Design Company

How Profitable Is A Design Company? (Updated for 2024)

Pat Walls

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Updated: October 7th, 2024

How Profitable Is A Design Company? (Updated for 2024)

So you want to start a design company?

And the first question that came to your mind was, “well, are design companies actually profitable?”

With a market size of $153B - there’s plenty of business to go around.

Especially considering:

You could start a design company with as low as $1,000
Based on our data, design companies generate an average of $259K per year
You could see gross margins as high as 95% with design companies

There’s money to be made. Don’t worry.

But, I don't want to spoil it all. Below we’ll cover everything you need to know when it comes to the profitability of a design company.

Let’s dive in!

Is a design company profitable?

Yes, a design company is generally a profitable business. However, you still need to consider several factors since these things always impact the overall outcome.

For instance, since average revenue is $259K per year with an estimated gross margin of 90%, you could expect to recover your investment within 7 months or even less.

But of course, it all comes down to how much you earn compared to the potential revenues of your design company.

To determine whether your business is profitable, you should earn more than your expenses in the beginning months. However, while you're in your first month, it can be challenging to know what to expect.

Therefore, you should maintain a record of your monthly expenses and income to determine whether you're meeting your goals. By doing this step, you can see how your design company is doing and if any changes or adjustments need to be made to enhance or maintain your efforts.

Is a design company worth it?

If you’re wondering if a design company is worth it, the answer is a big YES. With design companies, you have the potential to earn $259K per year (this is based on data reported by real founders).

Further, you could have your initial investment back within months. Simply put, it’s a business worth a shot, especially if you have the resources and make the necessary efforts to achieve or surpass the target.

With a market size of $153B, it will be possible for you to build something that grows and turns into a flourishing business. As such, it’s the type of business you might want to consider starting.

Of course, you must learn and understand every aspect of running a design company to ensure success. Still, as long as you have the initial investment and can endure a few months before your actual gains, this business could be worth it.

You might want to consider reading more specifics about successful design companies case studies.

Examples Of Profitable Design Companies

Here are a few examples of profitable design companies, and a few more details about them:

1. Revolution Design ($240K/year)

Kerim, frustrated by the inefficiencies and unfair practices he encountered as a freelance designer, launched Revolution Design, a design-as-a-subscription service, now generating $20k/month after 10 months in beta. This platform eliminates hourly billing, offering top-tier design services for a flat $4,990/month, revolutionizing access to premium design talent.

Is it profitable? Yes
How much money it makes: $240K/year
How much did it cost to start: $1K

How I Started Our $20K/Month Design Subscription Service [In Beta Phase]

Get top-tier designers in 24 hours with Revolution Design, a design as a subscription service for fast-growing tech companies, saving you six figures a year and supercharging your growth, with a 7-day risk-free trial and a monthly fee of $4,990/mo.

Read this case study

Read by 1,653 founders

2. BRCHN Design House ($480K/year)

Sam Birchenough, driven by a childhood passion for building and taking things apart, founded BRCHN Design House in 2015, enduring six months of zero income and $35,000 in debt before turning the business into a success, with current monthly revenues between $20,000 and $80,000.

Is it profitable? Yes
What's the gross margin? 95%
How much money it makes: $480K/year
How much did it cost to start: $1K

How I Went From $35K In Debt To $40K/Mo With My Product Design Company

This case study outlines how BRCHN Design House went from starting with no revenue to bringing in $20,000 to $80,000 monthly, by developing an efficient product design process, leveraging networking opportunities, and retaining clients through exceptional service.

Read this case study

Read by 835 founders

3. Freshly Squeezed ($33.6K/year)

Adam Crookes, the founder of Freshly Squeezed, had always dreamed of running his own business and had been developing ideas since his high school days. After leaving a digital marketing agency, he took the opportunity to start a content writing business. In just six months, Freshly Squeezed has become incredibly successful, earning considerably more than Adam's previous job.

Is it profitable? Yes
How much money it makes: $33.6K/year

How I Started A $2.8K/Month Content Writing Agency Focused On SEO Growth

Learn how Adam Crookes started a content writing business, Freshly Squeezed, from scratch, resulting in $3K MRR in just 6 months, and get tips on attracting and retaining customers and building a successful service-based business.

Read this case study

Read by 6,120 founders

Learn more about starting a design company:

Where to start?

-> How much does it cost to start a design company?
-> Pros and cons of a design company

Need inspiration?

-> Other design company success stories
-> Marketing ideas for a design company

Other resources

How much can you make with a design company?

With a design company, you can make an average of $259K revenue per year (based on data reported by real businesses).

You can start with an initial investment as low as $1,000. Then, with proper knowledge and sustained effort, you could have an ROI (return of investment) within 7 months.

How much does a design company make a week?

Based on our data, average weekly revenue for a design company ranges around $5.39K. As such, you could see monthly revenues of $21.6K.

To know if your design company achieves the weekly profit target, you need to keep track of the total earnings you get per day. Afterward, you'll want to consider subtracting the expenses you have daily.

Learning your weekly profit can also show whether you're hitting your target goal for your design company.

How much do design companies owners make?

The income of a design company owner can vary depending on various factors such as location, size, competition, and the owner's business skills.

But to give you some idea, the weekly revenue of an established design company is about $5.39K. But this can be lower or higher depending on so many factors - it's almost impossible to say exactly.

While the potential for earning a good income as a design company owner exists, success in this field requires a commitment to providing quality products and services and building a strong reputation within the community.

Design Company Profit Margins

Generally speaking, a design company can expect profit margin of around 90%. Profit margins refer to the percentage of revenue that remains after deducting all expenses associated with running a business. In the case of a design company, profit margins can vary depending on various factors, such as the type and quality of products sold, the size of the store, and the level of competition in the area.

However, these figures can vary depending on the pricing strategy, inventory management, and overall efficiency of the business. To maintain healthy profit margins, design company owners must focus on managing costs, negotiating favorable supplier terms, and providing high-quality products and services to attract and retain customers. By doing so, design company owners can ensure long-term sustainability and profitability for their business.

Design company owner salary

The salary of a design company owner is an unpredictable figure. It's significantly influenced by numerous factors, including the store's location, its size, and the degree of competition. An owner of a well-established design company, in a prime position, might see an average weekly salary around the ballpark of $4.85K.

But it's worth noting, such numbers aren't always consistent. The earnings can vary wildly, potentially swinging by as much as 80% either way.

Achieving consistent success and maintaining a reliable income stream in this industry requires a deep commitment. It's imperative to offer high-quality products, deliver impeccable customer service, and nurture a trusted bond with the community you serve.

Conclusion

In a nutshell, based on many of our examples, a design company may be a promising business to start - but the success of your design company mostly depends on your effort and your approach.

If you focus on these, you'll have a much higher chance of a profitable design company.

Part of

Starting A Design Company: Everything You Need To Know

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