Should I turn my freelance work into an agency? - Freelancer Masterclass
Should I turn my freelance work into an agency?

Show Notes:

Should I turn my freelance work into an agency?

  • If you want to do selling instead of work
  • If you want to learn how to abide by employment law
  • If you really like processes and organization
  • If you want to find bigger clients

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RAW TRANSCRIPT:

Get ready for freelancing strategies, hacks and tactics to help you skyrocket your success brought to you by Freelancer masterclass calm. You’re listening to freelancing school with your instructor Mike Volkin

Welcome to freelancers school. I am Mike Volkin, lead instructor Freelancer masterclass. And in today’s episode, we are answering the question Should I turn my freelance work into an agency? I had a freelancer the other day and this is probably the sixth or seventh time it does happen. I had them tell me that they want to be in they want to start an agency and I asked him how much freelance work they experience they had and they said nothing. I’m not a freelancer. I just would like to jump right into being in an agency and I in so many words told him that that was kind of ridiculous. You need to not to be a freelancer first before you develop an agency. But what I would suggest is if you really want Understand how to turn turn freelance work into an agency, get your freelance experience and then you have to think about four main problem points at agencies usually encounter that free freelance work doesn’t so much encumber. So you may, you may encounter some of it in freelance work, but not all of it. So let’s go ahead and go through these four points. First of all, when considering if you should turn your freelance work into an agency, you want to consider if you like the selling part of being a freelancer, do you like sending out bids and quotes? Do you like responding to job poses? Do you like prospecting? Do you like discovery calls? Because if you own an agency that will be 90% here job. I remember when I made the switch over to my agency 800 pound marketing. I felt that I was more of a I felt that I just bought myself a sales job. Very little marketing work. You know, my passion is marketing, but now I’m in the business Making sure clients came through the door and stayed longer. Because I now have a staff to support. So you have to consider that if you like to sell because if you don’t like to sell, then you’ve got a problem. Because even if you hire you might think well, I’ll just hire sales staff Well, you know, honestly, young agency that’s just getting started. You are the sales rep. There’s You are the one that can bring in the clients. It’s your experience that does that you can’t really have an outside sales rep do that for you. Technically, you can, but it’d be very ineffective, at least for a while. The second point I want to bring up is do you want to learn how to abide by employment law and all those other things that go along with carrying employed employees. Now you might think, well, Mike, I could just have an agency and just have it filled with independent contractors. Well, technically, it depends on what state you’re in because in my state, California that is next to impossible to do. In California, we have 21 points of checkpoints that determine If contractors and employee in New York is even worse, actually, but California I mean, if you give them as little as a process to manage something like teamwork, we talked about teamwork, a project management management platform. If you give them something to log into a log their work, they’re considered employee, if you give them an email address with your company name, if they’re considered an employee, I mean there, there’s things you have to really be Be careful of. And I’m telling you that the fines associated with being caught treating someone as employee but paying them as a contractor is not worth not worth it at all. Okay? The profit margin for an agency is about 60 to 40 to 60%, which means that, you know, as a freelancer you could be making a lot more than that. So your profit margin will go down, but as an agent, I’m sorry, but as an agency, you should be bringing in bigger clients. So you want to consider if you want to turn your freelance work in agency, you might be recording Hiring yourself to take on bigger the clients that we normally do. Okay, that’s another little tip. Do you really like processes in organization? That’s another question I want you to ask yourself. If you want to turn your freelance work into agency, your agency has to run like a machine with freelance work, you can be a little disorganized, to be honest. I mean, you could take client and you could do a little bit of work here and there, you collect a check, or, you know, take a credit card payment whenever you feel like it. But honestly, as an agency, you have to have a structure and a process for everything, document everything, log everything. If you’re late with invoices, your clients will pay late if at all. And to be honest with you in terms of processes and organization, if you fall behind or don’t have good processes in organization, you are open to lawsuits, and a lot of liability. So if you are in love with processes and organization and by all means and agency might be the way to go. And in fact if you’re in love with processes organization and selling an agency might be your strong suit suit.

And the last thing I want to give you is something we just touched upon recently is if you want to find bear clients, it’s really hard to find to run an agency with small client with small paying clients month to month, if you want to run it in the US it is. Now you might think, Well, I know an SEO agency in India that charges a monthly retainer $500 and and they take on clients for $500 a month and why can’t die. Yeah, that’s that’s called economy of scale that that won’t work in the US. Really, for me in living in California. Having anywhere from three to six people my agency, I would say that the minimum contract that’s even worth your time taking on a $3,000 a month. Doesn’t really matter what industry you’re in in that regard. So if think that if you can’t take on a multiple $3,000 month contracts at once, then it’s it’s really not worth in processing, training a clot your employees on the call And having the meeting setting up the reports all that stuff. I mean, that’s really just like a breakeven point just to keep the agency of flow is $3,000 a month per client. So consider that so if you’re considering turning your freelance work in agency, I hope these tips help. Thanks very much.

Thank you for joining us for freelancing school. Be sure to subscribe and get the latest updates on the show. Go to freelancing masterclass calm to become a master freelancer.

 

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