From Freelance to Agency: Advice for Growing Your Team

From Freelance to Agency: Advice for Growing Your Team

Freelance to Agency: 2016You've been doing this freelance thing for a while and have an itch to turn it into a real agency. Maybe you already have a partner or two, and are splitting the workload between you. You've got a base portfolio and are actively networking/producing content in your space. You've already started to see some inbound and referral leads. People are impressed with your work and deals are closing on a regular basis.

Things are starting to click, but now you need to worry about how you're going to start delivering on all of the work that you're selling. You have to consider your options when it comes to meeting these new work demands. Aside from working 100 hours per week, what are your options? There are a variety of ways you can begin building out a team to assist with this workload.

This article explores the why, who, how, and where associated with building a team that's successful for your business.

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Asking why?

The most important thing to ask is whether you want to grow. This might seem like a silly question, but a freelancer charging $100 per hour only working 25 hours a week can net a pretty nice income, assuming the work is steady. Making the leap to growing an agency is actually quite costly at first. As soon as you start introducing more people to the mix, your margins quickly drop from 100 per cent to 80 per cent, 60 per cent, 40 per cent, etc.

That being said, growth means you have the ability to take on more work as a whole and potentially increase your total net income, even if your margin goes down. If you lose 30 per cent margin, but triple your hourly output, you go from making $100/hour to $210/hour.

The hidden costs associated with growing your team, however, can add up substantially. Although you might be able to take a fair amount of client work off your plate, that free time will quickly be filled with managing your new team members, recruiting future potential team members, documenting processes to ensure consistency across delivery, researching and implementing new platforms to improve collaboration, and generally dealing with an increase in communication.

Recruiting recommendation: Before making the decision to grow your team, reflect on the type of organization you want to run. Evaluating the cost and potential earnings of staying freelance, versus starting an agency, is an important activity to run before making any big moves.

Asking who?

When you've made the decision to grow, the first thing to consider is who you are actually going to hire. This extends beyond the individual and into the actual role itself. Do you start by hiring designers, developers, office admin, or something else?

When you're first getting your agency up-and-running, one of the most valuable positions you can hire is a project manager. First, they ensure your projects get done efficiently. With someone whose whole focus is on managing scope and communications on a regular basis, you're more likely to see your projects run smoothly. 

Second, they take the bulk of client management off your plate, freeing you up to focus on 'growth activities' for the business. Third, they can be utilized as secondary sales people. Project Managers keep clients happy, and happy clients means repeat and refer business.

If you find that you’re more of a natural project manager yourself, and would rather step away from day-to-day design or development work, then perhaps finding a designer or developer would be a great first step.

Depending on how you decide to bring on another ‘production member,’ you’ll want to be aware of the potential inconsistencies that can emerge across your portfolio and code base, as different designers and developers approach projects in their own way. Establishing clear policies around delivery is essential to ensuring projects not only arrive complete, but are supportable going forward.

Recruiting recommendation: One way to determine which role you should hire first is to base the decision on the biggest gaps within your current practice. These gaps can be identified by listing all of the tasks you handle on a day-to-day basis, and evaluating each based on what you enjoy, what you're good at, and what drives growth in the business. You want to keep your plate full of primarily tasks that answer yes to all three questions. Any tasks that do not, consider whether they can be grouped into a single role that would be handled by your new hire.

Asking how?

Regardless of whether you've decided to bring on a project manager, designer, or anyone else, a big thing to consider is how you'll actually do so. Gone are the days where you're limited exclusively to W2 employees. There are a variety of ways you can consider growing your team, each with their own benefits and shortcomings.

Here are a few options to consider:

1. Contractors

Contractors or freelancers are the modern-day mercenaries of the agency world. They're experts in the services they provide, and join a project to execute that specific skill set. When a project has a very clear problem to be solved, often an experienced outsider, who can jump in to solve that particular challenge, is an ideal, albeit temporary, addition to the team.

Find the right contractor where their services are in-demand on a regular basis, and you might have someone you can keep on your bench and pull in whenever necessary. Depending on the objectives they have for their practice, your work arrangement can easily be negotiated. Hourly, project-based or retained services are all options, each with their own impact on margin to consider.

Pros: Cons:
Flexible Not invested in agency growth
Cost only incurred as needed Can be a flight risk
Expert specialists

Often higher hourly costs

2. Employees

The bread-and-butter of most agencies, the traditional employee forms the foundation for your team. Showing up day-after-day, and committed to the growth of the agency, employees help build consistency in your practice.

Depending on their background, they may come in and hit-the-ground-running or might require a bit more training before they can really own their role. The right employee, however, can provide the necessary, reliable help to ensure your agency's growth continues for the long-haul.

Pros: Cons:
Invested in agency growth On-going overhead
Can establish consistent practices within firm Upfront training/on-boarding
Adds to company culture Requires more management

3. Agency partnerships

Depending on how specific your service offerings are, one option for handling growth is to partner with other agencies to help with overflow or subcontracted work. This is a very popular model with mega advertising agencies who depend on smaller, more specialized firms to tackle specific portions of a given project. The same model can be applied by small agencies who want to remain specialized without passing on clients that require services beyond their internal capabilities.

Pros: Cons:
Ability to retain clients with larger project requirements Often very expensive given their overhead
Provide additional expertise Conflictcing processes/communication standards
Potential referral source Too many cooks in the kitchen

4. Crowdsourcing

Something that has become increasingly popular in the last five to ten years is the idea of crowdsourcing. Marketplaces like 99Designs, Upwork, and Tongle allow you to place a request for a service to their community and receive 'bids' from contractors around the world on your project.

Unlike a traditional contractor model, crowdsourcing often allows for very limited direct communication, as activity is funneled directly through these marketplaces. The benefit, however, is that you get a much broader reach on fulfilling an assignment and can often see samples of work before you make a decision on who to hire.

Pros: Cons:
Try before you buy Lack of direct communication
Global reach Often lower-skilled labor
Low-cost Potential flight risk

 

Recruiting recommendation: Realize that there are many options for growing your team. Don’t be afraid to experiment with each to see what produces the best possible candidates for your firm.

Asking where?

Each of the options above have their own unique sources to find talent. Below are a few recommended resources to consider:

1. Finding contractors

  • Existing contractors: Contractors jump from one project to another and have likely collaborated with other contractors along the way. Ask them who they've enjoyed collaborating with and see if that referral turns into a new potential contractor for your own projects.
  • Shopify Experts: If you're specifically looking for help with Shopify-related work, consider perusing their Shopify Experts directory for independent experts that might be able to provide contract work.
  • Craigslist: It's a bit of a 'diamond in the rough' situation, but Craigslist is still a viable options for potential contractors, especially if local collaboration is a requirement.

2. Finding employees

  • Referral programs: Incentivize existing team members, clients, and your network by offering an 'employee referral program' where they'd receive a commission for a newly-hired employee they refer. Most people have at least a few folks in their network looking for new opportunities, this just gives them an incentive to keep you top-of-mind.
  • LinkedIn: A natural go-to for finding potential employees, LinkedIn provides both advanced searching as well as advertising capabilities to find candidates that meet very specific profiles.
  • College recruitment: When filling roles that don't require as much seniority, consider calling up your alma mater or local college to tap into the career placement opportunities they have within their school for outside employers.

3. Finding agencies

  • Agency directories: There are a number of directories such as AgencySpotter that provide profiles and reviews of agencies across the globe.
  • Shopify Experts: Similar to finding contractors, if you're looking for Shopify-specific help, take a look through their Experts Directory for other potential firms.
  • Award websites: If you're looking for top-tier partners, consider checking out recent award winners on websites such as Awwwards.

4. Exploring crowdsourcing

  • 99Designs: One of the earliest and most established design marketplaces, 99Designs supports almost any type of design project.
  • Upwork: A huge marketplace spanning a variety of potential services, Upwork allows your to connect with freelancers from around the globe.
  • Tongal: Particularly popular for video-based work, Tongal is a fast-growing crowdsourcing resource.

Recruiting recommendation: Don’t limit yourself to a single source of talent. Experimenting with different recruiting methods can help diversify potential team member options and expand your chances of success.

Making the decision to grow

Now matter how exactly you decide to grow, one of the hardest things to do is actually let go, and trust those that you've hired to help you. Delegation is the key to success in making a multi-person agency succeed. Just as in the work you produce for your clients, successful collaboration comes down to one primary thing: expectations management.

Failure is always a product of either failing to set clear expectations or failure to meet expectations that have been clearly set. Establish clear expectations early in the relationships you have with your contractors, employees, and partners, and hopefully you'll see investing in the growth of your team does lead to the successful growth of your business.

You might also like: How to Grow From Freelancing to Founding Your Own Agency.

About the Author

Ross Beyeler is a serial entrepreneur in the technology space with experience ranging from digital marketing, business development, and strategic management. He is the founder of Growth Spark, a design and technology consultancy focused on helping eCommerce and B2B service companies become more efficient and more profitable.

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