It's an awesome problem to have: your freelance business is now generating enough word-of-mouth to keep you working for a long time. In fact, it's given you more clients than you can possibly handle within a 40-hour workweek. Sure, you always have the option of turning down clients, but what if this does nothing to stem the tide of incoming work? The obvious solution is to delegate work to a cadre of freelancers like yourself, and turning what was once a humble solopreneur business into a freelance agency, managed by you.
But before you start thinking this should be easy as cake, determine if you have what it takes:
- Finances: Do you have the finances to pay your freelancers while still paying your rent and giving yourself a salary? Is there enough runway to keep your agency afloat in case clients don't come through or are late with a payment? If you will collaborate with professional services, do professional service corporations have limited liability when it comes to finances?
- Confidence: Are you confident enough, not just in your craft but also your managerial skills, to transition into the role of team leader? How about your business project management fundamentals?
- Mindset: Are you ready to fail? Are you prepared for more complex work processes once you bring in more people? Are you ready to do a little less hands-on work yourself, and invest more time in marketing, finding, and retaining customers?
If the answer to all three questions is a resounding yes, then it's time to start.
From Solopreneur to Freelance Agency: The Main Steps
Get the Legal Stuff Done
The first order of business is a legal one: consider the pros and cons of becoming a limited liability company or an LLC. It's a business structure that will give your freelance agency limited liability. This means if your LLC is sued, then the claimants are suing the agency, not you as its owner or any investors. The LLC structure is easier to establish and simpler to maintain than a corporation. And it gives your agency pass-through treatment of income for tax purposes. Added bonus: it gives your agency the credibility of being a legal entity.
Read this for concrete steps on setting up an LLC. And here's a list of legal resources for your agency.
Gather the Talent Together
If you don't already have a network of freelancers at your disposal, then your next step will be finding the type of talent that you can build a business on. And that's a struggle that every founder and business owner has. But outside of doing the legwork yourself to hire people in your area, you could opt to hire fellow freelancers. And there is a huge number of websites where you can find them, including popular choices such as Upwork, Guru, and Fiverr. The trick is finding people who won't flake out on you and who produce quality work. Which only means, you've got to try different freelancers till you find the ones who meet your qualifications. Stick to those with high ratings and customer reviews.
Land the Big Clients
Finally, before you reveal your superstar lineup and start creating award-winning work, you will need clients. And not just the small, one-off projects that you used to take as a solopreneur. You will need to find larger clients with budgets who can afford to pay your team. Start by wooing your existing client base, to see if they have larger projects in their pipeline. Ask them to spread the word to their networks. Double up on your marketing efforts in order to keep new customers rolling in.
Choose the Right Tools
The final point here is to use the right tools for your agency. Sure, there are a ton of free tools you can use. But always look for, and test, those that make collaboration seamless. You're looking for tools that cut down on admin tasks, so that you have more time to run the freelance agency, or market to prospects. Tools that make communication easy. Tools that allow work to progress no matter where your freelancers are. As such we suggest you start with these three categories of tools:
- Work management tool: Wrike for planning and managing all projects
- Communication tool: favorites include Slack, Skype, Google Hangouts
- File storage: favorites include Box, Dropbox, Google Drive, OneDrive
Ready to Build Your Freelance Agency?
For more inspiration, watch this video interview where Matt Britton shares how he turned a one-man operation run out of his bedroom into a full-fledged, multi-million dollar agency.
If you're interested in building a freelance team that's firing on all cylinders, then download our free guide: the 7 Habits of High Performance Teams.
IMAGE CREDITS: Photo by Alejandro Escamilla on Unsplash.
