A leap of faith

Some say launching a start-up in a downturn is madness, others see it as the perfect time to make the leap. Suzanne Hinchliffe offers budding consultancy chiefs a guide on what to do, and asks three brave souls who’ve done it for advice

Setting up a business can be a daunting task, no matter what expertise you have or what the state of the economic climate is. You could be a budding creative, recently graduated and struggling to find that first step on the career ladder, a designer with a few years under your belt but labelled with the redundancy stamp, or on top of your game and finally taking the plunge to go solo.

A fledgling business is a challenge, scary and hard work, but it can be the most rewarding thing you do if it works. Here are some handy tips from those who have done it and advice and resources from leading experts to give you the kick-start you need to make it a success.

A good idea

Is the middle of a recession really a good time to set up a business? There is always going to be an element of risk when starting your own creative business. However, if you’re starting a smaller business there is a tendency to be frugal in a recession. With limited capital, close attention to detail is important, so research the creative market to see where people are cutting back and what is doing well.

‘We’re seeing lots of start-ups during this recession, as people become fed up working for large consultancies making impersonal corporate decisions,’ says Mandy Merron, partner at Kingston Smith W1. ‘Historically, there are always waves of start-ups and those who have set up at the beginning of a recession are the larger consultancies still around today.’

‘It is difficult to bend an existing business, so it is best to start from scratch,’ advises Merron, ‘Working with your own clients, making it work when things are tough tends to drive growth.’

Resource: London accountancy firm Kingston Smith W1 specialises in the creative industries. It has developed a guide called Starting a Business in the Creative Industries. Two main points to consider: have a good idea, and research and understand your market


‘Start your marketing thinking before you start your business,’ says Shan Preddy, a partner at Preddy & Co, which specialises in business management. It is important to be clear about what you’re offering and who you are offering it to. Target your market – either offer a general product or service to a wide audience or a more focused product or service to a niche market.

Whichever option you take, think about:

• Who will buy your services?

• Location – keep you clients close or easily accessible

• Communication style – how do your clients think/talk?

• Networking – where can you meet new clients?

• Get in touch – write letters, let people know what you are doing

If you are on a low or no budget, ‘Use your brains, be creative. That’s your job,’ says Preddy. Have a good website using the same URL as your business name. Invest in business cards and do everything else digitally. Never give work out for free or cheaply, as clients will think that it is standard practice.

Resource: How to Market Design Consultancy Services: Finding, Winning, Keeping and Developing Clients, by Shan Preddy (Gower, 2004)


Advice is crucial before you take on property. According to commercial property specialist and workplace adviser Haywards managing partner Nick Cook, ‘Taking on a traditional property lease is the biggest commitment you will sign and the most difficult to get out of.’ Be clear about why you want to take on property – it is a business, after all, and not a dream location. Think about what sort or equipment you need, how many staff you have, who your clients are and if they are local, national or global.

Property options:

• Sole traders – start from your bedroom, but use clients’ offices if you need technical equipment

• Creative hubs – if working from your bedroom doesn’t appeal, working at an address with a reputation for creativity could be an option (see feature on creative hubs, DW 23 April)

• Fewer than ten people, but set to grow further? – start by going to a serviced office operator, such as MWB or Regus. Take a licence for three months and renew accordingly

• More than ten people and set to grow? – the overall cost of going for a more traditional office will save you money. Try speaking to a commercial property surveyor; the Royal Institute of Chartered Surveyors has listings of approved surveyors. Research and ring around commercial property agencies to find out about rates, rents and service charges GRADE A (per ft2)GRADE A (per m2)GRADE B (per ft2)GRADE B (per m2)

Finding the funds

One of the toughest challenges you will face when setting up a business is securing funding. In the current economic climate, it is probably the most inappropriate time to borrow money. Kevin Duncan, owner of Expert Advice for Starting and Selling Businesses, says, ‘If you don’t need to borrow money, then don’t.’

The ‘One page business plan’ from Duncan’s book Start is a good way to figure out how much money you need. ‘Always start with the amount you want to earn and then work backwards,’ he explains. Establish the type of consultancy you are, whether you’re running it as a lifestyle concern with little profit and little tax, or as a company you eventually plan to sell.

See how much money the founding team can raise and what proportion of the business they want. Consider if you want external funders to become shareholders. Will you need a bank loan? Remember banks will not put more into a business than the management has done.

Research the Web for Government bodies, business links and trade support to see if they offer grants. The Design Business Association and Nesta, which invests in early-stage companies, may be able to help, depending on your circumstances. National Business Angel Network also offers business funding and advice.


Start: How To Get Your Business Underway,

by Kevin Duncan (Capstone, 2008) – www.expertadviceonline.com

National Business Angels Network – www.angelsden.co.uk

Nesta – www.nesta.org.uk

Design Business Association – www.dba.org.uk



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You’ve been there and done it, so what advice would you give to those who are thinking of setting up their own creative consultancy?
When Someone started, we (the partners) did all our own billing, invoicing and money chasing as well as the design. This became a real hardship, especially when it came to completing VAT returns and corporation tax – we are designers, after all. We managed this for about a year or so before we wanted to kill each other. What really helped was having a freelance accountant come in once a week and do all that for us – it represents a hefty cost to the business, but it was a godsend. Now, we have a hardman when it comes to chasing payment (leaving our client relationships intact), as well as someone who can map out and manage our huge profitability and forecasting in simple diagrams. Now we don’t go and spend it all at the Wolseley before the taxman can get it. The other tip I have is to not get caught up in the ‘big project’ you are working on – and have billed for – without looking out for new work at the same time. This helps stop those ugly cashflow issues.
David Law, Founder, Someone
Year set up: 2005

Make the most of your network of independents to create custom teams. As a young company in an economic downturn this gives us a real advantage over some of our larger, more established competitors. We can quickly pull together the right team of experienced, skilled and passionate people. We don’t have the overheads of a traditional consultancy, we don’t have hangers on and we don’t have to train junior staff, so our clients get a fantastic team and great value for money. It means that we can compete with the big boys and win important and interesting projects.
Chris Allen, Partner, Powell Allen
Year set up: 2008


Hmmm, the ‘big leap’. When to take it, should you take it, who to take it with and what about a name? So, timing of departure, doing the ‘f*** you, I’m off’ and immediately trying to pinch clients is not the greatest approach. Have a respectful relationship with those you leave, it pays off in the future through support, recommendations and even the odd client introduction. Think about the leap, but don’t over-think it. Do a business plan, talk to potential contacts, put a date in the diary – just do it. In partnership? It’s good to have different skills, but make sure you sign a partnership agreement – it’s difficult, like asking for a pre-nuptial deal in the ‘no, I love you more’ part of the relationship, but stick it in a drawer, out of the way. Get a good accountant, one who is polite, timely and proactive – steer away from self-styled ‘business adviser’ types, because they’re a waste of time and money. Then? Go out there, do what you do best, in the way you want to do it – you won’t regret it.
Dana Robertson, Founder, Neon
Year set up: 2007


Copyright, contracts, insurance

Registering a product, a brand name or invention under a trademark or patent is paramount. Browne Jacobson Intellectual Property partner Mark Daniel and associate Sara McNell explain, ‘When starting up a company or brand the first thing you should do is register for your own protection.’

• Commercial searching – on a low budget, do a free search on Google to see what competitors are out there before launching a brand• Free searches – there are a number of websites which allow you to do this. On the UK Intellectual Property Office site you can see what brands have already registered

• The next step is to register the name of your company or brand. ‘Be distinctive,’ McNell advises. ‘Don’t always go for an obvious name and steer away from names associated with the product.’ If the business is online, check out bodies that govern domain names, such as Nominet for .co.uk domains and Icann for .com domains

• Once the business is up and running, get into place terms and conditions between you and your suppliers. If you are dealing with third parties, understand your position, what the liabilities are, and then get the contract signed. Invest in product liability insurance


UK Intellectual Property Office – www.ipo.gov.uk

Office for Harmonisation for the Internal Market – www.oami.europa.eu

Companies House – www.companieshouse.gov.uk

Nominet – www.nominet.org.uk

ICANN – www.icann.org

European Patent Office – www.epo.org


Staffing – you need to consider what skills and resources you need for the business. If people are willing to take a risk and join you, take legal advice on barriers you need to overcome. Look at what insurance, IT equipment, accounts and payroll you will need. Taxation can appear a bit of a headache, so seek specialist advice. Make sure you understand early on what taxes the business is liable for. This will depend on its size and whether it is profitable.

There are always other options if the thought of setting up a business fills you with dread. Freelancing opportunities will be in demand during the recession as companies downsize their staff ratios.

If you choose to set up a business it will be down to you to make it a success. Be ambitious and seek help when you need it – without an element of risk there would be no rewards.

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