Is Lighting Design a Profitable Business?
Independent lighting design practices in the world (courtesy Arc Magazine Feb 2024)
As I was about to write my blog, the latest Arc magazine landed on my desk and in it an article curated by Paul James about the current state of lighting design in the world. As a passionate lighting designer with probably more creative juices then real business acumen I thought I would pick up on this and share it with my readers.
That the number of independent lighting designers has grown to 1830 practices in 2023 from the 1787 accounted for in 2022, compared to the mere 826 that were listed in 2011, the first time the review started, is staggering. You would say that purely based on this growth, you could conclude that there is a lot of demand for lighting design!
The survey dished out some very interesting numbers! Europe (UK included) has by far the most LD practices, with a total of 791 practices. UK alone accounts for 235 of these. The America’s (USA and Latin America) follow with 538 practices, with the USA leading with 452. Asia (China, Hong Kong and Japan) follow with a combined 158 practices. Not specifically listed are the many practices operating in the Middle East, South East Asia (India) and Asean which includes Singapore Malaysia, Thailand Philippines, Indonesia and more. When doing the maths from the total of 1830 mentioned, the balance of 278 would be these “missing” countries combined. I would venture to say that there are actually many more practices (now not accounted for) in these countries which have a very high count of project activities.
Is it also profitable? The survey found that the average annual revenue of those practices interviewed was $716,500, up from $598,00 in 2022, after a Covid dip in 2021. Practically all of them reported growth in revenue. The average amount of employees per practice has been up and down with the latest figure for 2023 standing at 6.5, down from around 8 in 2022. In general my observation is that Covid did impact and more employees work part-time and/or remotely from home. Growth in terms of revenue per head was also reported up to $110,719 in 2023 from $76, 938 in 2022.
However none of the practices disclosed how profitable they were or whether the revenues were solely derived from design fees alone. From my experience 10% profit should be routinely achievable, savvy LD marketeers might achieve more. But what about the fees? This important indicator is missing from the survey. Have the fees been under pressure in the current economy, most probably, yes! Would love to hear from the community on whether lighting design is or can be a profitable business! Passion does not always pay the bills!
