I am constantly researching and writing about the Australian design industry, in particular the direction that graphic design is heading.
I’ve taken on a lot of mentoring and through the wonders of skype I’m able to interact with design studios all over the country.
In the mentoring I’ve seen a lot of evidence that small studios (three or less employees) are having a hard time making a living from their design efforts. After mentoring 40+ studios I can fairly accurately say many of the Australian graphic design businesses of this size are suffering.
The bread and butter work that many studios do to pay overheads is disappearing. It’s being taken by freelancers and the international competition from the likes of 99 designs. Where the small studios once had a few hundred local competitors they now have hundreds of thousands of global competitors. This is the reality of running a design business today in Australia and we all need to get over it; stop complaining and move on.
Moving on means adapting the business. Examining the business model and ‘pivoting’ to a model that is not so reliant on the craft of design.
To do this the sustainable design studio needs to add new services. That doesn’t mean learning HTML or web programming, but learning to be a strategist or consultant to clients.
The fact is many small studios already do this, they don’t recognise it or package it to be a saleable service to clients. This is the move from selling design hours to selling design value.
I show how to do this in the Building a business model workshop where I show that studios can reinvent themselves by looking closely at their clients and their competitors in a design business model canvas.
Selling design value is not an easy task. Many studio owners that I mentor describe trying to do it but they get push back from clients. The answer is in the way that you package up “design value”.
I’ve explored ten ways of selling design value in The business of design publication.
In my mentoring I’m also hearing about clients taking design inhouse. Some studios have answered this by offering to work inhouse for two or three days a week. That’s fine for a short time but it will ultimately lead to a decrease in their business and they will move to being an employee earning less that they did by working as an external design consultant. When I analyse the tasks being done by these inhouse designers, many are reactive and low level. The client wants to take the work inhouse because they think it will cover up their lack of planning or they can get the low level tasks done at a lower dollar cost.
The answer is to educate clients to the real issues and costs. Even employing a casual part-time person has oncosts that most businesses don’t take into account.
A report by the Australian Productivity Commission stated that:
“Also, part time workers can have the same fixed costs as full time workers, (for example, recruitment and training costs and staff administrative costs) but work fewer hours to enable the employer to recover those fixed costs. They may also require more supervision than full time workers given their less intensive contact with the businesses operations.”
This is an interesting quote to use with clients who want to save costs by taking the work inhouse.
The other issue of reactive clients could be addressed by developing a quarterly or annual plan with them. A recent survey (What clients think 2014) by the UK Design Business Association found that 76% of clients believe that their design agency could be better at communicating in the gaps between projects. Taking up this point it seems that staying in touch with clients and keeping them on track with work is one way to show that you can manage their inadequacies in planning.
All of this indicates that the graphic design business that relies on just “selling design” is bound to plod along trying to make a living.