So you’ve carved out a successful career as a freelancer. The work is flowing in, and so is the money. Why would you want to put all that at risk, and go through the hassle of starting your own agency?
The simple answer is this: The longer you stay a freelancer, the more you plateau.
Your income is unlikely to dramatically improve. Your workload is unceasing, with no one to take the pressure off when it becomes overwhelming.
Your financial security depends on constantly chasing new work, and the range of projects you’re able to take in is restricted by the limitations of your personal skillset.
In short, you’re stuck in a rut.
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Hitting a wall
That’s exactly what happened to freelance web developer Craig Thompson.
“After two years of freelancing, the work was fairly consistent, but due to the nature of my work as a full-stack developer, I was never on the ground floor with a project,” Thompson recalled. “I was usually brought in after all the specification had been worked out, and therefore had little input into the architecture of the system.”
Financially, too, he felt like he’d hit a wall.
“As a freelancer developer, I could only charge so much and do so much work in a given time-span. I had to take most of the projects offered to me to make the kind of money I wanted to be making.”
Thompson broke out of this rut by starting his own web design and development agency, Flo Design.
“This allowed me the flexibility and self-determinism I had as a freelancer, along with the benefits of a broader skillset and being there at the start of a project.”
For Jonathan McNamara and Matt Kendall, who freelanced together from 2003-2007, the main problem was getting bogged down by workload.
“At first, it was just bits of work here and there, which allowed us to live the life we wanted; doing seasons snowboarding, travelling, and learning. But by 2007, we had so many project opportunities, we were doing nothing but work,” McNamara said.
As with many freelancers, we’d fallen into the trap of ‘make hay whilst the sun shines,’ because of the nagging feeling that it could all dry up at any point.
“The lack of support as a freelancer became limiting, and we were finding it hard to progress ourselves, as we were so busy doing the work. As with many freelancers, we’d fallen into the trap of ‘make hay whilst the sun shines,’ because of the nagging feeling that it could all dry up at any point.”
Rather than turn down the work, the pair decided to employ help, which meant forming a company. Enter Retrofuzz, a creative agency that helps brands grow by creating services and experiences that connects culture to commerce.
Of course, no one pretends that setting up your own business isn’t without challenges.
Administration, tax, and accounting become serious, time-consuming tasks. You also need to be a good manager of people. And just the general uncertainty of it all can be quite intimidating.
Working as a freelance software and web developer between 2012 and 2015, Laimonas Naradauskas certainly felt that stress when he founded Smarter Digital Marketing.
I wish I’d been warned about how many other skills I’d have to develop.
“I wish I’d been warned about how many other skills I’d have to develop,” he said. “I thought I knew everything about design and that would be enough. I was wrong. I had to learn how to be a boss and deal with staff. This takes a while to get the hang of when you’re used to working alone.”
Naradauskas admits he felt the fear of failure. But rather than feel restricted by it, he turned it into a strength.
“It’s what pushed me forward to make a success,” he explained. “There was no way I would fail and prove the doubters right.”
It didn’t take long to achieve his goal, and the relatively new company is already a Google Partner, one of only a few in his native Scotland.
“My advice would be follow your gut,” said Naradauskas, who also launched a logo design company, Repeat Logo, six months ago.
“If you do something that doesn’t feel right, chances are it won’t be. It’s scary, but making big decisions is part of it, and you know better than anyone what is right for you.”
Here’s something else to consider; Starting an agency doesn’t have to be a sudden big bang, where your life changes overnight. There are ways to transition gently from lone freelancer, to fully fledged agency founder.
You could, for example, form loose partnerships or collaborations with other freelancers to see how well you get on. If it goes badly, you can just cut the cord and learn from your experiences. If it goes well, you could start discussing the notion of working together more formally in the future.
Test the waters by joining forces on a test project, or by subcontracting some of your regular work to other freelancers. As you do so more and more, you will gradually move from an informal arrangement to a more formal one, in a way that feels natural and unforced.
There are no strict rules about doing any of this,. Business is about people, and everybody is different – it’s really about finding ways to work together that make sense for everyone.
For Thompson, this was a relatively straightforward process.
“I mentioned to a friend, Russ, who was a freelance designer, about the limitations of working as a backend freelance developer.He suggested we combine forces to broaden the range of skills we could offer,” Thompson recalled.
“Russ already had a limited company set up for his freelancing. I was registered as a sole trader. And so, we both cleared off the projects we had on at the time, and I became a director for Flo Design overnight.”
Thompson says the transition was a smooth one. Their respective freelance projects wrapped up around the same time, leaving the duo to work on new projects together. Income also stayed smooth, with a number of projects already lined up that they could both work on.
The pair were working out of a self-contained office in Russ’ dad’s back garden. “From there, we moved to a shared office in one of Leeds University’s business incubator units, and now we have an office of our own.”
Secrets of success
However you get there, the main worry is how to make your agency a success. For McNamara, that largely comes down to finding the right talent. But that’s easier said than done.
It's important to go to the community rather than expect them to come to you.
“It's important to go to the community rather than expect them to come to you,” he said “Doing university talks, mentoring, holding events, and giving back wherever we can has helped us forge these links, and they're all cheap to do. It’s certainly a lot cheaper than recruitment fees. We also use social media and digital channels to be active within the community in which the talent lives, and that’s led to a lot of good people approaching us too.”
The best people to work with aren’t always the ones with the best CVs, says Sam Espensen, who moved from working freelance PR, to setting up her own communications agency.
“If you’re going into partnership with other people really, really check them out,” she advised. “And trust your instincts.”
Another important element of a successful agency is, of course, getting regular work. And that means developing another new skill: marketing.
“If someone had mentioned that you have to be constantly marketing yourself, instead of just between projects, it would have given us a much easier time of things,” Thompson admitted. “Starting from scratch when one project ends has slowed us down. But we’ve now taken steps to remedy that. As a consequence, we’re more in demand than ever.”
Thompson’s advice for anyone setting up their own agency is to research the market, come up with a marketing strategy, and then stick to it. “Other than that, just keep doing what you do best, set time aside for learning new skills in your field, and just enjoy the work you do.”
Espensen adds an ounce of fear is normal, but be sure there’s a healthy dose of reality in there, too.
Be scared but not terrified, and be frugal with money for far longer than you feel you should be.
“Be scared but not terrified, and be frugal with money for far longer than you feel you should be. I’m only just getting what could be termed a proper ‘office’ four years after launching, but the money has gone to training and investment in staff, not the décor. Talk to lots of other people who already do it, find your mentors, and stick to them like glue.”
Why it’s worth it
This might all sound like one big headache, and the temptation can be to bury your head in the sand, and stick to the safety of freelance. But all the entrepreneurs we talked to make it clear the hassles are worth it.
For Espensen, it’s meant a much better work-life balance.
“I have PTSD, and suffer from bouts of crippling anxiety, and sometimes depression.This means that I appreciate how important it is to look after your mental health. I very deliberately work fewer hours than when I was freelancing,” she said.
“Owning my own agency means I can create the sort of job that feels as little like work as possible. It means having a dog in the office, working strictly from nine-to-five 99 per cent of the time, fitting in with everyone’s home lives and ambitions, and working on interesting projects. And because it’s my own agency, I can surround myself with people I respect and admire, and that make each other (and me) happy.”
According to McNamara, the main advantage has been strength in numbers.
“Seeing how you create even better work with a great team around you and seeing the team grow, is so much more satisfying that just personal progression.”
Thompson has achieved his original goal of having more control over the projects he could take on, and being able to offer a broader skillset to clients.
And for Naradauskas the biggest benefit is pure and simple.
“I like being my own boss. The best thing about running the agency is that I have the control over all decisions, and don’t have to answer to people who I thought were making bad choices.”
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Choose your path
So the path is open to you. Freelancing will only take you so far, creatively and economically, and entrepreneurship offers you one way to improve your life dramatically.
Luckily we live in an age where digital media offers endless opportunities to make money online from your passion, and online tools make it cheap and easy to get started. You don’t even need to change your life overnight; a baby steps approach can help you move from freelancing into entrepreneurship in a low-risk, managed way.
So what’s stopping you? If you do take the plunge, we’d love to hear how you get on. Let us know, in the comments below or in any of the usual social media channels.