With our support, designer-makers’ profits at Cockpit Arts have increased year-on-year at an average of 28% (above the rate of inflation) since we introduced the incubation model in 2005.
In 2011 we were able to compare our results with nationwide Crafts Council research which indicated that average profits of our designer-makers was 70% higher than comparable UK businesses.
Our Business Growth Loan Fund (now the Cockpit Arts and Ingenious Loan Fund) has a zero default rate and participants report an average increase in profits of 75%. The majority of participants are forecast to at least double their profit over three years with some already experiencing increases of over 100% within two years.
The Social Return on Investment study of our pilot Business Growth Loan Fund programme demonstrates that for every £1 we invest, we produce £3.36 in outcome. This is added social and economic value, including fostering entrepreneurship, confidence and motivation.
Our Creative Careers programme provides previously unemployed young people with a gateway to a professional career in craft and design. 82% of participants have gained employment or self-employment. Following the year 1 pilot, years 2 and 3 have resulted in 100% success rate.
The Cockpit Effect Report 2012
At Cockpit Arts we nurture micro craft businesses using skills which are at the heart of our creative industries and cultural heritage, helping them to grow. Our latest report indicates that average profits reported by makers at our incubators are now almost double the national average. Nearly three quarters (74%) of Cockpit makers reported growth in turnover in 2012 and two thirds (62%) reported an increase in profits, both up on the previous year. This means that designer-makers profits at Cockpit Arts have increased year-on-year at an average of 28% (above the rate of inflation) since we started measuring in 2005, furthermore business confidence at Cockpit is high with 82% of businesses predicting an increase in turnover this year, and 62% an increase in profits.
Crucially, as a Social Enterprise, the craft-business growth we help to stimulate is also a vehicle for wider social, cultural and economic change – preserving craft skills, nurturing talent and creating employment opportunities for young people. The Cockpit Effect 2012 Report provides in depth analysis on data collated through annual business reviews as well as a Foreword, reviewing findings in the context of our role as a Social Enterprise.
Commission income rose from 13% to 29% and online sales increased from an average of 8% to 22%.
Income generated from wholesale orders and sale-or-return dropped from an average of 29% to just 18%.
Income from retail craft fairs also fell from 23% to an average of just 6%.
Use of PAYE employees remains low but has increased to 8% and is shown to be a key driver for growth.
Digital technology in business has increased in financial planning (up to 50%), e-marketing (up to 53%) and e-commerce (up to 33%).
Craft business take between 3 and 10 years to reach maturity and move through our ‘incubation journey’ in different ways.
We have identified 7 key craft business models at Cockpit Arts.
Cockpit Arts’ Creative Careers Programme is delivered in partnership with The Prince’s Trust and is the only programme offering young people not in education, employment or training a practical route to self-employment as a craft business owner.
Over the past three years 17 previously unemployed young people have been provided with 12 months intensive support including craft skill and design development, as a gateway to a professional career in craft and design.
14 of the 17 have gained employment or self-employment.
Following the year 1 pilot, years 2 and the current year 3 have resulted in 100% success rate in self-employment.
We are aiming to increase the number of participants on the programme as well as referrals from partners operating in our local areas, including our local Further Education College, Westminster Kingsway College, in addition to The Prince’s Trust.
In 2012 we collaborated with Pro Bono Economics to measure the impact of incubation using econometrics. Their report, available to download here, explores topical issues relating to impact measurement likely to be of wider relevance to both business incubators and social enterprises. Whilst much of the impact that Cockpit has achieved so far is focussed on a relatively small number of ‘beneficiaries’ we have a wider goal to influence ‘group behaviour’ as well as the creative industries network. We consider that both are critical factors in supporting sustainable social, cultural and economic benefits.
Business Growth Loan Scheme
Between 2006 and 2010 Cockpit Arts piloted a Business Growth Loan Scheme, supported by the Esmée Fairbairn Foundation. The scheme provided a combination of low interest loans and tailored one to one business development support to studio holders at Cockpit Arts. The aim of the pilot project was to test the impact of small loans and intensive one to one coaching on the growth and sustainability of craft businesses.
The scheme has been highly successful and has a zero bad debt record.
Furthermore, loan recipients have reported an average increase in turnover of 28%, and an average increase in profits of 75%.
An independent Social Return on Investment study was conducted in 2010 to measure the wider impact of the scheme and estimates that for every £1 invested in the BGLS there is value in the range of £2.01 to £3.36 created.
The full SROI report and calculations are available to download here.
A new Growth Loan Fund has now been launched by Cockpit Arts in partnership with Ingenious, an investment and advisory group renowned for their work in Media & Entertainment. The Cockpit Arts & Ingenious Growth Loan Fund will provide low interest loans, coupled with intensive one to one business support to studio holders. Loans of up to £10,000 can be accessed to support developments such as improved production processes, new routes to market and taking on staff. In each case, the loans support the owner-manager to create a more sustainable business, capable of economies of scale and increased profits as the business continues to grow and develop.
Business Review Report Archive
Our past research papers are available to download here. For a full copy of these reports or to find out more about our research work please email firstname.lastname@example.org. We plan to continue research over the long term and welcome comment, feedback or collaborations from other individuals and organisations in the field.