While the start-up phase of a company’s life can be make or break, the next step in the evolution of a growing business can be even tougher. GrowthBusiness' Breakthrough Clinic gives one company at a crossroads of expansion the chance to gain free advice from an expert business adviser on the possibilities for growth.

Company history
E3 was started in 1997 by two Bristol University graduates carrying out website design in the basement of a student flat. Originally branded New Generation Productions, the company’s first clients included Bristol-based publishing companies, Bristol University and local accountancy firms.

In 1999, with the dotcom boom in full swing, the business took off under the new brand E3 Media. The agency was behind projects such as Club Chef Direct – a restaurant home delivery service led by Jamie Oliver and a consortium of London chefs, and Student123, which has now become one of the UK’s biggest student portals.

By 2000 the business employed ten people and had a turnover of around £500,000. Then an internet investment firm approached co-founders Mike Bennett and Stuart Avery with an offer of £7.5 million to buy 50 per cent of the company. The pair turned it down, feeling they had not yet achieved their goals for the business and did not want to relinquish control. Instead, they continued to grow the business and win more and more accounts, including Orange in 2001, won in a competitive pitch from a top-five London agency. Originally a £20,000 project, the account grew to be worth around £1 million in fees.

Having dropped the ‘Media’ from its name, E3 now employs 40 people, with a turnover of around £2.7 million and predictions of 25 per cent growth next year. The agency is now the only top ten digital media firm based outside London and provides internet, intranet, multimedia design, and online marketing services to companies such as Halfords, National Express, Vodafone and Cadbury.

Current challenges
E3 is facing a number of issues as it tries to manage its growth. In particular, it is finding that, because the industry is so young, there are no role models or management textbooks for continued growth and competitiveness. The company wants to retain the values and principles that are at the root of its creation – such as entrepreneurialism, responsiveness and creativity – but this is increasingly difficult as it expands. It has grown organically until now, but the team are facing the proposition that more rapid growth might only be possible through outside funding.

Attracting well-qualified, talented employees is also a challenge. Bristol has a strong creative industries sector and E3 has been successful in attracting staff from leading London agencies in the past, but it is becoming increasingly difficult. The company has been recruiting for a business development director for several months without success, which loads extra pressure onto the remaining members of the management team, who already have enough on their plates!

The company is in the process of opening a London office and faces some tough decisions on how to integrate this into the current business model. Long-term, the company must also decide whether to move the entire operation to the capital.