• The Agency Architect
  • Posts
  • Scaling your freelancer career: How the agency model solves your pain points.

Scaling your freelancer career: How the agency model solves your pain points.

Like many others, I began my agency journey as a side hustle while working in-house for a brand. I had a business partner, and the side hustle had reached a point where it was earning slightly over £10k per month. We had 6-7 clients consistently for 3 months.

During this period, I’ll never forget the excitement of taking half a day off from my regular job and meeting my business partner at The Hoxton near Old Street. We would work flat out on our side hustle for the rest of the day, yet there was still so much more to do. At that moment, I realised that our side hustle had transformed into a business that could sustain us working full-time.

At this point, I was ready to quit my job. However, I was finalising a mortgage application and needed the full-time salary if the application and flat fell through. I had already drafted my resignation letter in emails for over 2 months. When I received the keys to my flat, which fit the lock, I hit send on my resignation email.

Then came a painful 3-month “notice period” where my mind was focused on my business, but I had to show up for work every day to complete my notice period and assist in hiring my replacement.

During the Christmas period, my wife and I travelled to Thailand. During this time, I wrote up essential SOPs, our vision, and values on how our agency could compete. The origins of this document are still shared with staff members today when they join us, albeit in a slightly more jazzy presentation deck format now.

This took me to January 4th, 2019, my first day working full-time at my agency. However, I quickly realised that it wasn’t an ‘agency’. It was more like two people working together and freelancing together. After about 4 hours of work, something felt off. The joy I once felt from my days at The Hoxton was no longer there. I began envisioning what the future held for me in the next three days, months, and years. I didn’t like what I saw. Not one bit.

Four days later, I decided that this solo freelancing gig wasn’t for me. We needed to scale it, and we needed to do it quickly.

Fast forward 3.5 years, and we sold the business to the staff in a unique EOT model. This business was now 40 people and closing on £3m revenue.

It was the best decision we’d ever made.

But I can promise you it’s not for everyone.

If I’d stayed as a solo freelancer, I would have probably made more money in the short term, but I knew within the first week freelancing wasn’t for me.

There’s nothing wrong with this, and there’s nothing wrong with the alternative, either.

There’s no right or wrong decision as long as you are happy doing what you are doing daily, and it brings you joy.

Discussions around ‘right or wrong’ are only relevant if you don’t dedicate time to learning and understanding if scaling to an agency model is the right decision for you. If you make the wrong decision, you become miserable and stressed. This then translates to your staff and your culture, resulting in poor work, which makes you sad and stressed in a vicious circle.

In the first stage of my course, I address this scenario by delving into “understanding an agency model”. This allows solo freelancers to better understand what they can expect when it comes to scaling and helps them determine if it’s the right path.

I have also attempted to do a similar scenario based on my thinking from back in 2019, which matches what I know now as an owner of multiple agencies.

The lefthand side outlines ten pain points you will experience as a solopreneur. The righthand side shows how the agency model then solves these pain points.

Limited Capacity for Projects

As a solo freelancer, there’s a cap on how much work one can handle. This limitation can be addressed by an agency model, which allows managing multiple projects simultaneously by delegating tasks to team members.

The way I think about this is that you’re ambitious enough to get to a point where you no longer work for someone else, and you’ve made a living on your own. That alone is impressive.

If you get to a point where you have to turn away work, you are clearly doing well and in demand.

So my question to you would be: Why limit your ambitions? & why leave money on the table? If people want to pay you for your expertise, you must take advantage of that. The above statement reflects an optimistic way of thinking.

However, if fear motivates you, it is essential to recognise that in our fast-moving world, the methods and practices of your discipline may become obsolete within a few years. Therefore, it is necessary to capitalise on your skills and adapt as quickly as possible.

Income Inconsistency

Freelancers often experience fluctuating income due to the project-based nature of their work. An agency can provide a more stable income through a diversified client base and ongoing contracts.

Based on my experience, clients were hesitant to sign long-term contracts when it was just me and my business partner. The majority of our clients opted for monthly rolling contracts.

However, once we hired just two staff members, we had a conversation with all our clients. We explained that we now had fixed costs to cover and needed a level of commitment and stable income. Fortunately, they all understood the situation as they were business owners themselves and agreed to sign a 3- or 2-month rolling contract with us.

Over time, the larger the team gets, the longer the contracts you require need to be. Now, when we discuss leads with clients, we’ll be going in with 12-month options only, and some will negotiate us down to a 6-month.

Another point to consider is you will likely earn more money as a solo freelancer in the short term. As you scale an agency model, you must reinvest your profits into growth. Only after stabilising will you be able to generate a strong income for yourself. Alternatively, you may choose to sell the agency, potentially earning a significant amount more. I discuss these options and scenarios in my course.

Expertise Limitations:

Solo freelancers might be highly skilled in one area but may lack expertise in others. An agency can offer a broader range of services by employing specialists in different fields.

Using my experience as a reference point, a prime example of this in the realm of SEO is link building. SEO, broadly speaking, is divided into three skill sets: Technical, Content, and Links. I excelled in the technical and content aspects, with a particular focus on strategy.

I have overseen a team of SEOs throughout my career, including someone skilled in link building. It is an entirely different skill set compared to traditional SEO.

However, when my business partner and I were freelancing individually, we didn’t have the skillset to build links, so we did not offer it as a service. Fast forward to today, and we now have a 12-person Digital PR link-building team, generating over £1.2m annually.

As I mentioned before, the day-to-day management of SEO had lost its appeal to me. While I still recognised the value of the channel and loved the concept of SEO, I was no longer interested in the daily tasks. Transitioning to an agency model has allowed me to learn and acquire a diverse range of skills and experience in various business areas, including finance, HR, legal, operations, sales, and marketing. This has opened up a new career path for me, involving coaching agencies, investing in them, and focusing on agency work’s non-disciplined aspects.

Work-Life Balance Issues:

The burden of managing all aspects of the business can lead to work-life balance challenges for solo freelancers. In an agency setting, tasks like marketing, client communication, and administrative work can be distributed among team members or outsourced.

This topic is controversial, and only now, after nearly five years and 40 team members, am I in a position to get a solid work-life balance.

You need to build and scale your agency correctly; we 100% did, at the 2-year stage, it was probably in a good place for us to step back. However, this was when COVID hit, so there was way too much uncertainty worldwide for us to take a step back.

As an agency owner, you can only achieve proper work-life balance (if it even exists, which is a topic in itself!) if you consciously build your agency to be a lifestyle business or once it reaches a size of around ten people. At the 10-person stage, there are enough individuals to form a hierarchy, which means you will only need one or two people reporting directly to you.

The main difference is that, with an agency model, there is an option to step away eventually. However, as a solopreneur, you are essentially selling your own time, so there is no easy way out as the agency model provides. The only alternative would be to outsource all tasks to freelancers, which comes with risks.

Client Acquisition and Retention

Solo freelancers might need help with marketing and client retention. An agency typically has more resources and personnel dedicated to marketing and client relationship management.

This is another scenario for freelancers. If you want to maximise your income, it means fully utilising your available time at the highest rate. However, you must be careful not to bill too high, which can put you in the agency bill rates zone. Clients then have the alternative of hiring a team for the same cost as just one freelancer.

By maximising your time, you may have limited time to dedicate to effective marketing. While it’s easy to do a tweet or a social post once a week and check it off your Asana to-do list and get a unicorn shooting across your screen (if they still have that feature?!), doing impactful marketing that stands out and brings in B2B clients requires consistent dedication to a strong strategy across multiple platforms.

In my course, I recommend that agencies hire an in-house marketing role at the start-up stage when their team reaches five people. This will allow the owner to free up enough time to support the full-time marketing hire. Effective marketing requires continuous time and resources.

As a freelancer, it’s common to rely on word-of-mouth referrals heavily. However, if you become fully booked through natural referrals, the referrer may start looking for another freelancer (your direct competitor) and may not come back to you in the future.

Scalability and Growth Limitations:

There needs to be a limit to how much a solo freelancer can grow their business. An agency model allows for scalable growth by adding more staff and resources as the business expands.

I mentioned two points related to this in the previous sections. As a freelancer, you cannot continually raise your day rates, as it would push you into a pricing range where clients may choose to hire in-house or use an agency with a team of 2-5 people.

Therefore, you are limited both in terms of price and time.

The agency model overcomes this limitation. You can hire additional staff members to increase the agency’s output when you reach maximum capacity.

Furthermore, as you consistently deliver good work, you can gradually increase your retainers and negotiate longer-term contracts.

To truly achieve scale in the freelancing and solopreneur world, you should focus on the approach taken by Justin Welsh. This involves diversifying your income through courses, sponsorships, and templates. However, it is worth noting that most successful solopreneurs earn income through consultancy or group course sessions. They often have a large following, allowing them to sell a course to 10,000 people for £50. Unfortunately, this level of success is not easily attainable for most freelancers, especially considering the time constraints mentioned in the previous section. Scaling marketing and social media to such heights requires significant time and resources.

Risk Management:

Freelancers face high risks if they cannot work due to illness or other reasons. An agency has a team that can continue operations, reducing the risk of income loss.

I have experienced this when working with freelancers for The agnc or my agencies. A freelancer often would commit to delivering work on time and meeting expectations, but I’ve had countless experiences of illness or delays due to over-capacity and poor planning.

Illness is an unfortunate reality of life, but in business, having a contingency plan or backup is crucial. However, most freelancers cannot have such measures in place because their business relies solely on them. As a result, their reputation suffers.

Professional Isolation:

Freelancing can sometimes be isolating. Being part of an agency creates a team environment, offering more opportunities for collaboration and professional networking.

There’s nothing better than celebrating the highs with your team. Winning an industry award or delivering a big project to a client you’ve worked on for months.

Freelancer or solopreneur route: once you deliver the work you celebrate internally, you may treat yourself, but you will return to the next project straight back on the hamster wheel. Over time, this can seriously impact your motivation and drive.

Administrative Overload:

Solo freelancers often spend significant time on administrative tasks. An agency can have dedicated administrative support, allowing creative professionals to focus more on their expertise.

It is possible to use a virtual assistant to an extent, but on the agency side, you build an operations team or invest in automation to reduce the admin workload on the founder.

As a freelancer, the time spent on admin could be spent working on client work and earning more income.

Lower quality Clients

Finally, and potentially the most controversial point on the list, is the quality of your clients. As a freelancer, you often work with clients and projects that either agencies don’t want to work with or that the clients themselves can’t afford an agency.

A similar scenario can be applied to agencies; they only serve clients until the clients are ready to bring the services in-house. At that point, it becomes your job to position your services around the in-house team they create. Even if the clients get your services in-house, the in-house team may still require a minor part of your service, typically one-off projects, a strategy review or set deliverables.

When you first start out, whether freelancing or as a small agency, you naturally work with small businesses. These small business owners can be challenging to work with at times, as they often expect a lot while paying very little and can be erratic. However, you can work with larger businesses and brands as you scale your agency and become more successful.

When we started our agency, I always found small business owners challenging to work with. They had a mentality that their hard-earned money was leaving their pocket and going into ours, so they constantly wanted to know what was going on and what they were getting in return and always wanted more. In contrast, larger businesses work with budgets set by a finance department and tend to focus more on hard metrics. They are less personally, emotionally and financially invested compared to a founder.

So, the reality for freelancers is that you are highly likely to work with clients at the bottom of the food chain. Even if you do an excellent job, the client will eventually want more, whether it’s more resources or a larger team you can’t provide. This is where an agency comes into play. Instead of resisting the idea, consider making that agency your own agency.

Building an agency is a challenging task. On a personal level, you will likely take less money out of the business as you reinvest profits into growth. The plan eventually will be to own an asset that far exceeds any freelancer.

Once built, you have two options: you can either turn this asset into a lifestyle business, where you can step back while still earning an income, or you can sell it for a large sum of money.

The way I saw it, as a solopreneur, I already had over 10 impressive case studies that showcased my expertise in my discipline (SEO). The next challenge was to train a group of individuals in my approach to SEO and enable them to develop their own case studies. I was responsible for selling this successful work and building a much larger business. This is the challenge of the agency model. It isn’t easy because you are now transferring your thinking and way of working to others. It requires a broader skillset and mindset than being a solo freelancer, but my god, it’s rewarding when it succeeds!