A year after graduating, Ben Freeman started a print-publishing business with Lynsey Atkin, a friend and fellow graphic designer. Here, he describes the process.
Ditto Press is a print, publishing and design company that Lynsey and I set up in 2009. We had both worked as graphic designers previously, but also had an interest in publishing. Our idea was to combine these practices and offer a service to people in a similar position to ourselves with small-run printing requirements.
We discussed the idea for the first time in March 2009. Neither of us had any real experience of running a business, and we were naïve about what was required. Our initial thought was that we would need equipment and premises to work from. We would need to raise the funds to secure both of these, and develop an organised way of working to allow us to develop the business, keep track of finances and see what was working and what was not. With this in mind, we embarked on the process. It took considerably longer than expected.
Our first move was to look for a studio. With hindsight, this was premature. Ten minutes after we moved in, the old tenants turned up to collect their post and told us that the place was managed by some East End gangsters who did not have the legal right to let it to us. The next day, scaffolding went up. The internet did not work. Sensing that this might not be the ideal location for a fledgling enterprise, we reclaimed our deposit and moved out.
Working from home and nursing slightly damaged pride, we bought a few books about business plans and running small enterprises. It was clear that we would need to raise funds from external sources if we wanted to get the business going. A friend recommended HBV Enterprise. We arranged a meeting and they told us to bring our business plan. At that point, it was a brief outline of our goals, perhaps a few hundred words in total. They said that they could potentially fund us if we applied to their loans panel with a coherent strategy outline. This meant doing cash flow projections, serious market research and a much deeper analysis of our proposed business model.
At this point we split the work. Lynsey wrote the copy and I dealt with the figures, which suited our aptitudes. In other areas, such as doing market research, we worked together. I found the process of estimating turnover and developing pricing strategy particularly challenging. When I first saw a full cash flow projection I nearly had a heart attack, but by starting with the basics and working up, it all came together. The important thing seemed to be that we could show HBV that we either knew what we were talking about or were willing and able to learn. Our advisor saw us on several occasions and provided very useful feedback each time. The plan had grown to 41 pages by the time we applied for funding.
This was directly in the middle of the global financial crisis, so banks were unwilling to lend money to new businesses without 100 per cent matching of capital, which we were unable to provide. Their interest rates were also unattractive, so we applied through HBV. They also required some capital, but as we had some saved to invest, this was covered. They asked that we draft a shareholders’ agreement. Although the agreement we signed is fairly basic, it is legally tight and protects us both in the event that we have a major disagreement. For example, it states that we need to agree on all expenditure over £50 and that we will seek arbitration to resolve disputes.
Neither of us were willing or able to manage our accounts, so we asked our friends for a recommendation. Our first accountant set up our limited company and registered us for VAT. We did this as we use a lot of consumables, and most of our print work is not VAT rated. Effectively, we had to weigh up the benefits (not paying VAT) against the drawbacks (quarterly VAT returns, charging VAT) and decided that in our case it was worthwhile. At some point in the future our turnover will dictate that we are legally required to be VAT registered anyway, so we thought it was easiest to get this out of the way at the start.
In September 2009, six months after starting work on the business, we got funding. After moving to premises in Dalston, we spent the next two months sourcing equipment. Our limited budget meant that this was a case of trial and error. A lot of our machines had to be fixed, and some were harder to use than anticipated. As a result, some aspects of our finishing and binding are now outsourced. While this went against our original plan to produce everything in-house, we were happy to evolve. The business only runs smoothly when we adapt and compromise.
We have got all our work so far through online social networking and our group of friends and acquaintances. We are planning several publicity pushes, including competitions in colleges and articles in the design press through existing contacts. Our publishing arm now has four books in production, and this will have a knock-on effect for promotion of the print side of the business. We have enough work for now, and there would be no sense in over-promoting ourselves as we would not be able to handle a massive leap in workload. Our plan is to grow slowly and steadily, and this is working so far.