Ellen O’Hara - Head of Bussiness development, Cockpit Arts
Ellen O’Hara holds a degree in Economics and Econometrics from the University of Birmingham and a postgraduate diploma in administrative management.
She joined Cockpit Arts in 2006 where she is responsible for the design of the business development strand of the incubation offer. She leads Cockpit Arts' research projects which have a focus on craft business models and the impact of incubation on growth.
Ellen previously worked for The Princes Trust, Arts Council England and Andersen management consultancy. She sits on the Board of Directors for CreativePeop!e, a national network of professional development providers, This is Not a Gateway, an organisation that facilitates the production and exchange of current thinking and research in urbanism, and You Make It a social enterprise supporting young people into employment.
Cockpit Arts
Cockpit Arts is a social enterprise and the UK’s only creative-business incubator for designer-makers. They work with both new and established businesses aiming to increase profitability without compromising on creativity, nurturing 165 designer-makers across two incubator sites in London. The incubation package is proven to support growth, and supported by robust research and impact measurement, making Cockpit a leader in its field. Their mission is to support and promote talented designer-makers from all backgrounds through all stages of their career. They strive to raise standards in the contemporary craft and design sectors, making an important contribution to the UK cultural landscape and economy.
1. Making It Happen: Incubation, Clustering & Business Development 2 nd Russian-British Creative Economy Forum Ellen O’Hara, Head of Business Development Award winning creative business incubator for designer-makers
14. Impact - Thornback & Peel 2006 2011 Completed start up course Growth Loan 1 Mentoring from Deutsche Bank Growth Loan 2 One to one coaching One to one coaching Growth Loan 3 Doubled turnover and profit year on year, 3 employees 5 year exit plan
Cockpit began as an artist led cooperative seeking to provide affordable work space for craftspeople in London. In 1986 a group then named Camden Recycling identified the empty buildings at Cockpit Yard, which is owned by Camden Council, the local authority. 5 small ‘starter’ units for young unemployed people starting up a craft business were established and Cockpit was born. Two years later the group expanded into available empty space within the building creating a community of 20 workshops under the banner of Cockpit Studios. In 1993 the organisation became formally incorporated as Cockpit Arts and became a registered charity. By 2000, the organisation had expanded into a hub of 100 designer-makers and we are still based at Cockpit Yard today. In 2002 we acquired a second site at Deptford south east London, which we own, accommodating a further 65 designer-makers. A programme of professional development activity was trialled in 2004 and the business incubation model was introduced from 2005.
We currently house over 160 micro craft businesses in a range of disciplines including jewellery, ceramics, glass, furniture and textiles .
So what do we offer? Our mission is to: Support and promote talented designer-makers from all backgrounds through all stages of their career. We strive to raise standards in the contemporary craft and design sectors, making an important contribution to the UK cultural landscape and economy. And we do this through the provision of space, business development and marketing & sales services.
In terms of space, we provide affordable, managed workspace, the features being: We do not provide equipment, but the studios themselves provide all the necessary elements for the different craft disciplines such as reinforced floors, three phase electricity, water and plenty of natural light. Why? So why have we developed this approach to supporting designer-maker businesses and why does it work? In terms of space, there is an identified need for affordable, fit for purpose space for both start ups and more established businesses within London and across the UK. Elements such as 24 hour access are important because it responds directly to the fluid and flexible approach to work that designer-makers, and many creative entrepreneurs take. Wifi is critical as more and more businesses rely on the internet for all aspects of their business. And the flexible license agreement is also appealing.
What sets us apart from other managed workspace for artists or crafts businesses are the additional services we provide and our specific approach to incubation. We take a person centred, tailored approach and the business support has a focus on one to one business development coaching. The incubation process begins with the selection process which assesses: craft skill and innovation, commitment to business growth and creative development, financial security, environmental policy, what contribution they make to the community. Once settled into a studio, successful applicants continue their journey with an in-depth diagnostic to identify personal and business development needs, which leads to the creation of an individual development action plan . We provide a business development toolkit full of interactive worksheets that support each business to create business goals, marketing strategy and financial plan. And our team of in-house business development coaches then work closely with each individual on a one to one basis to implement their plans. We conduct a formal business review on an annual basis with each business. The business review process doubles as a mechanism for collating key performance indicators on each business which helps to map growth trajectories, spot trends and highlight future development needs.
We know that low levels of profit are common in the craft sector and in more established businesses this indicates issues relating to competitiveness, pricing and productivity and many businesses struggle to achieve economies of scale. Low levels of financial literacy and strategic planning skills are also common. Our experience tells us that business survival and growth depends on the capacity of the business owner-manager to develop strong managerial competencies in order that they can overcome these barriers, exploit their creativity in the most effective, sustainable and profitable way. And this need is best met via coaching because it’s tailored, relevant at every stage of growth.
Continuing with business development services, we run business skills workshops on topics such as operations, marketing and sales, finances, which are all designed to be practical, interactive, allowing time for exchange between participants, and reflection. Plus a seminar programme that tackles more topical issues such as the role of new technologies in craft production, which is linked to a blog called ‘Making It’. We offer access to low interest loans for more established businesses, coupled with intensive support to develop and implement a growth plan. Finally, we sign post to our network of associates that have expertise in areas such as accounting, IP and manufacturing. Why? The need for affordable access to finance is particular important because poor profitability, limited scalability and highly seasonal sales are key features of businesses in this sector which can make it difficult for them to access development and working capital from conventional sources. This can prevent a business responding to existing demand or investing in technologies to improve efficiency and capacity, further hindering sustainability and growth. Use of industry networks are crucial in terms of supplying credible, informed and specific information, advice and guidance.
The key marketing & sales services are: Twice yearly Open Studios event, attracting nearly 6,500 visitors over a weekend and generating average sales of £2,500 per business Promotion and profile raising via an online business directory Central press and pr liaison Curated tours of the building and introductions to press and buyers Showcase projects such as Created @ Cockpit which provided 12 makers with a concession at the Southbank Centre Festival Terrace shop for a year. Why? When we ask our studio holders which areas of business they require the most support with, Press and PR and Sales always score very highly. For start ups, the Open Studios and related activity not only provides much needed profile raising, but the opportunity to test trade and build an initial customer base. For the more established businesses, the income generated from these events can cover the cost of the incubation package for a whole year.
And finally, supporting this is a wellbeing programme which includes: A programme of discounted yoga, massage and acupuncture sessions, delivered on-site. A diary of social events to support the development of an active community. Why? Craft practice by its very nature is physical and working in some disciplines over long periods, such as ceramics, can exert quite a physical strain. We believe in a holistic approach to supporting creative entrepreneurs and so supporting healthy minds and bodies is just as important as any other element and particular relevant to this sub sector of the creative industries.
In addition, the building is configured so that the majority of studios are shared (with some single occupancy) with communal spaces such as kitchens around the building to encourage interaction. The key benefit of working in this type of environment as well as being affordable, flexible and fit for purpose is the access to a ready made community of creative professionals. In fact when we ask our studio holders what they value the most about being at Cockpit, ‘Access to a creative community’ features at the top of the list. And I’ll come back to why this so important later in the presentation. We facilitate peer support through a range of mechanisms including action learning groups, skills exchanges and peer mentoring. Why? The craft sector, like many other sub sectors of the creative industries is made of many micro businesses. In these contexts, local, high-trust and often personalised networks are common and therefore a mechanism for business innovation and growth in a number of different ways. Clustering in this way brings tangible business benefits through the sharing of equipment, contacts and work, as well as reducing isolation, providing a support network, opportunities for collaboration and peer critique. Furthermore there is a symbiotic relationship between the Cockpit and the community we support, with open channels for communication, feedback and review between the two. Like ecology, they simultaneously create community and economy and we’ll also see this feature in the other examples later on that I highlight.
This data provides evidence of the continuously improving financial performance of craft businesses at Cockpit Arts: Businesses have reported average growth in profits of 25% per year, year on year since 2005. Average turnover (including part time businesses) is approx £30k, ranging from as low as £5k to a high of £500K. Average profit (including part time businesses) is approx £10k, ranging from as low as zero to a high of £120K. On average it takes five years for a craft business to become sustainable. Precious jewellery and printed textiles businesses lead the field in terms of financial performance. Key drivers for growth include market diversification beyond the UK contemporary craft market, successfully outsourcing manufacture and licensing designs.
So how do we do it? What’s the business model? We are a social enterprise which means surpluses are ploughed back into the business to support our mission. We lease one building from Camden at favourable rates and made the decision to buy the site in Deptford to provide security of tenure. We have a mortgage on the Deptford site which significantly increased our overheads and so there was a need to change the business model. So one of the reasons for introducing the incubation model in the first instance was to support our studio holders to grow, in order that they could ‘pay more, more quickly’ and support a more sustainable business model for the organisation. Between 2005 and 2011 we’ve used public funds and grants from charitable foundations to invest in the development of the incubation model, to test different approaches and to build capacity within the organisation. And I’m pleased to say it’s been a great success. Our research shows that our studios holders report average growth in profits of 25% per year, year on year since we began collecting data in 2005. This means we’ve been able to increase the studio fees year on year to close the funding gap from 40% of our operating budget to just 7%. We also currently generate income through venue hire and consultancy, are set to break even this year and generate surpluses in 2013. We are not reliant on state funds or support to close the funding gap or pilot new ideas. Instead we work in partnership with several private sector partners that include banks, retailers and a creative industry investment fund. Having said that, we enjoy a positive relationship with both local authorities because there is a good fit between our activity and the strategic plans for economic development in both areas. And crucially we can provide evidence of the impact that we make in both economic and social terms, which will stand us in good stead for the future.
Part creative community, part arts venue, Village Underground is a non-profit space for creativity and culture in the heart of East London. The main centre is housed in a renovated turn-of-the-century warehouse primed for concerts, club nights, exhibitions, theatre, live art and other performances. High above street level, atop the venue, four recycled train carriages and shipping containers make up the creative studios that accommodate up to 50 creative entrepreneurs, working side-by-side in a creative community. In addition to being a cultural centre, Village Underground is an ecological project. All studios are virtually carbon neutral, powered by solar panels, generating enough energy to run all of the lighting and office equipment. The core offer to creative entrepreneurs is subsidised space - studio space to work and produce and the venue space show and sell. The community at Village Underground is active and produces high quality work, ensuring all the usual benefits of clustering and community contribution. It was born of the need for affordable, environmentally stable studio space for artists in central London. Founder, negotiated with Hackney Council who owned the derelict buildings, to take them over and redevelopment them. The main renovations took place over the course of a year, in time for the opening April 2007. To rebuild the site, loan funds were raised from a number of social enterprise and community development finance initiatives, including some public funds. The main source of income now the hire of the space for commercial performing and visual arts which in turn subsidises the studio space and the use of the venue by the resident creatives. It now therefore operates as a self sustaining cultural organisation and social enterprise.
THECUBE provides flexible co-working space in Shoreditch East London, with the aim of creating a psychical space that would nourish and house ‘would-be- entrepreneurs’. Describing itself as a place for ‘change and innovation’, THECUBE is a collaborative, diverse, and energetic community of entrepreneurs and innovators, not restricted solely to creative entrepreneurs. The community shares skills, resources, and intelligence to collectively problem solve and launch new businesses. The physical space is neurochemically and physiological primed to generate productivity, cognitive thought and collaboration. An initial ‘innovation consultation’ is provided to each member with a focus on the neurology of idea generation. Informal support and introductions to other ‘Cubers’ are also provided. The offer is designed to reflect founders view on the core values and behaviours of today’s entrepreneurs as innovators, outliers, and highly curious thinkers. The focus on neurology and the links between this, idea generation and entrepreneurship reflect the research interests of the founders who are continuously testing their own unique approaches to supporting creative, and other, entrepreneurs. THECUBE is funded entirely by private investment, leases it’s building from private landlords and generates income from membership fees and consultancy. It’s rapidly attracting interest from private sector companies who align themselves with the same values.
A socially minded organisation offering exhibition, performance and studio space for the development of creative enterprises. It provides affordable studio space, access to a diverse, active creative community, opportunities for collaboration, PR and profile raising support via the gallery and selling events, an informal advice and guidance on how to get positively involved in the opportunities that are emerging as a result of the Olympics. Placed on the River Lea, Stour Space has a privileged position as one of the closest public buildings overlooking the main Olympic stadium. With its unique location, and support from a vibrant local community Stour Space has become a hub for collaboration, artistic practice, trade, education, and community involvement. It houses 43 creative entrepreneurs, a gallery space and café, plus function rooms that house both educational and corporate events. Founded by a two artists looking for affordable space to work, Stour was established four years ago within a commercial unit in Fish Island, arguably London’s most creative hotspot. The size of the building is the optimum size for creating economies of scale on the one hand, but small enough to create an active community on the other. Another social enterprise, the studios are subsidised by both corporate hire activity, lease of the café space and more recently consultancy. Stour is in fact the only community led public space on the Olympic Development site and so acts as a central hub for the entire community. Although they are not in receipt of state support, Stour have positioned themselves as a key player in the area and are a key partner in the Fish Island Action Plan consultations and implementations.
Do creative entrepreneurs have distinctive needs? Yes and No! Designer-makers in fact face many of the same barriers to development and growth as other micro-businesses, so in that sense the needs are the same. Networks and clustering are particularly beneficial due to the micro-business nature. There is no lack of creative vision and ambitions, but this isn’t always translated to commercial ambition due to low levels of confidence and awareness of business potential. In addition, graduates tend to leave higher education with little knowledge of their market, who the different agents are and what their business potential is so there is a need for market information. But in terms of responding to these needs, one size does not fit all. And what our clients to do bring are excellent research and problem solving skills, energy, passion and commitment. So we make the case for a tailored approach, using incubation with an orientation towards growth of the owner-manager, within the environment of a creative community.
It’s also important to remember that the creative economy is diverse and fast moving and so where possible services should be designed and delivered with or by industry professionals to keep it relevant and credible. Perhaps as important as understanding specific business support needs, is the need to understand the motivations that driving creative people and entrepreneurs as this will affect their perspective business, work and money in general. We find that community, contribution and social aims are often as important as creative aspirations and financial goals and this should be represented in the approach that one takes to delivering business development support, especially business modelling. We also need to be aware of learning styles and how our clients receive and process information. Studio holders at Cockpit tend to be visual, active, global learners. Furthermore a relatively high percentage are dyslexic. And so services need to be designed and delivered with this in mind in order to be effective.
The fact ‘one size does not fit all’ can be problematic in terms of allocating resources efficiently and at first glance one might prefer a more homogenous approach. If public funds are to be used, it’s important to consider what the returns are and how will they be measured. The models I have presented rely on citizen initiative and active communities which can be challenging to create. They need to bring together people who share the same values and vision. On a more practical note, smaller buildings tend to facilitate a more active community. But this may not create the economies scale needed to make the businesses financially sustainable. Similarly, fees have to remain below market rate in order to meet the need for affordable space and so any shortfall in operating budget needs to be met through earned income, or longer term subsidy. ‘ But I’m not a business’! Culturally, creative entrepreneurs may not perceive themselves as businesses and so a shift in mindset may be required.
Which brings me finally to the role that the state could play in supporting creative entrepreneurs. The approach of public funding in the UK has historically been to intervene in the case of market failure. However I would argue that this should also bear longer term sustainability in mind. Although one of the examples I mentioned was entirely privately supported, state support has made a successful contribution with the other examples in a number of ways: Investing in organisational development / capacity building to ensure longer term sustainability and growth of intermediary / delivery organisation Funding for pilot project development rather than core activities where possible, favouring private/public partnerships. Supporting the use of (post industrial) spaces to provide both affordable space to create, show and sell but for development of community. And this can be done by negotiating preferential rates or lease arrangements on statement owned buildings, considering asset transfer of state building to those organisations with a track record in delivering statement aims, providing advice and guidance on making proposals to private landlords, Support with impact measurement. In the UK we have a project called Pro Bono economics which matches not for profit and charity organisations with economists to develop robust approaches to impact measurement in ways that are used and recognised by the state. In addition, the state could also play a positive role in terms of: Consultation and intelligence on the sector so that support organisations can benchmark and make informed choices. Advocacy both internally to galvanise creative entrepreneurs to get involved and externally to help export creative output. Infrastructure development to facilitate links between regional networks and organisations and the national networks and bodies for different sub sectors, for example links between Cockpit and the national development agency for the Crafts, the Crafts Council, which is a state funding body.
