Design Tool

How Profitable Is A Design Tool? (Updated for 2024)

Pat Walls

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Updated: September 13th, 2024

How Profitable Is A Design Tool? (Updated for 2024)

So you want to start a design tool?

And the first question that came to your mind was, “well, are design tools actually profitable?”

With a market size of $153B - there’s plenty of business to go around.

Especially considering:

You could start a design tool with as low as $1,000
Based on our data, design tools generate an average of $4.9M per year
You could see gross margins as high as 95% with design tools

There’s money to be made. Don’t worry.

But, I don't want to spoil it all. Below we’ll cover everything you need to know when it comes to the profitability of a design tool.

Let’s dive in!

Is a design tool profitable?

Yes, a design tool is generally a profitable business. However, you still need to consider several factors since these things always impact the overall outcome.

For instance, since average revenue is $4.9M per year with an estimated gross margin of 83%, you could expect to recover your investment within 12 months or even less.

But of course, it all comes down to how much you earn compared to the potential revenues of your design tool.

To determine whether your business is profitable, you should earn more than your expenses in the beginning months. However, while you're in your first month, it can be challenging to know what to expect.

Therefore, you should maintain a record of your monthly expenses and income to determine whether you're meeting your goals. By doing this step, you can see how your design tool is doing and if any changes or adjustments need to be made to enhance or maintain your efforts.

Is a design tool worth it?

If you’re wondering if a design tool is worth it, the answer is a big YES. With design tools, you have the potential to earn $4.9M per year (this is based on data reported by real founders).

Further, you could have your initial investment back within months. Simply put, it’s a business worth a shot, especially if you have the resources and make the necessary efforts to achieve or surpass the target.

With a market size of $153B, it will be possible for you to build something that grows and turns into a flourishing business. As such, it’s the type of business you might want to consider starting.

Of course, you must learn and understand every aspect of running a design tool to ensure success. Still, as long as you have the initial investment and can endure a few months before your actual gains, this business could be worth it.

You might want to consider reading more specifics about successful design tools case studies.

Examples Of Profitable Design Tools

Here are a few examples of profitable design tools, and a few more details about them:

1. Snappa ($1M/year)

Christopher Gimmer, the co-founder of Snappa, came up with the idea for the business after struggling to create graphics for his blog posts. As he searched for a simple and powerful graphic design tool, he realized there was a need for one geared towards marketers and entrepreneurs. He leveraged his viral blog post about free stock photos to market Snappa and collected feedback from potential users before building the prototype.

Is it profitable? Yes
How much money it makes: $1M/year

How Two Friends Bootstrapped A SaaS Business To $55K MRR

Learn how two friends bootstrapped a SaaS business to $55k monthly recurring revenue (MRR) by creating a simple graphic design tool for non-designers and focusing on content marketing for customer acquisition.

Read this case study

Read by 21,311 founders

2. BRCHN Design House ($480K/year)

Sam Birchenough, driven by a childhood passion for building and taking things apart, founded BRCHN Design House in 2015, enduring six months of zero income and $35,000 in debt before turning the business into a success, with current monthly revenues between $20,000 and $80,000.

Is it profitable? Yes
What's the gross margin? 95%
How much money it makes: $480K/year
How much did it cost to start: $1K

How I Went From $35K In Debt To $40K/Mo With My Product Design Company

This case study outlines how BRCHN Design House went from starting with no revenue to bringing in $20,000 to $80,000 monthly, by developing an efficient product design process, leveraging networking opportunities, and retaining clients through exceptional service.

Read this case study

Read by 776 founders

3. TruTech Tools, LTD ($27.5M/year)

Bill Spohn, the founder of TruTech Tools, had a background in the HVAC/R industry and recognized the pain points that technicians faced in finding and purchasing tools and test instruments. Along with his business partner, Jim Bergmann, they envisioned creating a one-stop-shop for these products. They started the business in 2007 and have since experienced significant growth, with projected sales of $16 million in 2020 and recognition on the Inc 5000 list multiple times.

Is it profitable? Yes
What's the gross margin? 15%
How much money it makes: $27.5M/year
How much did it cost to start: $19.7K

How We Started A $1M/Month Business Selling HVAC And Energy Auditing Tools

TruTech Tools, LTD is one of the largest online stores in the niche market of tools and test instruments for HVAC/R Technicians, with $16 million in sales in 2020 and 20% YoY growth thanks to a focus on providing an exceptional customer experience and staying true to their core values.

Read this case study

Read by 9,375 founders

Learn more about starting a design tool:

Where to start?

-> How much does it cost to start a design tool?
-> Pros and cons of a design tool

Need inspiration?

-> Other design tool success stories
-> Marketing ideas for a design tool

Other resources

How much can you make with a design tool?

With a design tool, you can make an average of $4.9M revenue per year (based on data reported by real businesses).

You can start with an initial investment as low as $1,000. Then, with proper knowledge and sustained effort, you could have an ROI (return of investment) within 12 months.

How much does a design tool make a week?

Based on our data, average weekly revenue for a design tool ranges around $102K. As such, you could see monthly revenues of $408K.

To know if your design tool achieves the weekly profit target, you need to keep track of the total earnings you get per day. Afterward, you'll want to consider subtracting the expenses you have daily.

Learning your weekly profit can also show whether you're hitting your target goal for your design tool.

How much do design tools owners make?

The income of a design tool owner can vary depending on various factors such as location, size, competition, and the owner's business skills.

But to give you some idea, the weekly revenue of an established design tool is about $102K. But this can be lower or higher depending on so many factors - it's almost impossible to say exactly.

While the potential for earning a good income as a design tool owner exists, success in this field requires a commitment to providing quality products and services and building a strong reputation within the community.

Design Tool Profit Margins

Generally speaking, a design tool can expect profit margin of around 83%. Profit margins refer to the percentage of revenue that remains after deducting all expenses associated with running a business. In the case of a design tool, profit margins can vary depending on various factors, such as the type and quality of products sold, the size of the store, and the level of competition in the area.

However, these figures can vary depending on the pricing strategy, inventory management, and overall efficiency of the business. To maintain healthy profit margins, design tool owners must focus on managing costs, negotiating favorable supplier terms, and providing high-quality products and services to attract and retain customers. By doing so, design tool owners can ensure long-term sustainability and profitability for their business.

Design tool owner salary

The salary of a design tool owner is an unpredictable figure. It's significantly influenced by numerous factors, including the store's location, its size, and the degree of competition. An owner of a well-established design tool, in a prime position, might see an average weekly salary around the ballpark of $84.6K.

But it's worth noting, such numbers aren't always consistent. The earnings can vary wildly, potentially swinging by as much as 80% either way.

Achieving consistent success and maintaining a reliable income stream in this industry requires a deep commitment. It's imperative to offer high-quality products, deliver impeccable customer service, and nurture a trusted bond with the community you serve.

Conclusion

In a nutshell, based on many of our examples, a design tool may be a promising business to start - but the success of your design tool mostly depends on your effort and your approach.

If you focus on these, you'll have a much higher chance of a profitable design tool.

Part of

Developing A Design Tool: Everything You Need To Know

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