Are Design Firms profitable and in demand?

I’m trying to get a feel for the profitability and even viability of product design firms since so many corporations do have a design staff now. What’s their annual revenue for instance? Is there a category such as large, medium or boutique firms? What about billing, i.e., how much per hour?

Two firms that I worked for are long gone: Henry Dreyfuss and Deskey. But, firms that I interviewed such as Smart, Group4 and Design Continuum are still around - I wonder how really successful they are?

Unfortunately you have to be a member to download the publications…
However - check out the Association of Professional Design Firms.

Their Financial Performace Survey probably contains the info you are interested in.

Thanks for the link!

Pricey, but I do need to join!

I’m seeing more mid sized firms closing and more small one man shops opening.

Interesting. I will be opening a small boutique firm this Spring (1-5) focusing on product design and development with royalty fee structure. About 20% of the work would be speculative ~~~

I’m seeing and hearing the same thing. The largest firms and the 1-3 person firms are surviving and the mid sized firms are getting squeezed out.

My feeling is that the mid-sized firms feel they have to offer more than design (research, engineering, model making etc.) but can’t find enough clients who want to buy these services from them to keep those staff members busy. High payroll and low billing = disaster.

You’ll need a good track record for people to give you royalties.
They don’t just agree to it with no proven case studies of how your ideas and contributions made zillions. I would always take some thing upfont, either an advacn on royalties or soe sort of base fee so taht you can keep afloat or have some kind of income while you are investing your time and energy in something that may never see the light of day.

Clearly a shift to larger firms and the smaller partner based consulting. The medium sized firms are struggling to find point of differientation and a way to charge the prices they need to to succeed. It begs the question, how will the larger firms of the future be created. Where will they come from if not the growth of a midsized firm.


Confused: can someone explain what mid-size means in number of employees? Is it just me or the market is really recessive right now? Feedback please…

i’d guess midsized is anywhere from 5-10 employees…


Not sure how this posted again, but since it did, let’s take a temperature. How are Design firms doing these days?

Up, down, level, tanking, exploding?


Just enough work to keep afloat but not enough to justify adding additional staff.

Any good ideas on what to do when clients are blaming the recession for not calling you for more work? How long this mess will last? How to keep our small staff busy and avoid laying them off?
please HELP :!:

Just enough work to keep afloat but not enough to justify adding additional staff.

yeah, the cyclical nature of consulting is still feast or famine, but not steady enough to really grow

I think the big companies who can really fund serious design programs already have their in-house departments and a short list of outside firms they go to over and over again.

Wow, it’s been almost 2 years since I made this post. Well, 2009, for intents and purposes. was a horrible year to say the least. I’m curious how the design business is doing, especially the smaller firms.

I’m a small (just me) specialized (footwear mostly) consultancy,and things have been great. 2009 was the best year in the past 3.


Very interesting. The garment industry, in general, has taken a huge hit. But, footwear is still good (?). You are very fortunate. Perhaps I need to move over there, or get a corporate job at NIke :slight_smile:

footwear industry in general also down a lot, I think I just got lucky for a few reasons. lots of clients are start ups, plus it seems many companies let go staff in 2008/09 then needed projects for 09 as things picked up (compared to 08), plus i do a variety of different things (graphics, marketing, etc.) that also helped by diversifying.


R, sounds like fun! I think it helps that you are focused in footwear design while providing other non-design services.

Recall, I try to provide legal and design services, but most don’t really understand the need for legal services, or at least not the legal cost :unamused: