Business plan 2013
Company Information
Name address of business Inklink Design Limited 11 Needham Road City of Westminster W11 2RP
Owners Fellipe Barros Creative Director No other equity holders
Type of company Limited Liability Company Independently owned
Registered office Gareth Thomas Orchard Davies 3 Burt Street Cardiff Bay Cardiff F10 5AF
Business Plan 2013
2
Contents Preface 4 1. THE BUSINESS
6
1.1. Description of business. . . . . . . . . . . . . . . . . 6 1.2 Inklink purpose. . . . . . . . . . . . . . . . . . . . . . . 6 1.3. Objectives. . . . . . . . . . . . . . . . . . . . . . . . . . . 6 1.4. SWOT analysis. . . . . . . . . . . . . . . . . . . . . . . 6 1.5. Consulting and creative positioning . . . . . . . 8 1.6. The market and outlook. . . . . . . . . . . . . . . . 8 1.7. Competitors. . . . . . . . . . . . . . . . . . . . . . . . . 9 1.8. Inklink founding partners. . . . . . . . . . . . . . . 10 1.9. Marketing. . . . . . . . . . . . . . . . . . . . . . . . . . . 10 1.10. Office location. . . . . . . . . . . . . . . . . . . . . . 11
2. Financial Management
12
2.1. Introduction. . . . . . . . . . . . . . . . . . . . . . . . . 12 2.2. Financial information . . . . . . . . . . . . . . . . . 12 2.3. Financial projections . . . . . . . . . . . . . . . . . . 12 2.4. Financial requirements. . . . . . . . . . . . . . . . . 13
3. Notes to Financial information
14
3.1. Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 3.2. Fees/calculation. . . . . . . . . . . . . . . . . . . . . . 14
Business Plan 2013
3
Preface
What we do We are a multidisciplinary studio for visual communication and design consultancy with the aim to provide innovative solution for clients needs. The business designs implements communication solution that embrace both traditional and digital media. Our business has also an online store in which customers can purchase design products (posters, toy-art, books, t-shirt, etc.) made by us or by our online store partners.
Beliefs and personality • Honest: We are rooted in social responsibility, sustainability and ethical values. We are committed to find alternative materials and process in every design project with the aim to achieve more with less. • Different: We look at things from a different angle. A fresh approach to communication and design. • Current / Young: We look for new technology and media to apply in our projects. • Forward-Thinking: We celebrate imaginative and cutting edge design solutions putting our clients a few steps ahead of their competitors.
Slogan Liking fresh ideas.
Proposition We do not recognise any boundaries between creative platforms in order to develop the best communication solution. Producing sustainable, hight quality design and building strong relationship with clients is our priority in every project. Our company defines positioning and communication strategy and brings it to life with strong ideas from fresh insights.
Unique selling proposition Specialising in visual communication with marketing emphasis having an absolutely energy to find new ways in solving problems. We focus on give a hight level of quality in every project. Our online store has products made with the thinking on social responsibility and sustainability.
Business Plan 2013
4
Output • Brand and corporate identity design • Positioning and brandy strategy • Name development • Implementation and roll-out of corporate identities • Advertising and PR strategy • Communications audits • Corporate communication and print • Corporate social responsibility orientation • Internal communications and brainstorming sessions • Design and developing communication strategies across traditional and digital media. • Print design (books, promotional materials, etc.) • Packaging design • Digital design* - web design, mobile application interface design and motion graphics *Digital design will be offered as a service, but will be outsource to freelance developers.
Business Plan 2013
5
1. THE BUSINESS
1.1. Description of business Multidisciplinary design studio for visual communication with online store to sell design products.
1.2 Inklink purpose Define and create communication and design strategy to give companies clear positioning against competition and support a company’s business objectives
1.3. Objectives • To create a new niche communications and design positioning. • Establish a business that is know for creativity. • Be cost effective and provide hight quality, innovative design solutions for clients large and small. • Build a secure and respectable position in the market and a foundation of strong client relationships. • Build a strong and visible brand and reputation among similar agencies by using PR and launch communication tools professionally. • Build a strong reputation as online design shop.
1.4. SWOT analysis Strengths • Strong skills in a range of multidisciplinary design areas. • High quality and innovative design applied in every project. • Our multidisciplinary structure will allow us to use different platforms and tools to communicate the message to the target audience. • A strong sense of delivering real value in client relationships and commitment to every client • Our projects are done in consideration of clients capabilities and their customers needs. Our goal is to delivery appropriate,actionable and tangible strategies. • Competitive fees and tight control of costs, especially employee costs. This would be achieved by both effective credit control, and working with freelance resources when necessary, rather than extending the workforce.
Business Plan 2013
6
Weaknesses • Lack of track record could make the business be perceived as naive and/or inexpedient. • Lack of traditional business knowledge. • Lack of experience in the UK market. • The small size of the company might leads to a potential perceived lack of depth resource for larger programs. • We may not be able to invest in people, premises and promotional activity as we would like to, because a lack of capital behind the business makes us dependent on being successful at the outset and on managing costs rigorously. • Being a sole trader means that all responsibilities fall on one person which could be overwhelming. Opportunities • We dedicate to expanding the parameters of brand and design communication across all with our commitment and fresh insight. • As a sole trader with low cost base, high quality design solution can be offered at a much low cost them medium and large agencies. • Having an online store delivering hight quality products which make us more visible on the internet. Furthermore, it also increase the network of design, photographers, illustrators that can be our collaborators. Threats • Competition from other design studio and freelancers in London that are work in the same field. • Inklink is just another small design studio in an oversupplied market, rather than as a distinctive, desirable proposition. • We are not successful as quickly as we would need to be which will create pressure on income/cash flow. • Over-saturation of the design market.. • The market remains depressed or worsens and either clients won’t commit or the decision making process is too slow.
Business Plan 2013
7
1.5. Consulting and creative positioning Consulting The ambition is to provide flexible and intuitive consultancy to help our clients to plan communications and branding strategy. The objective is to identify new ways to serve and support our clients by uncovering communication needs, behaviours and desire. Creative The objective is to create inspired design solutions to support strategic positioning, making creativity work for a wide range of client communication needs. Our intention is to finding the most effective way to get messages across different design disciplines producing fresh ideas that are accessible and appropriate. We have the approach to create strong, provocative relationship with our clients, and ensure that our energy in creation flows as freely as possible.
1.6. The market and outlook The UK design industry has experienced healthy growth over the last five years. It is estimated that there are now 232,000 designers working in the UK, an increase of 29% since 2005. The overall annual earnings of UK design businesses are estimated at £15bn – this includes design consultancy and freelance fee incomes as well as in-house design team budgets – an increase of approximately 15% since 2005, taking inflation into account. The financial picture is positive for some, with 37% of design businesses reporting a rise in fee income/budget, but challenging for others, with 26% reporting a drop in income. The industry remains clustered around London and the South East, with 40% of design businesses based here. The majority of design businesses work in communications design and in digital and multimedia design. There are now 65,900 freelances, 39% more than in 2005. Overall freelance designer fee incomes have climbed by 22%. There are 82,500 designers working in design consultancies, 35% more than in 2005. However, this growth in employment has occurred whilst the total number of consultancies has declined to an estimated 10,800. The results suggest that the proportion of larger consultancies has fallen therefore employment growth must be attributed to growth amongst the smaller consultancies. The number of in-house teams has increased by 10% - and 8% more designers are employed by them (83,600 in total) – despite their overall combined budget reducing by 34% compared to 2005. This is a positive indication that employers are holding on to creative employees despite downward pressure on budgets. The capital accounts for almost a quarter (23%) of design businesses.
Business Plan 2013
8
The South East region is home to one in six design businesses. Well over half (60%) of design consultancies employ fewer than five people and over a further quarter (27%) have less than ten staff. Inhouse teams tend to be larger than consultancies, over a third (37%) of in-house teams comprise five or more designers. Many of these businesses are relatively young: well over a quarter, at least 29%, in every region or country of the UK have been in business for three years or less. 55% of design consultancies have an annual fee income of between £100,000 and £500,000, 58% of freelancers have an annual fee income of less than £50,000. The broadly positive picture for the design industry despite the recession is reinforced by the reported demand for design services. 61% of digital and multimedia design firms reported increased demand since 2005, followed by 41% of communications design businesses saying demand has increased. The main competition for most (92%) design businesses comes from within the UK and in many instances is local to the business. More than two-thirds of design businesses think competition has increased over the past three years. Overseas competition is more prevalent amongst in-house teams. Designers collaborate both with other design businesses and non design businesses. Lots of work is won by designers, some of which is then passed on to subcontractors. Around half of design businesses said they collaborate with other design firms – usually on short-term projects. Just over half (51%2) of designers have a degree or equivalent qualification. This is an increase of 10% since 2003. Interestingly, 37% of design consultancies and in-house teams require a degree whilst 32% of the same grouping do not require a base level design qualification. Business practices remain similar to results from 2005. Most design businesses work on a fixed fee or day rate basis, in comparison only 4% work on a client retainer. 66% of designers do not take any action to protect their IP and almost 60% of designers feel either very or quite well equipped to advise their clients on sustainable design however only 18% of designers consider it as an important factor in winning business.
1.7. Competitors The proposition is likely to cut across disciplines and traditional sectors and our competitors may not be traditional ones. Our main competition for the business would be the other start up or break away design consultancies and more established design studios in the UK. Indirect competition will come from advertising agencies and PR consultancies. Our challenge is to be highly distinctive to stand out.
Business Plan 2013
9
1.8. Inklink founding partners Fellipe Barros is a graphic design for marketing and advertising campaigns including strategic brand development and campaign management originally from Rio de Janeiro, Brazil. He studied graphic design with emphasis in marketing at ESPM, in Brazil. In addition, he studied MA Design for Communication at University of Westminster in London. Fellipe has gained experience in a multidisciplinary design role (animation, graphic design, visual communication, etc.) at Petrobras Aviation. Management responsibilities Fellipe Barros will be responsible for bulk of the creative output of the studio and will be responsible to find clients. In addition to Fellipe, freelancers designers and developers will be employed on a pro rata basis. An account will be employed periodically to manage the accounts the business and ensure compliance with Revenue regulations.
1.9. Marketing Markets/clients The priority market will be UK/Europe with the target audience on UK small business, which also represents 49% of the design market. Furthermore, Inklink will attend Portuguese language countries like Portugal, Angola, Mozambique and Brazil Sectors of particular interest include financial services, public administration, health and education. Since these industry sector constitute 68% of the UK design business. Priority contacts will include former clients/warm contacts and other established prospective client relationships. Services It is believed that large strategic repositioning programmers will be relatively scarce considering our newly established position in the market. In this manner, the company needs to act tactically and get the best value from our target clients, smalls business. Business development/new clients It is planed that a focused amount of time will be dedicated every week to attract new clients and also promote Inklink on online blogs, social media, magazine, etc. Initially one full working day per week will be set aside for this, however this will be cut down during busy times and also. We believe that good relationships and personal contacts are crucial to business development success. In addition, a constant level of marketing activity is also essential.
Business Plan 2013
10
1.10. Office location Initially, the business will work out of Fellipe’s home office which is fully equipped with all necessary equipments for the business (ie- computers, softwares, laptop, printer, scanner, etc.) It is planed that in the future according with the business growing, we will move to a shared office space with serviced facilities (meeting rooms, receptionist, etc.) in order to facilitate a larger operation and a more professional presence that is necessary for large clients.
Business Plan 2013
11
2. Financial Management
2.1. Introduction As the business will be starting as a sole trader operation working from a home office, there will be minimal overheads initially. It is intended to grow the business naturally, without borrowing capital, expanding premises and workforce as and when the need arises. An initial amount of £10,000 will be invested by Fellipe Barros personally for marketing purposes and also to cover expenses that need to be paid up front (board-band, phone, outsourcing extra design / development personnel, stock / commissioned photography, couriers, printing samples, etc.).
2.2. Financial information Total start up costs
£
Company registration
2,000
Premisses/legal expenditure
1,000
Stationery and promotional material
500
Web hosting and domain (per annum)
120
Office Suppliers (one year supply)
1,000
Account cost
1,000
Total £3140
2.3. Financial projections 2.3.1. Estimated fee income: £ Year 1
£40,000
Year 2
£50,000
Year 3
£60,000
2.3.2. Annual gross profit Projected sales – full year 13/14
£ 40,000
Less direct costs Labour costs (photographers, developers, etc.)
£10,000
Total direct costs
£10,000
Gross profit
£30,000
Gross profit margin %
60,00%
Business Plan 2013
12
2.3.3. Annual projected overheads Indirect costs
£
Web hosting and domain (per annum)
120
Rent (50% of home rent)
5,000
Rates (included in rent)
0
Power, light heat (included in rent)
0
Telephone and broadband (per annum - Virgin Media)
588
Office supplies (one year supply)
800
Transport/taxis 500 Marketing: lunches, promotion
500
Telephone, postage (includes mobile costs)
1,000
Professional fees (accountant, lawyer)
1,000
VAT (20% of 40K)
8,000
Bank charges
-
Sundry/other 2000 Total overheads £19,508 2.3.3. Annual turnover to break-even
32,513
Overheads
£ 19,508
divide by gross profit margin
60,00%
2.3.4. Monthly turnover to break-even
£2,709
2.3.5. Estimated annual profit/break-even Projected annual sales
£40,000
Less break-even sales (£ 32,513 )
£19,708
x 60.00% (gross profit margin) = Profit
£20,292
2.4. Financial requirements Loan applications None planned
Business Plan 2013
13
3. Notes to Financial information
3.1. Income Income is derived from consultancy and design fees and rechargeable expenses - outside supplier costs (printing, photography copywriting etc.), which carry a 20% mark up on the net (supplier’s) invoice. Rechargeable expenses are regarded as a bonus or supplement to fees and have not been forecasted for year 1. Invoicing would normally be arranged as follow: invoice 50% upfront of whole project (small) 50% on completion, or of 50% of project stage inception and completion for each stage (larger) to help even out cash flow. Income projections are based on 3/4 clients first year, maintaining a steady 6 main clients in years 2 and 3. In addition, a projection of an additional 20% of the income will be acquired by selling products in the online store.
3.2. Fees/calculation Fees are calculated on a rate of £280 per day based on an hourly rate of £35 per hour. Fast track work and overtime beyond the hours of 9am to 6pm will be charged at a premium rate of £55 per hour.
Business Plan 2013
14