Elmwood boss: ‘This is my life’s work. To just sell it for money seems sad’

AFTER 10 months of the kind of protracted negotiations associated with buying a business, Jonathan Sands finally put pen to paper to take control of Elmwood, the Yorkshire-based design agency.

He promptly sped off to his mother’s 50th birthday party. That was 25 years ago, almost to the day.

Sands was 29 at the time and taking quite a risk; he had remortgaged his home, arranged a £250,000 banking overdraft and secured another £250,000 in backing from the venture capitalist 3i to buy a business that was worth just £900 on paper.

A risk indeed. But today Elmwood is generating revenues of £13m, has a network of studios around the world and claims to be the most effective design agency in Britain. It has assets approaching £4m, held mainly in cash.

“It was pretty scary,” says Sands, 53, who is dressed in cream linen suit and trademark colourful tie. We are sitting in a glass-panelled meeting room at Elmwood’s offices as he recalls the management buyout.

His original backers, whom he subsequently bought out, told him they wanted a percentage failure rate in their investments because if some weren’t failing, then they weren’t taking enough risks.

“If you are not making mistakes, you are not pushing yourself,” says Sands. “The trick is obviously to learn from them.”

The creative industry has seen fundamental changes over the last 25 years. When he started out, there were no computers, just paintbrushes and magic markers to visualise design work.

Around the time of the MBO, Elmwood acquired its first Apple Mac, which it used for typesetting. Sands says there was a bonfire in the garden of the old HQ in Guiseley. On went the £7,000 headlining machine, bought just a year earlier. A set of expensive rostrum cameras, purchased to take negatives of artwork, were consigned to the dustbin of history.

Technology has transformed the business in so many ways. Video conferencing allows companies to work with clients everywhere, making the world a much smaller place (although Elmwood’s hotel and travel bill nearly hit £1m last year, showing that face-to-face can still trump FaceTime).

Searching for references for creative work is very easy nowadays, says Sands; in the old days, to find references or look at competitor examples, he had to get in his car and drive somewhere.

“I think it’s had lots of positive effects but some negatives: drawing skills are seemingly less important these days, but we want to find designers who can still draw,” he adds.

“We want people to use their minds and their creativity and scribble things that are unique.

“There is a danger that because references are so easy to find people end up repurposing other people’s designs and work becomes homogenous.

“We all need stimulus and inspiration... but the trick is to create something that is really protectable because it is unique.”

A quarter of a century is a long time for any business, let alone one in the creative space, which tends to be about people rather than processes.

Sands credits the variety, the intellectual challenge and the inspiration that comes from working with amazing people - Archie Norman was the best, he says - to his longevity, plus the chip on his shoulder that came from his schooldays. He left school at 16, conscious that he had failed academically. He says he has a terrible fear of failure.

An old client, who became a close friend, got the measure of Sands during a round at Woodsome Hall golf club in Huddersfield. Standing standing over a two-and-a-half foot putt, he told Sands: “You’re not going to give it me, are you? I forgot what a competitive little s*** you are.”

Sands admits: “I am one of the most competitive people I know, but not in a nasty way.” He really doesn’t mind losing at golf, he adds.

Elmwood has grown from regional player to become an international firm, growing with its clients. It started a decade ago with the opening of an office in Australia to service its client Coles, a supermarket group. Today, the firm has design studios in Leeds, London, New York, Hong Kong, Singapore and Melbourne.

After 25 years, Sands says he is considering his future. His peers have typically taken one of three routes, he says.

They have either sold out “and disappeared into the sunset with their wads”, gone bust or shrunk to a shadow of their former selves.

Sands says he doesn’t want to sell out and has something rather different in mind.

“This is my life’s work. To just sell it for money seems sad. The plan is to raise some capital to acquire the bulk of my shares so that we can do things - we can give other people equity here and we can invest in our growth plans.”

He says Elmwood has received various approaches over the years, including some from across the pond in the United States last year from firms looking for a bridgehead into the European market. He would consider such moves if they were able to fast-track the company’s ambitions.

But his preferred option would be another private equity deal, although he seems to be in no great rush.

In the meantime, he says he wants to build a truly global independent design agency.

“The goal, the vision is to be the world’s most effective brand storytelling agency. In other words, we want to be the best in the world, full stop.”

Fact box:

Date of birth: March 27 1961

Education: Left school at 16 but went on to complete a business studies diploma at Stockport college.

First job: Production assistant at IAS Advertising in Macclesfield.

Best book: 1001 Golf Holes You Must Play Before You Die by Jeff Barr.

Best song: Coz I Luv You. Slade

Best suit: Paul Smith

Car driven: Bentley Flying Spur

Watch: Breitling

Holiday: Skiing in the Alps, golfing in Scotland, with the family in the Med.

Best advice: The only thing you have to sell as a consultant is your integrity.