There is no doubt budgets are getting tighter. Clients are loath to start projects and putting many on hold and waiting to see if the economy improves.
So how do you increase profits in this market?
Look at value capture. We’ve developed a value stack (want to know more? email Greg). The value stack shows where value can be created and captured in a design business.
In the capture phase we look at how we can capture more internal value from the clients’ dollar.
The answer is in the dreaded productivity.
Productivity is the return you get from the hours you put into a project. It’s measured in the dollars clients pay against what it costs to produce the work. That cost is largely in salaries. Most design businesses will have 60—70% of their expenses in salaries. So the answer is to get more output for those salaries; increase productivity.
This is not about making people work harder or longer unpaid hours.
The Productivity Commission looks at what makes businesses more productive. Their findings show productivity gains come from two activities; improved technology in the work place and staff development (training).
In simple terms this means you need to invest to get productivity increases.
There is no doubt an AI enhanced Adobe Suite will reduce workload in a design business. It has already made it quicker to implement designs. We have seen the increasing use of AI in photoshop. Then we have functions such as: content-aware fit, find similar images, intelligent subject detection and text wrap and content-aware style packs. All AI additions that Adobe has built in.
The rollout work will be impacted first. It’s here AI technology can replace junior designers. Those designers who typically ‘cut their design teeth’ on the rollout work in the studio.
This is inevitable so why not jump in and work out how AI in apps can improve your productivity? Look at efficiencies by fully using the capabilities of the Adobe Suite.
The problem is as Adobe makes their apps more accessible clients will take more of the base work inhouse.
You have to counter this by developing skills in higher order services. The type of skills that push your work further up the design ladder. This means developing skills that clients will pay for because they add value for them. Such as using HCD to better understand your clients’ customers and position their products as prestige (higher value).
Analysing how all this works in a design business is not easy. The DBC in conjunction with Streamtime have developed the Happier, Healthier Creative Business Canvas as a tool to help this analysis.
Always happy to talk the business of design – contact me if you would like to learn more.
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Greg Branson
Greg’s passion is the research and development of methods that improve design management and the role of design in business.
Greg has developed The Design Business School to help owners manage their business better along with showing designers how to get more involved in the studio and develop their career path. Contact Greg.
