How To Scale From Freelancer to Agency (Increase Income, More Time With Family)

I'm going to walk you through some of the basic steps to transition from being a solo freelancer, to having an agency so that you can have more time with your family. 

This is for any freelancer who has been doing it solo for a while, and they've hit a point where they can't really increase their income any further because they've maxed out their hourly rate. They've hit a point where they're not going to be able to sell a higher hourly rate than they currently are based on what they're doing as a service. 

And they're wondering, “okay, how do I increase my income further if I can't increase my hourly rate?”

 We're going to cover a couple of ways to do that, focusing on building an agency.

You might be intimidated by the thought of building an agency. You might think that you don't want to have to create a huge agency. You don't want to hire employees. You don't want to have to get office space. 

It's not going to include any of that. 

Trust me when I say it's much simpler than you think to start forming an agency and building up a team of people so that you can exponentially increase your income. 

You will hit a point where you have to have a team to keep increasing your income. Every service out there that you could be doing as a freelancer has a max that people are willing to pay for that service when you are just soloing it. 

So like for me, I was video editing and I hit a point where I was starting to charge around 75 an hour. And it was difficult to go beyond that as a video editor.

The first thing I did was I started to change what I was offering as a service. I moved more into consulting on the video strategy side, and that helped me to go past 75 and even go past a hundred as a consultant. But I was still trading just my own hours and doing all the work that I was paid for.

Even that strategy side hit a point where I couldn't really increase my income any further unless I increased my hours, but I've always had very strict rules with the amount of hours I put in to maintain life work balance. The very reason why I got into freelancing to begin with is so that I can have more time with my family. So I don't like to work more than 25 hours a week.

I'm usually anywhere between 20 and 25. And once I start to tip over 25, it starts to interfere with the time that I need to be spending with my family and on personal life activities. 

So you're a freelancer, that's at this crossroads right now. What do you do? What are some of the first steps? 

Well, the first thing that I did was I started to list out all the activities that I was doing in my business. 

And what I was doing at the time was editing videos and uploading them to clients’ YouTube channels. I was optimizing those videos, publishing them, and coming up with the strategy for my clients. 

On the flip side, I was also doing all the sales for my business, finding clients, getting on calls with them, answering emails and the whole financial side of it.

On top of that, I was also doing all the project management for all the different projects that I was working on with clients. And I was even helping with publishing the videos on their website and getting blog posts put together and stuff. 

So I started to think, okay, where are my strengths and what do I enjoy doing most? 

So my strengths were more in the strategy side. Now you have to map out your strengths, but also what you would enjoy doing most. For me, I was really good at video editing, but I knew that that's something I could easily hire somebody else to do because there's also a lot of other really good video editors. 

A big first step was that I mapped out my vision for where I really wanted to be in my business.

I wanted to get to a point where I could step away for a week or two, and my business could keep producing income, and projects would keep getting done. 

That's the biggest issue that freelancers run into: if they stop working, the income stops coming in because there's nobody else helping to run the business as well. 

Then I asked myself, “which tasks could I easily hire somebody else to do? Could I trust somebody else to do it?”

The first one I listed down was video editing. The second one was writing. I was writing descriptions for people's YouTube videos, but in all honesty writing isn't my biggest strength. I learned enough to be able to get by with doing it, but I knew that there were people out there who are experts in writing.

Even though video editing was a strength of mine, it wasn’t something I wanted to keep doing. It was very time consuming, and one of my biggest bottlenecks.

The biggest block to being able to take time off was that I had to keep editing all these videos coming in that clients needed to get done 

In order to really become a CEO of my company, instead of being the technician and the one doing all the actual work for the clients, I had to start taking these first steps.

So I started listing out which roles I could hire first. 

The first person I hired was a writer because that was something that I knew I had a weakness in. Not only did I not want to do it, it also wasn't one of my main strengths. So that's what you should be hiring out for first.

Because as long as you keep doing something that's not one of your strengths, it's just going to make your business suffer in the long run. 

So I hired a writer and that started saving me a couple hours a week because someone else was writing all the descriptions for the YouTube videos that I was doing for clients. And then I hired a video editor soon after because it was the two things that I knew I could easily hire somebody else to do. 

Let me clarify what I mean by hire: I was hiring freelancers. That's really important when you're transitioning from being a solo freelancer to running an agency. 

You need to hire freelancers, not employees.

You're going to have other people saying, “you can't rely on freelancers and yada, yada, yada…” but there are ways to hire freelancers where you can still have a pretty good availability and you can rely on them. 

You do have to do things a little differently, but it gives you way, way more flexibility in being able to scale your business when you hire freelancers. because you're only paying for the work you need. 

One of the biggest things that kept me from initially thinking about hiring people was that I thought hiring people means you have to hire an employee. It sounded very intimidating because I didn’t know what I would do if my business revenue dropped in a certain month.  

I'm still kind of in that fluctuation mode and I'm still growing a very new business. I didn't want to have to pay an employee's salary when I don't have work for them to do.

I worried that if my sales kind of slowed down for a given month or I had some clients drop out and then I didn't have work for that employee to do, I would still have to pay them.

That was really a scary thought because then it meant I might have to fire them. And then I’d be back in the same situation and need to rehire them again when I have more work for them to do. 

That’s why I intend to have a one hundred percent freelancer workforce for a very long time. 

Maybe at some point it might make sense to have a couple of roles as employees, once I get much larger. But for now, since I'm a small agency, I have about eight different freelancers that are working on my team and it's going to stay that way. I'm going to keep hiring freelancers. 

The way that you have the reliability you need from them is you try as much as possible to keep sending them work consistently every week. 

The more consistent you are in sending them work every week, the more they're going to make you a priority.

They're going to block out time every week specifically for you because they're expecting you're going to be sending them work. 

That way, you're not going to be in a situation where you have work for them to do, but they're not available because it's been several weeks since you've sent them anything. So now they've gotten other clients to fill up their schedule. 

So be very diligent and always try to find work for them on a weekly basis in order to keep them on your team. Also, be very realistic with them as far as how many hours you expect them to put in to start. It might only be one or two hours a week but just make sure that they understand that and that they're okay with it.

You can also build out the vision for them, and let them know that you’re a growing business. Tell them: “As my business grows, I expect that I'll be able to give you more and more hours over time.” 

Start making those first couple of hires of the things that are the easiest to have somebody else do. 

Also, It’s good to start with something that you can more easily trust somebody else to do. Because you're going to have things that you hold on to that you don't want to trust somebody else to do. At some point you will need to let go of those as well, but start with the easy step. Hire for the things you’re not good at, and the things you don’t want to do. 

Then go after the tasks that you might be good at, but you don't want to be doing. The thing I was good at, but didn't want to keep doing was video editing, so I hired a video editor. 

Now, looking back, I should have made hiring an administrative assistant one of my first hires. 

However, it was hard for me to let go of some of that administrative stuff, so I hired a writer and a video editor first. I think that’s okay, but just know that an administrative assistant can really help you out with all the small tasks that take up time. 

They’re also called virtual assistants and there's lots of freelancers who do this kind of work, so you should have no problem finding one that can put a few hours in per week for you.

They can be that person that takes on a lot of the random tasks that you don't want to be doing anymore to keep your business running.

They're almost like a flex person. Every week you might have something different for them to do.  Whether it's managing the client relationship, looking for new clients, helping with sales, or just helping with random tasks like posting a blog post. 

My admin assistant helps with things related to uploading, optimizing, and publishing YouTube videos, publishing blog posts, and managing some tasks on our task management app. My goal is to keep offloading more and more of the admin tasks that I do to her. 

It's a learning process for me to let go of things that I've been used to controlling for so long.

It's going to take time for you to figure that out for yourself as far as what you're willing to offload. But the more you continue to offload to somebody else, the more you'll be able to transition into actually running the business and doing less and less of the actual client work.

Once you make that transition, you’ll be able to actually step away from your business and it will keep running without you there for a few days or a week or two. 

I'm still in the middle of this process. I'm still nowhere near where I want to be with having a really smooth machine with a larger team who takes care of everything. But it takes time to build it up. 

It also takes time to revamp your pricing structure because that's another big part of making the transition.

You're going to have to start charging clients in a very different way, because you're not just covering the cost of you. You're covering the cost of the people on your team that are also putting in time and hours. So you have to make sure that you factor that in. 

One of the easiest ways to adjust your pricing structure to accommodate transitioning into an agency is to start charging flat rates rather than charging hourly. 

Like maybe you're charging a weekly rate based on a specific set of services. And that weekly rate covers the cost of all the people in your team that are going to be involved in that project. It covers the time that you're putting in, and what you want to be getting paid for that time. Then you add in profit on top of that.

For example, let's say a project costs a hundred dollars to finish. That looks like this:. I pay a video editor $50. I put in a few minutes, so I want to pay myself $20, and I pay a writer $20 to do the captions. That's like 90. And then I pay my admin assistant $10 for a few minutes of time that they're spending regarding the project. 

So the actual cost is a hundred dollars, because we're a service-based business. We don't have materials that we're buying as part of the project. It's just all service. 

I'm not going to charge the client only a hundred dollars even though my time is being covered. 

I have to then add in profit on top of what it costs to pay my team. So I like to at least add 50% on top as profit.

So if it's a hundred dollars for the cost, I'm actually charging 150. 

That $50 not only becomes profit, that also helps me to grow my business and invest in its growth. It can be extra income for myself as well to raise my income beyond just what I want to be getting paid per hour. And it also creates a buffer in case the project grows at all. 

For most of my projects, I establish a fixed rate so it's not going to grow. I also establish what activities we’re going to do so that the project cannot grow. 

I make sure the expectations are very clear to the client that if they want to add onto this project, then we need to increase the price. I don't want to end up walking away with much less. However, the extra helps buffer for any unexpected changes, like your video editor taking longer than usual. 

I'm going to do another post on figuring out the exact percentage of buffers you should build in that will dive in deeper into figuring that out. So I'm not going to get super detailed here, but overall that percentage will fluctuate. 

Make sure that you are building in some profit. 

It's okay if it's 10% or 20%, 30%.  There are different factors that affect what you end up building in, but you just want to make sure that there is profit built in. 

Those are just some of the things to think about when it comes to scaling your business from being a freelancer to an agency. Obviously that doesn't cover everything, but I will for sure have more content to help you out in this process.

Make sure you let me know if you want more content regarding this subject, because there's a lot of steps. What I told you today will help you get started, and  will give you those first couple of steps to help transition into making that first hire and that second hire.

 And again, a virtual assistant is always a great place to start because they can kind of do everything. 

If they have a variety of different skills, they can kind of take on whatever you want them to take on. And then you go after various creative roles and technician roles so that you can keep stepping away more and more from your business. 

That helps you to then increase your income and ultimately grow the business larger. 

Until next time.