help feeling, though, that 24 June 2016 will be seen as the day that marked the end of Cool Britannia, and the beginning of a steep decline in our creative pre-eminence.

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