Many creative firms operate with the same intent – “to have great people doing great work for great clients”. This is very commendable but I always think that the phrase needs a couple of words added at the end – “delivered profitably”.

Profit can often be an afterthought but ultimately it is the fuel for your business. Being profitable should translate into more cash in the bank and gives you the freedom to make longer term decisions about how you want to run your business, rather than lurching from problem to problem and having to make knee-jerk reactions.

So how should you go about setting your design business up to be profitable? And what key metrics should you be looking at? I was asked to pick my favourite and settled on the staff cost to fee income ratio. 

So what does that actually mean?

People costs are normally the largest cost within an agency or studio. Getting the alignment correct between your fee income and your people costs is the single biggest driver of achieving profit within your business. If you can get it right, it solves a lot of other issues in your business. Get it wrong and it doesn’t matter how hard you work, you’ll never make any money. So what is it and how do you calculate it?

It’s important to define each of the financial terms so that you can apply it consistently within your own business. Different people have different ways of calculating some of these figures – the important thing is to pick a method that you are comfortable with and then stick with it.

The first thing is to establish the difference between gross billings and fee income.

• Gross billings – everything that you invoice to clients. This will include any pass through costs and media buys and will be the total revenue that your agency invoices to clients.
• Fee income – this is what is left for your agency after you have deducted any pass through costs. It can be a grey area as to what you include in the pass through costs but I would advise you limit it to third party costs i.e. anything that your agency doesn’t do as part of its ordinary internal activities, so things such as media buys, location costs etc would be stripped out. However it shouldn’t exclude freelance costs where the freelancer is providing a service similar to your own internal staff.

The reason for using your fee income rather than gross billings is that this is the actual revenue that belongs to your agency and sits against your controllable costs. To use an extreme example, if you have invoiced a client for £500k but that includes £400k media buy, then your fee income is only £100k. Likewise if you have a £100k design project for a client being delivered entirely by your internal team, then this also has fee income of £100k.

Now that the fee income has been established, it should be compared to your total people costs, which I define as your internal staff costs plus freelancers plus a market rate salary for the founder (if they use a combination of salaries and dividends to pay themselves).

The historic agency model suggested a ratio of 60:20:20 i.e. for every £100 of fee income, £60 should go on people, £20 on overheads (your remaining costs) and that leaves £20 of profit. Or in other words a staff cost to fee income ratio of 60%.

If your staff cost to fee income ratio is significantly below that, it indicates either that you’re potentially running your team into the ground and at risk of burnout or that you have hit the sweet spot of being able to charge higher prices to your clients.

If your ratio runs significantly higher than that, you’ll likely find that everyone is busy but you’re not actually making any money. You’ll need to dig further into your finances to understand what is causing it – it might be pricing (a ratecard issue), it might be overservicing (a scoping/delivery issue), it might be that your recovery rates are too low (a scoping issue). The important thing is not to ignore it.

One of the main ways I’m seeing agencies manage their people costs more effectively has been to operate a leaner model with a smaller core internal team, supplemented by a roster of experienced freelancers. The bulk of agency revenue is project based and adopting this approach allows you to scale the team up and down as needed, without having to carry the additional cost in months where revenue is lower.

If you can keep your staff cost to fee income ratio consistently in the 60%-65% range then the profits should follow.

Other expert perspectives:

In Focus: Where agency margins are won – or lost in delivery: DBA Expert Manish Kapur

In Focus: The people story behind the numbers: DBA Expert Aliya Vigor-Robertson

New Designers has been showcasing the work of emerging design talent for over 40 years. Founded in 1985, the event has become the UK’s leading exhibition for up-and-coming designers, providing a platform for thousands of graduates to showcase their work and connect with industry professionals.

Explore the work of over 2,500 talented designers, with all design disciplines presented side by side, from furniture to product design, illustration and more, to better represent the interdisciplinary nature of design today.

As the largest showcase of graduate designers in the country, ND offers an unrivalled opportunity for businesses to add such a high calibre of fresh designers to their talent pool. Find the next great addition to your team and streamline your recruiting process.

New Designers returns this July in a new, focused four‑day format.

From 1–4 July, final‑year designers from across the UK will present work publicly for the first time – all disciplines, four-days, one show.

For industry professionals, it’s a practical way to:

• See new work across multiple design disciplines
• Meet designers face‑to‑face at an early career stage
• Get a clear sense of emerging approaches and thinking

If you work in design, New Designers is a useful place to spend time.

Use code DBAND26 for 20% off a Day Pass (excludes late nights).

Book your ticket or if you are a DBA member you can secure a Free Trade Pass here.

Day Passes give you access to your chosen day of New Designers. Day Pass holders may also attend Talks and Workshops taking place during event hours (opening hours vary) at no additional cost.

You can also purchase a ticket for the New Designers Awards Ceremony and be the first to discover outstanding designs selected by the industry for their innovation plus return to the show on all public opening days to experience all the Show has to offer.

• We know from last month’s ‘What Clients Think’ Report launch that 83% of clients want more tailored, relevant engagement. That could mean demonstrating a deeper understanding of their market, their challenges, and how competitor activity might shape their decisions. If you’re not already using generative AI to support client development, it’s worth exploring. Lucy Mann has some simple, practical prompts to get started. Get in touch with her directly. 
• One of the biggest barriers to AI adoption is security. In many organisations, AI sits under the CTO, which might limit the use of tools like Slack. One member is shifting their approach and building solutions within a security approved Microsoft environment. While it might be less flexible, it’s more viable for large clients and has opened up opportunities. 
• Enterprise AI setups like private, in-house GPTs allow teams to work securely with the added benefit that data isn’t used to train external models. 
• Within these environments, AI can become a powerful productivity tool that supports better briefing, generating brand worlds, and accelerating early-stage exploration. 
• There are 2 different ways to approach AI – retrofit thinking, where you use AI to do the same work faster or cheaper – or AI native thinking – where you are creating new ways of working that weren’t possible before. 
• There can be real advantage in the AI native area – it has the potential to reshape team structures, workflows and even your leadership.
• If everyone uses the same AI tools, outputs become generic – but if you add your ‘context layer’ – your company knowledge, values, experience and decision making style – you can really gain competitive advantage.
• Don’t stop thinking – AI can help you think, but don’t let it think for you. There’s a difference between using it to extend your capabilities and becoming overly reliant on it.
• Ask yourself, what’s your AI strategy? Because ultimately even if AI turns out to be less transformative than expected, using it will still improve your business. But if it is transformative and you fail to engage, you risk falling behind.

Check out our upcoming events – we’d love to see you at our Summer Party with the team at Podge. And if you’re looking for a good book, we’ve got a great list of recommended reads.

The next DBA Member Forum is on Monday 1 June, 1.30-2.30 BST. 

In today’s market, creative and design-led businesses face an increasingly complex challenge: how to stand out, stay relevant, and grow in an environment where attention is scarce and competition is relentless.

Winning new clients isn’t just about having the best ideas, the most innovative designs, or the strongest portfolio. It’s about visibility, credibility, and influence which requires a truly integrated PR and Digital strategy.

Yet, too many businesses still treat PR as a single-channel effort, focusing solely on design trade coverage, relying on sporadic press outreach, or posting intermittently on social media. In 2026, this fragmented approach no longer works.

The brands and agencies thriving today are those orchestrating their communications holistically — using the PESO Model® to connect every touchpoint into a single, cohesive engine for growth.

The PESO Model®: A Growth Framework

The PESO Model® (Paid, Earned, Shared, Owned), created by Gini Dietrich is an operating system for building influence, driving business outcomes, and positioning your brand where it matters most.

PESO Model® Diagram:

Paid Media: Precision-led amplification

Targeted campaigns that put your business in front of decision-makers, using tools like paid social, sponsored thought leadership, and strategic partnerships.

Earned Media: Authority through validation

High-value coverage in business, sector-specific, vertical trade, and design publications that positions you as an expert and a leader.

Shared Media: Influence at scale

Social platforms like LinkedIn, Instagram, and YouTube where clients, collaborators, and talent actively engage with your brand and share your story.

Owned Media: Your narrative, your platform

Thought-leadership content, case studies, insights, and SEO & AEO-optimised assets on your website and channels that convert awareness into trust — and trust into leads.

The power of the PESO Model® comes from integration. When each channel works together, every message is amplified, every interaction is reinforced, and every potential client experiences a consistent, credible brand story.

Why Integrated PR and Digital Matter More Than Ever

For creative and design businesses, reputation is everything, but reputation alone doesn’t win pitches. You need visibility with the right audiences, influence in the right spaces, and authority in the conversations that shape your sector.

An integrated PR and communications strategy delivers exactly that:

●      It builds credibility in business and trade press alike, where clients and investors are looking for proof points.

●      It drives discovery by optimising content for search and amplifying reach through targeted campaigns.

●      It strengthens influence by leveraging social platforms where decision-makers engage and talent pipelines are built.

●      It compounds impact — every article, post, and campaign reinforces the next, accelerating growth.

In short, integration transforms PR and Digital channels from a cost centre into a growth engine.

The Cost of Staying Siloed

Too many creative businesses still silo their communications, prioritising design trade coverage, neglecting digital channels, or treating PR as a reactive function.

The risks are significant:

●      Missed opportunities with decision-makers outside your immediate network.

●      Limited visibility in the broader business, investor, and talent ecosystem.

●      Weaker brand positioning compared to competitors using integrated strategies.

In today’s market, the brands winning the biggest briefs aren’t just doing great work, they’re seen, heard, and trusted across every platform that matters.

The Digital Landscape and Impact

In today’s ever-evolving digital landscape, growth rarely comes from a single channel. Prospective clients move between search, social, recommendations, industry voices, paid activity and owned content, making it harder than ever to know where your effort and investment should sit.

Every piece of content you post and every piece others post about you is shaping how you show up across AI tools and defining your brand’s narrative. Knowing where you need to show up has never mattered more.

Auditing your channels is one of the most effective ways to understand what’s performing, what isn’t, and where the strongest opportunities sit, helping you direct resources where they will earn the greatest return.

To ensure your channels and content stay relevant, it’s critical to measure and track your digital impact. Implementing a test-and-learn approach allows you to constantly refine and improve your “digital estate”.

Lead the Conversation, Don’t Chase It

In a creative economy where design drives growth but visibility drives opportunity, integrated PR and Digital are no longer optional. The PESO Model® isn’t about doing more for the sake of it, it’s about doing the right things, in the right places, at the right time.

For creative businesses looking to win bigger clients, attract top talent, and secure their market position, the message is clear: connect your communications ecosystem or risk being overlooked.