Congratulations, your firm is growing! Maybe you've scaled from five to fifteen staff in the last year, or taken on a raft of new projects that needed a bigger team. It’s an exciting sign of progress, but if you’re like many, you’ve also started to feel the strain behind the scenes.
The systems (or lack thereof) that worked when you were a tight-knit five-person studio suddenly feel stretched at 15–20 people. Jobs slip through the cracks. Invoices go out late. You’re unsure who’s working on what and despite a full pipeline, you’re watching the bank balance with growing anxiety.
I’ve spoken with countless firm owners in the 10–25 person range, and I keep hearing the same thing: “We need a better handle on our operations and finances – what got us here won’t get us to the next level.” In one of our recent webinars, someone asked how to calculate director charge-out rates once they become overhead – a classic scaling challenge.
So, let’s talk about keeping profitability on track as your firm grows. Here are five practical focus areas to help your business grow up without the growing pains.
1. Put Systems in Place – Before Chaos Takes Hold
When you’re small, you can get away with managing projects and finances on the fly. Maybe you’re tracking hours in Excel, mentally juggling resourcing, and sending invoices from a Word template. But as headcount and project load increases, this ad-hoc approach leads to errors, stress, and profit leakage.
Now’s the time to introduce real systems. That doesn’t mean splashing out on a complex ERP from day one, it’s about gradually formalising your processes and adopting the right tools for your size.
For instance, a dedicated time-tracking and project budgeting tool is a smart first step. Even a well-structured spreadsheet can work for a while – but there’s a tipping point (usually around 5–6 people) where specialist software starts to pay for itself. It’s about visibility: who’s working on what? Are you overrunning budget? Where are the bottlenecks?
Case in point: A 12-person architecture practice I worked with was still “winging it”, until they missed invoicing a variation order worth thousands. They introduced a simple project management tool and set up weekly check-ins. Within a quarter, profits improved and the director said the biggest win was peace of mind. No more trying to keep all of the to-dos in your head.
Action Step: Audit your current tools. Are your spreadsheets getting unwieldy? Is there a clear process for tracking time, fees, and progress? Pick one or two areas to upgrade this quarter, even if it’s just formalising your Monday morning resourcing meeting. Don’t wait for cracks to become crises.
2. Monitor Utilisation – Every Hour Counts
When your team’s small, it’s easy to spot who’s underworked or overloaded. But at 15–20 staff, it becomes harder to see – and that’s where profitability can quietly erode.
Utilisation rate (the percentage of time spent on fee earning work) becomes one of your most important levers. If it drops, profits follow because you're paying salaries without the revenue to match.
We've analysed Fresh Project's data covering over 200,000 A&E projects and found that that increasing utilisation by just 5% per team member is like adding an extra person’s output without hiring. No, this isn’t about pushing people to burnout, most firms aim for 75–80% utilisation for technical staff. But it is about ensuring time is used wisely.
It also helps with hiring decisions. A firm I advised used to hire as soon as they won work but without checking if their current team had slack. Once they started forecasting utilisation, they only hired when projected capacity consistently exceeded 90%. The result? Higher profit, less panic.
Action Step: Start tracking utilisation, if you aren’t already. Look at it monthly, by person and overall. Spot dips early – are they pipeline issues? Task juggling? Treat it like a fuel gauge: avoid redlining, but don’t idle either.
3. Recalculate Your Rates – and Rethink Overhead
As your firm grows, overheads increase: a bigger office, better IT, admin hires. Directors often shift from project work to business development, recruitment, or QA. This impacts your charge-out rates and profitability.
In a webinar we partnered on with Architects' Journal on, someone asked: “If directors become overhead, how do you set their charge-out rates?” It’s a classic pain point. The time you used to bill at £X/hour is now only 40% billable – meaning the cost per billable hour has doubled.
That’s why growing firms need to revisit their fee structure. The multiplier you used when you were five people may no longer cut it.
And it’s not just theory – RIBA’s 2024 Business Benchmarking report backs this up:
“Payroll made up 54% of total practice expenditure. For most practices, payroll grew faster than revenue, squeezing profit margins, with large practices feeling the squeeze the most.”
One firm found they couldn’t absorb two new admin hires without adjusting fees. They raised their rates by 5–10%, and framed it around added value: faster turnaround, better support. Clients accepted it and margins recovered.
Action Step: If you haven’t already, re-calculate your overhead and update your fee proposals accordingly. Use tools like Fresh Projects to model the true cost of delivery. Pricing needs to evolve with your structure or you’ll grow but wonder why profits don’t follow.
4. Get Proactive About Cash Flow – Bigger Projects, Bigger Risks
Larger projects bring longer timelines and often slower payments. If a few invoices are delayed, even a profitable firm can face a cash crunch.
That’s why growing firms need to become cash flow savvy. The basics still matter: invoice early, invoice often. Break billing into monthly cycles instead of milestone-based. Introduce upfront deposits. And chase those overdue payments.
One 20-person structural engineering firm started doing a 13-week cash flow forecast. Just a simple spreadsheet – expected cash in, cash out. It let them predict pinch points and make smart moves (like nudging a client or delaying a hire) in advance.
Action Step: Review your billing schedule – can you tighten it? Introduce retainers or deposits where possible. Forecast cash flow monthly and plan for dips. The firms that do this avoid the “feast and famine” trap that plagues growing studios.
5. Build a Business Development Routine – Not Just in a Panic
When you’re small, projects often come from personal referrals. But growth means more mouths to feed and one quiet quarter can really sting.
As you scale, business development needs structure. Track leads. Log proposals. Forecast when projects might land. This feeds into resource planning and helps you avoid taking on low-margin work just to keep people busy.
One 30-person firm learnt this the hard way: rapid growth, followed by a dry spell. Now they run quarterly BD reviews, and the director spends dedicated time each week nurturing relationships and tracking pipeline.
Action Step: Carve out regular time for BD. Use a CRM or even a simple spreadsheet. Track your win rates. Be strategic in what you pursue – don’t chase every RFP. Growth for growth’s sake isn’t sustainable. Profitable growth is the goal.
Scaling a design practice is thrilling (bigger projects, wider impact) but it demands new ways of working. Put in the right systems, keep your team efficiently utilised, update your pricing model, stay on top of cash flow, and make business development part of your rhythm.
The firms that get this right don’t just survive growth, they thrive. In fact, mid-sized practices (50–100 people) have seen significant profitability gains in recent years – often outperforming larger firms. With the right mindset and the right tools, growing doesn’t have to mean margin squeeze. It can mean better margins.
At Fresh Projects, we’re here to help you manage that transition. From moving you off spreadsheets to giving you visibility over fees, time, and performance – we’re built for growing firms who are ready to run smarter.