From Connie G. Thomas,
Your Guide to Cross-Stitch.
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Definition: Finished Design Size refers to the actual space the stitched design takes up on the Cross Stitch Fabric.

The count of the Cross Stitch fabric affects the finished design size. The higher the count of the fabric, the smaller the finished design size will be.

It is important to remember that the fabric should be cut larger than the finished design size so that extra fabric surrounds the completed design.

For a small project, the fabric may be cut an inch or two larger. For larger projects, add at least three inches around each edge. If the design is large and you plan to have it framed, you may want to consult with a framing professional to ensure that enough extra fabric will be allowed.

The photo shows how the same design appears when stitched on different counts of fabric. The design on the left is stitched over one thread on 28-count linen. On the right, the design was stitched on 7-count Monk's Cloth. The same Christmas Hearts Pattern was used for both designs.