How small firms invest in design expertise to develop new products and corporate identities to communicate their services is little understood. The research reported here documented the ways in which small manufacturing and service companies use professional design skills and their approaches to managing product, engineering and graphic design. Many firms are wary about the potential cost of employing professional designers and are unsure about the commercial outcome of design investment. Thus, a need exists to enhance design awareness amongst small firms. Those firms that employed design effectively found that design contributed to their business success. However, expertise in sourcing, briefing, liaising and evaluating design were varied and so training small companies in design management skills is needed also. Ó 1999 Elsevier Science Ltd. All rights reserved Keywords: design management, design strategy