Many design businesses operate on a shoestring, working their socks off for little return. So how do you take your creative business from a struggling solo artist to a staffed agency with a swanky office and a raft of blue-chip clients? Digit found out.

border=0 /><BR></div> </p> <p> There’s no shortage of creatives who have successfully shed staff status in order to freelance, or who have gone on to build thriving design partnerships and small-team agencies. </p> <p> Such ventures are incredibly demanding, but the challenges of building a sizable agency able to scoop major contracts is another matter altogether. For every success story there are dozens of cautionary tales. </p> <p> Even those who have succeeded in building internationally recognized agencies have the never- ending challenge of sustaining this success. But that’s another story. </p> <p> This one is about how they got there. Just four years ago, ‘getting there’ was a distant dream for Firedog (<a rel="nofollow" href="http://www.firedog-design.co.uk" rel="nofollow" target="_blank">www.firedog-design.co.uk</a>), a two-man operation working from a Wimbledon sitting room. </p> <p> Today, it’s an esteemed ten-person design and branding agency based in London’s hip Hoxton Square, and with a client roster that includes the BBC and Sony Ericsson. Was this expansion by design? </p> <p> “We had a wish-list of what we wanted to do,” says managing director Fraser Black. “It was a vision of where we saw the business being in 12 months’ time, and meant we always had something to aim towards.” </p> <p> But what motivates growth – passion or necessity? “For us, it was both,” says David Cox, joint managing director of leading London post production house Baraka (<a rel="nofollow" href="http://www.baraka.co.uk" rel="nofollow" target="_blank">www.baraka.co.uk</a>). </p> <p> “We needed the passion to provide clients with the best level of service, and this drove the need to add strands to the company to provide the service level required. Also, there’s a critical mass that works better financially. </p> <p> “For example, if you run a staffed reception, then those overheads are better spread across six edit suites rather than two.” </p> <p> Black stresses that whatever the motivation, one necessity is marrying great design with great organization. </p> <p> “Just as important as having a good creative product is knowing how to find the business, how to manage the business, and how to make a profit on the business,” he says. </p> <p> These are not core skills for creatives, which is why Black believes every start-up agency needs a good “suit” – someone with proven business acumen. </p> <p> “How many designers want to spreadsheet profit and loss? How many want to manage a rolling sales forecast? How many want to work through a 27-page legal document to look out for areas they might get caught out on? None. You need to find people who will cover these areas.” </p> <p> <h2>Rare breed</h2> </p> <p> Firedog creative director and co-founder Clifford Boobyer agrees. “When creatives try to manage all the different processes it detracts from their core competencies. It’s like a business manager trying to do all the visuals. Creatives with a business head are rare individuals.” </p> <p> Rare, but they do exist. Unit9 (<a rel="nofollow" href="http://www.unit9.com" rel="nofollow" target="_blank">www.unit9.com</a>) is a 20-man digital production studio, also based in Hoxton. Its managing partner and creative director is Piero Frescobaldi, who in Unit9’s early years found himself sharing administrative duties with three other creatives. </p> <p> “Our jobs evolved through trial and error,” says Frescobaldi. “Eventually, we worked out what each other’s strengths were. It was quite organic. </p> <p> “Somebody looked at new business, somebody looked at accounting, and somebody looked at the day-to-day running of things and recruiting. People’s natural abilities came to the fore.” </p> <p> But, he warns, it was never easy. “It’s at this point that many business relationships start to fail, and people go their separate ways. But as long as the relationships between the founders stay strong then you’ll always find a solution. We were fortunate to all have a strong will to make it work.” </p> <p> Graham McCallum’s first agency venture failed not from lack of will, but because of a fundamental personnel problem. </p> <p> “The big lesson I learned from my first venture was never form a partnership with someone who does the same thing as you,” says McCallum. </p> <p> It’s a lesson enshrined in the very name of his successful second venture – Kemistry (<a rel="nofollow" href="http://www.kemistry.co.uk" rel="nofollow" target="_blank">www.kemistry.co.uk</a>), a 20-strong Shoreditch-based branding and communications agency that McCallum founded with managing director Ricky. </p> <p> “The fact Ricky was incredibly experienced in production and that I’ve got a creative background worked well,” explains McCallum. </p> <p> “After all, it is a kind of marriage, so the principals in the company should have very defined roles.” Even so, there remained considerable hurdles for the pair to negotiate. </p> <p> “When we first started, we had no concept of marketing,” says Churchill. “We assumed we’d do great design and get noticed, and it worked, because we were lucky enough to win awards early on. </p> <p> “This gave us a profile, which helped with growth. If you haven’t got the budget for marketing then awards are a free and effective way of building your profile.” </p> <p> It was three years before Kemistry could afford to employ a marketing expert, and although the move proved hugely positive it gave rise to a new set of challenges. </p> <p> “It gave us a real boost in terms of profile and was a catalyst for growth,” explains McCallum, “but then you have to increase the creative and production resources to match the increased workload.” </p> <p> <h2>Hire and fire</h2> </p> <p> Recruitment is the very essence of growth, but it’s an issue that costs many agency directors sleep. “Recruitment can be very time consuming, expensive and painful, too, because you can find someone, put them in a position, train them up and all of a sudden you realize their skills aren’t what you need,” says Firedog’s Black. </p> <p> It’s an issue to which some have a novel solution. “Get them drunk,” says David Cox of Baraka. “After you’ve done all the normal recruitment stuff, take them with a group of other staff to the pub. Under the influence of alcohol, their guard will drop a bit to reveal their true selves, and where they see themselves being in a couple of years’ time. </p> <p> “You can also see how well they gel with existing staff, as this is very important in a small company where personnel clashes can be very counter-productive. If they’re teetotal, see how they react to others in a social setting.” </p> <p> Kemistry’s Ricky Churchill agrees that personality is as crucial as talent. “One of the most important things is finding people who are the right cultural fit. Getting that right first time is critical to managing them.” </p> <p> Clifford Boobyer believes that you have to get the perfect fit when it comes to recruitment. “You must never accept less than 100 per cent of what you need,” he says. </p> <p> “For small agencies the calibre has to be that much higher – in a bigger agency there are more places to hide. This makes the employment process especially draining. </p> <p> “To lure someone from their big, comfortable agency you must treat them like you’re trying to get them to marry you.” </p> <p> Not that there’s any shortage of young designers banging on agencies’ doors. The trick is making the best use of this abundant supply of willing talent. </p> <p> “We have a prominent recruitment area on the Web site and get a huge number of CVs, and we read every one,” says Piero Frescobaldi of Unit9. </p> <p> “Whenever we’ve found ourselves desperate to recruit then we’ve rarely made the right decision, so our approach now is to meet people as we go along. The ones we really like we keep in touch with, and if they’re working somewhere else when we come knocking then we’ll try to offer them a better deal.” </p> <p> Boobyer is also up to his eyes in CVs. “We have a high-status brand,” he says, “and get at least ten CVs every day from designers across Europe. But it’s no good using a recruitment agency – you need a creative director to be able to judge a designer’s portfolio.” </p> <p> If recruitment is one pre-requisite for an expanding agency then staff retention is another. Each agency may have its own philosophies, but the common aim is to keep people happy and focused. </p> <p> “We wanted to treat our staff as we expected to be treated when we were staff,” says Fraser Black. “We believe in providing generous commission structures to project management staff, because they’re selling and converting opportunities with clients. </p> <p> “And all our staff are on bonus systems, because we believe if the going’s good then people need to be rewarded. It’s also a competitive marketplace, and if you have good staff and they’re unhappy then they’ll leave quickly, and then you’ve got to start all over again.” </p> <p> Piero Frescobaldi has a TV commercials background – “an industry that’s driven by teamwork”. It’s something he decided to bring to Unit9. </p> <p> “I wanted to make sure it was never about one person, but about solutions that are provided by the many. </p> <p> “For this reason we’ve always kept the structure as flat as possible, and encouraged people to share ideas. Regardless of ranking, everyone gets a chance to lead a project and pick his or her team.” </p> <p> But Black warns that there is a line between consideration and friendship that you cross at your peril. “You can’t be too friendly with your staff, because then you don’t get the level of trust and respect you need. </p> <p> “If you’re in the pub three times a week with your design team they’ll treat you like a friend and not a boss. It’s important that you don’t overstep that line.” </p> <p> Recruitment and people management are just two of many onerous tasks facing creative directors, and it’s a role pivotal to the success of any agency with aspirations of growth. </p> <p> One hitch here is that it appears most designers are ill-suited to the post. “Great designers don’t make for great creative directors,” says Frescobaldi, “because great designers tend to be really passionate about their own design, whereas great creative directors are attached to what others do, which is exactly the opposite. The job is a lot bigger than people imagine.” </p> <p> Boobyer concurs. “If you look at your average designer they’re pretty quiet people, sitting at a workstation and listening to an iPod. Being a creative director is so much more than just managing a couple of appendages on the end of your body. </p> <p> “It’s much more of a management role – you have to meet clients, so you can’t be insular, and you need to be a really good salesman.” </p> <p> Frescobaldi agrees that the individual’s vision for the project and the company is critical. “It’s not a vision you impose on others but a vision whereby you understand what a project needs, as well as how to get the best out of people,” he says. </p> <p> Black is dismissive of young hotshots who claim creative director status. “I find that for many young designers being creative director is the veritable Shangri La of the creative industry. </p> <p> “There are some designers fresh out of St Martins who call themselves creative directors, but they’re not, because to be a true creative director you’ve got to have people skills. You’ve got to understand how to read a balance sheet, and communicate your opinion on a client’s business. </p> <p> “You also need to be direct across all media - pure graphic design, corporate services branding, digital media, advertising, and direct mail. In short, you need an understanding of how to use creativity to deliver a profit for a client.” </p> <p> Designers sometimes baulk at the manager-salesperson nature of the creative director role, fearing creative frustration. But experienced creative people are realistic about the purpose of design. </p> <p> “The reason you’re at work during the day is to make profit, for yourself and the client, which is very different to true creativity,” says Boobyer. </p> <p> “For a creative person who ends up running an agency things can get frustrating if work is your only creative output. Most of the creative directors I know have some other outlet. One paints – he has an entire second house full of canvasses – and another is writing a movie script. I do a bit of music producing and play the bass.” </p> <p> For others, the role itself can sate one’s creative needs. “I have a creative side and an entrepreneurial interest,” says David Cox of Baraka. </p> <p> “The common ground between the two is to couple my interest in business with my creative leanings to find better and more efficient ways of working. This provides our clients with the support they need to make their projects more successful, and it’s this fusion I find most exciting.” </p> <p> <h2>Cashing in</h2> </p> <p> And now for the part you’ve all been waiting for – how running a major agency will make you rich beyond your most fanciful reckoning... right? </p> <p> “For the first two years of the business I didn’t know what pay was,” says Piero Frescobaldi. “We all took nothing out of the business. I survived on my savings from the TV industry.” </p> <p> It was the same for Firedog’s Fraser Black, who says enduring such hardship is vital to the success of any growing business. </p> <p> “You need to understand that you’ll be the last person to be paid,” he warns. “If you want to grow a business you have to invest in staff, premises, and software and hardware so that you’re able to deliver on any contracts you’re lucky enough to land. </p> <p> “You’ve got to make sure your partner can support you – that they’ll accept that for a couple of years you’ll be earning nothing more than a basic salary you can scrape by on. Firedog’s original partners all took out loans to pay our mortgages and bills. </p> <p> “Only when we had built the balance sheet and had the contracts flying in did we pay ourselves market-related salaries. I think that this is something most young designers wanting to grow their business would probably find quite difficult. It’s an evolutionary process. You crawl, then walk, and eventually run.” </p> <p> Baraka’s David Cox endorses this hard- learnt advice. “You have to be very careful with mounting overheads and cash flows. The biggest cost is people, and it might take a number of months for the work of new staff to end up as money into the bank account. </p> <p> “This creates a gulf in cash flow that can easily be overlooked, and bring about the end of the company very quickly.” </p> <p> So aside from no pay for two years, recruitment nightmares, wading through profit and loss accounts and the worry of being unable to pay your people, owning a big agency is great... isn’t it? </p> <p> “The best thing is the sheer satisfaction at having created something,” says Graham McCallum, “and seeing a lot of people growing within the company. Many of the students that we trained up in the early days are now big stars in their own right.” </p> <p> Similarly, for Piero Frescobaldi the joy is all about the people. “What I love is that there’s a great bunch of people who choose to be here – and who get paid at the end of the month.” </p> <p> <div id="otherBodyContent"><p> <div class=inlineimage><img src= Print

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