Things were going so smoothly at graphic design agency Lemon Creative as it turned over £400,000 a year from contracts with model maker Hornby.

It was frequently all hands on deck creating packaging for the Margate-based toy firm’s various brands like Scalextric and Corgi.

Then came the London Olympics. Hornby suffered poor sales of models it created for the games and had to cut costs drastically to return to profit.

That meant moving things like packaging design in-house, a catastrophic decision for Lemon Creative and its boss Drew Selman.

By June last year, the company had been forced out of its office near Faversham and made six of its seven staff redundant.

“The Hornby board had to answer to the shareholders and their profits weren’t as good as they predicted,” said Mr Selman, whose company was founded as Appleby Case in 1983 before rebranding in 2006.

“They had to cut costs and asked us to help them grow their in-house design team. We gave them our knowledge about their product, packaging and ranges.

“It was a strange process because we knew their goal was to be independent. Their team has grown over the last two years to the point where they don’t need any outside help with their design requirements.”

Forced to lay off his staff and relocate his business to his home in Bossingham, near Canterbury, Mr Selman struggled.

He said: “It was traumatic. Making people redundant was a hard process. I had worked with these guys for many years and your employees become your friends.

“The hardest thing for me was to pick myself up again. I was down at that time.”

After unsuccessfully applying for funding, Mr Selman enlisted the help of a business coach, which he credits with turning his company around.

“The thing I like about my coach is he is looking after me from the business side but also from a personal development perspective,” he said.

“That is exactly what I needed to raise my game and make Lemon Creative successful again. I am being put out of my comfort zone which is good because it makes me do things I wouldn’t normally do.”

It was not long before the phone began ringing again, capped off by a call from marketing agency Publicis with a proposals for their client Confused.com.

He was employed to design packaging for the toy version of their robot Brian from the television adverts, which is sent out to customers who take out policies with them.

“They wanted the packaging to be retained rather than disposed of as soon as it arrived,” said Mr Selman, 49, who lives with wife Debbie, daughters Iona, 16, Corran, 14, and 11-stone leonburger Samson.

“I suggested developing some interative aspects for the children. The packaging is based on a docking station which Brian the robot goes into every day to recharge his batteries.

“It gives the product some playability and keeps the packet in the home, reinforcing the brand.”

Mr Selman hopes to rebuild his business and eventually take on staff again. He admits his biggest mistake was “having all my eggs in one basket” with Hornby, an error he will not repeat.

“Although I had other clients, they weren’t big enough to keep the company going in the state where it was,” he said. “We went wrong because all our eggs were in one basket.

“I don’t want to run before I can walk. I have been bitten once before and want to make sure I have a good base of clients before I commit to taking on staff.

“I wouldn’t want something catastrophic to happen and let them all down again.”