Makers at Cockpit are defying the durnturn!
By Ellen O’Hara
Every year, makers at Cockpit complete a business review, which is designed to help them reflect on the previous year and plan ahead, both creatively and commercially. We then pool all of this information together to provide us with a snapshot of what the trends are among makers at Cockpit, what challenges they are facing and what opportunities they are exploiting. All of the findings are then compiled into a report which we share with the public every two years. Here are a few of the key findings from last year’s report, which just went public:
On the whole, businesses at Cockpit Arts are defying the downturn, bucking the national trend. Specifically:
- Two thirds (65%) of Cockpit businesses reported growth in turnover in 2010 and this increased to 70% in 2011.
- Similarly, half (51%) of Cockpit businesses reported an increase in profits in 2010 and this also increased to two thirds (66%) in 2011.
- Furthermore, average turnover at Cockpit is 30% higher than the national average at £30,640 compared with £23,485.
- Similarly average profits reported by designer-makers at Cockpit are 70% higher than the national average at £10,714 in 2011 compared with £6,231.
So how are makers at Cockpit achieving their success? Our research shows us that different makers are in fact employing different strategies, a combination of:
- Diversifying their income streams to spread risk,
- Reaching new online and overseas markets,
- Streamlining production and outsourcing, so that they spend their time on the areas where they create the most value.
Leading the field in terms of overall financial performance are jewellers, printed textile makers and silversmiths. In terms of income streams, on average:
- 83% of income is derived from the sale of craft objects, with wholesale orders and sale or return sales comprising the largest proportion at 29%.
- 23% of income is derived from retail crafts fairs and shows, 13% from commissions, 10% from the Cockpit Open Studios and 8% from online sales.
- 68% of the makers at Cockpit have another source of income in addition to sales of craft products, despite the fact that only 37% work on their craft practice part time.
In terms of reaching new markets:
- Makers selling to the gift, fashion and craft markets tend to have higher turnover and profit compared with those selling to the interiors, fine art and public art markets.
- The proportion of businesses at Cockpit Arts exporting has been consistently high, rising again in 2011 to 57% compared to just 30% of makers nationally. Those that export also tend to report higher turnover then those that do not.
- Online selling has increased from 22% to 36% in the last year alone.
In recent years, we’ve been wokring with manufacturing consultants to help makers at Cockpit find ways to streamline production and other studio operations:
- Use of PAYE employees remains rare, having shifted from 2% in 2009, to 7% in 2011.
- But outsourcing is common and is shown to have a positive impact on financial performance. In 2011, 47% of business outsourced some aspect of production, usually to other skilled makers.
- Use of digital technology in business has also increased and is now used for financial planning, marketing and selling, as well as for designing and making.
- Makers who spend more time on design development tend to generate higher turnover.
Benefitting from the incubation package that Cockpit provides is also making a difference. For instance:
- The percentage of businesses at Cockpit with strategic business plans has increased to 70% in 2011 from 63% in 2010, 61% in 2009 and just 13% in 2007. Having a marketing plan is shown to have the greatest correlation with turnover in the short term (particularly for emerging makers), whereas having a more strategic business plan is shown to correlate with higher profits in the longer term.
- Open Studios visitors and sales are increasing every year. Visitor numbers for the Holborn Christmas Open Studios in 2011 reached a high of 3,702 (a 6% increase on the previous year) and a high of 2,749 for the Deptford event (a 33% increase on the previous year). Average sales per maker were estimated at just under £2,500 over a weekend.
So all in all we are feeling optimistic about the year ahead! The full report can be found on our website and we’d be really keen to hear your perspective on how makers defying the downturn!
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