1. Bell Pottinger Design
Introduction
Since the MBO of Bell Pottinger Private and the fact that Rare remains within Chime plc, the new
group now lacks in-house design capability. Members of the team at Rare Corporate Design have
been working for divisions of Bell Pottinger for a number of years but the level of work has increased
significantly in the last nine months, first as the result of maternity cover at Pelham and then the win
of Kraft at Business & Brand. In addition, the team maintain the three websites under the
Paramount Group account and work on a number of other online projects for Sans Frontieres,
Consumer and Public Affairs.
The team also has its own clients who either came over as clients of Vertigo Design or have been
established by Matthew Gould. A full list of these can be found in Appendix 1.
In the last six months, the team has generated a profit of £80,000 excluding operational costs.
Proposal
In response to the current situation, this document proposes the formation of Bell Pottinger Design
(BPD), a division within BPP, which will provide design services to:
1. BPP for its own collateral and pitches
The team currently undertake design of group collateral including stationary, signage,
invitations and banners. Design and artworking is also undertaken for pitches and this can
involve anything from a PowerPoint template through to graphics and booklets as well as
bespoke folder packs including the above and specific documentation.
2. BPP’s clients
As well as Paramount Group, the team currently work for a number of group clients either
directly or indirectly. These include the Guide to Snacking website for Kraft, a promtional
document for Fortnum & Mason and personalised Weetabix boxes.
3. Own clients
The team currently manages a number of external clients and these include London Speaker
Bureau, Fleming Family & Partners, Insparo AM and Milio. Projects range from leaflets and
brochures through to website management and online marketing. The team has also
referred clients to Bell Pottinger, including the Prime Minister of Malaysia’s visit to London
in 2011 (Business & Brand) and Cirrus Inns (Consumer).
4. Chime
In addition to the above, the team has built long-standing relationships with Chime
companies, including Good Relations, Harvard and Corporate Citizenship. It is expected that
these companies will continue to utilise BPD’s services for collateral and pitches. BPD would
also look to reach an arrangement with Rare over its existing online clients (including Chime
and Qatar Gas).
It is anticipated that divisions of Bell Pottinger Private and Chime will be charged £50 per hour,
client work will be charged at £80 per hour or on a project basis.
2. Services
The following services will initially be offered by BPD:
Advertising
Annual Reports
Artworking
Branding
Brochures
Direct Marketing
Exhibition design
Graphic design
Online applications
Online marketing
Search engine optimisation
Website development
Scalability and suppliers
BPD will be launched with a small, flexible and scalable team, comprising Charlie Wigan (project
management), Matthew Gould (creative) and Dimitry Volos (digital developer and artworker). The
creative industry is based around freelancers and this will allow BPD to recruit additional resources
when the level of work requires. This would also be applicable to certain projects that require a
particular skillset or technical knowledge. It is anticipated that these freelancers will form the basis
of a ‘bank’ from which permanent staff could then be recruited. This will ensure that costs will be
kept down from the outset and ensure that additional staff have the required skills as well as being
able to work to the standards required by BPP.
BPD would continue to build relationships with outside suppliers, particularly in terms of production
when different capabilities are required in terms of cost, deadlines and quality. Once again, a ‘bank’
of production companies would be formed to ensure that clients receive the best possible solution
to their requirements.
Operations
It is anticipated that BPD will launch with the initial team of three plus one freelancer and an
additional workstation would be required to ensure capacity. BPD has negotiated the rental of 3
Macs from an existing supplier, a PC would be required along with the Pelham Mac for the spare
workstation. Three Blackberries would also be required and BPD would expect to pay the associated
costs of being a division within BPD.
Services
BPD’s services will include:
3. Presentation design – e.g. master templates can be created for each of the group companies
and added to the intranet to ensure consistency across BPP pitches.
Graphic design – graphics for use in presentations or client reports, as well as one-offs for
use in BPP pitches.
Print design – brochures can be designed and artworked for use in pitches or to market the
group.
Event collateral – this will include invitations (printed or emailable), menus, event marketing
materials and exhibition design.
Print Management – the majority of printing is currently carried out by Moore Printing. BPD
would seek to agree on a preferential rate with Moore for group work.
Branding – this will include a full branding service including logo design, typography,
corporate guidelines and stationary.
Website design – although Bell Pottinger Digital also provide this service, it is anticipated
that BPD will focus on corporate website design, whereas Bell Pottinger Digital will focus on
social media.
Website marketing – as above, the company will offer corporate online marketing services
based around newsletters.
Budget / Financials
BPD would seek to migrate the principals’ retained clients from Rare, including Paramount Group
(£24,000 pa) and Chime (£20,000 pa). BPD would also look to retain their own clients, including
London Speaker Bureau, Fleming Family & Partners, Xenon, Milio, Insparo and CQS. For a full list of
current clients, please refer to Appendix 1.
Based on year-to-date volumes of the proposed team members, BPD could expect a Year 1 turnover
of £372,000. However, with the new company structure, BPD would expect increased revenue from
both internal clients (majority of current work comes from Pelham, Business & Brand and Sans
Frontieres) and referred clients. Therefore, we estimate a first-year turnover of £440,000.
The charge out rate to group clients will be £50 per hour and the current budget allows for 500
hours per month. Existing client work will either be based on current hourly rates (£60 to £80 per
hour) or based on project budgets. New work will be charged at £80 to £100 per hour or based on
project budgets.
BPD will be financed via a retainer from of £20,000 from BPP (based on 400 hours), the Paramount
retainer of £2,000 per month and the Chime website contract (£5,000 per quarter).
Timing
It is anticipated that BPD will be launched on 1st January 2013.
Conclusion
4. The proposed team members have been working on Bell Pottinger projects consistently for the last
six months and BPD will be able to fulfil BPP’s design requirements based on the parameters
mentioned in this proposal. BPD will be scalable and thus if a project requires a specialist skill or
additional personnel, it will be possible to source this from the freelance bank and charge this as
required.
Finally, we expect BPD to make a significant profit margin in addition to providing BPP with an
added-value service that will enhance pitches and presentations as well as being offered to clients to
compliment the core services of the group.
5. As a result of the initial conversation with BPP, the following options have been identified:
Option 1
Set-up
BPD would be established as a division of BPP and would consist of Charlie Wigan, Matthew Gould
and Dimitry Volos with one freelancer and additional support as required. BPD would sit within BPP
and pay all operating costs for a total of 5 desks.
Company structure
BPP - 70%
Charlie Wigan - 15%
Matthew Gould - 10%
Dimitry Volos 5%
Income
Pelham Bell Pottinger - £60,000
Business & Brand - £60,000
Sans Frontieres - £60,000
Other group - £60,000
Group clients - £80,000
External clients - £80,000
Chime clients - £40,000
Total - £440,000
Renumeration
Charlie Wigan - £60,000 per annum
Matthew Gould - £50,000
Dimitry Volos - £30,000
Associated costs - £25,000
Total - £165,000
Freelance - £40,000
Operating costs
Property - £37,200
Equipment - £6,000
Professional - £6,000
Other - £10,000
Recharges - £27,600
Total - £86,800
6. Total costs - £291,800
Total profit - £148,200
Profit margin – 33.7%
If BPD hit this target, 30% of the net profit (£44,460) will be paid to the team in quarterly bonuses
(£11,115).
Adjusted profit - £103,740
Adjusted profit margin - 23.6%
If the target is exceeded by £100,000 or more, 40% of the profit beyond £100,000 will be paid to the
team in quarterly bonuses.
Option 2
Set-up
BPD would be established as a division of BPP and would consist of Charlie Wigan, Matthew Gould
and Dimitry Volos with freelance support as required.
Company structure
BPP - 100%
Income
Pelham Bell Pottinger - £60,000
Business & Brand - £60,000
Sans Frontieres - £60,000
Other group - £60,000
Group clients - £80,000
External clients - £80,000
Chime clients - £40,000
Total - £440,000
Renumeration
Charlie Wigan - £70,000 per annum
Matthew Gould - £60,000
Dimitry Volos - £35,000
Associated costs - £30,000
Total - £195,000
Freelance - £40,000
Operating costs
7. Property - £37,200
Equipment - £6,000
Professional - £6,000
Other - £10,000
Recharges - £27,600
Total - £86,800
Total costs - £321,800
Total profit - £118,200
Profit margin – 26.9%
If the target is exceeded by up to £100,000, 25% of the net profit will be paid to the team in
quarterly bonuses. If the target is exceeded by £100,000, 40% of the profit beyond £100,000 will be
paid to the team in quarterly bonuses.
Option 3
Set-up
BPD would be established as a freelance division of BPP and would consist of Charlie Wigan,
Matthew Gould and Dimitry Volos with support as required.
Company structure
BPP - 51%
Charlie Wigan - 24%
Matthew Gould - 15%
Dimitry Volos 10%
Income
Pelham Bell Pottinger - £60,000
Business & Brand - £60,000
Sans Frontieres - £60,000
Other group - £60,000
Group clients - £80,000
External clients - £80,000
Chime clients - £40,000
Total - £440,000
Operating costs (£86,800) would be paid by BPP, which would then be repaid by BPD at the end of
the year. In addition, BPD would pay a £80,000 per annum dividend to BPP in recognition of the 51%
shareholding.
