Episode 23: Client Stacking, Your First Projects and Starting an Agency with Tim Conley
Chad: (00:00)
Welcome back to the show, “Go Back to Bed.” In today's episode, I have a special treat for you today. I'm bringing on a guest, Tim Conley. He is an expert freelancer expert agency owner, and he has a lot to share with you today regarding how to get started as a beginner freelancer, how to find those first few clients in something called “client stacking”, and he'll discuss what that is and why it's important. And then we're going to discuss how to transition from being a solopreneur, where you're the only one doing all the freelance work, to an agency where you have a bit of a team and you can start to scale your business. For those who are interested in that, we're going to discuss some tips on that as well. Tim has experienced being a successful solopreneur and a successful agency owner. And I'm really excited for what you're going to learn.
Chad: (01:33)
Tim Conley is somebody who definitely does not go back to bed to stay in his comfort zone and follow along with what everyone else is doing. He has taken the road less traveled. He has built a career around doing what most people don't bother attempting to do. So, with that said, I'm excited to welcome Tim Conley to the show. So Tim, I'd love to know, and I'm sure anyone watching and listening would love to know a little bit about how you got to where you are today in your freelancing journey. Do you want to share a little bit about some significant parts of your freelancing story with us?
Tim: (02:14)
I failed. That's how I got here. I failed over and over again. A few years ago, while I was in college, I created a startup. This is the dot com era. I had learned how to hand code websites and my buddy and I were like, “Hey, all these other young people just like us, they're getting rich on the internet and we need to do the same thing. So let's create a business.” I built the website and we worked on it for a long time. We're trying to get business, we're trying to get traffic and we ended up making like one sale. And then we just quit. Cause we were taking this idea back then, and it was like, “just get eyeballs to your website.”
Tim: (03:15)
And then somehow you make money. And from that failure, that failed dot com, I realized I need to know how to get a customer. So, that was the very first thing I set out to do was learn how to get customers. Well, the only thing that I could understand about getting customers was sales. So I learned sales, went out and did an insurance sales program, a five week program of selling insurance face-to-face to people. Then I sold cars and I was like, okay, I'm getting good at this selling thing, but now how do I sell at scale? And that led me into learning marketing. And I started learning direct response copywriting because that's sales in print. And so each of these steps took me closer to doing what I do. And in those early days, my friends who were still in software companies, their dot com companies were still in existence. So I started getting hired to help them not do what I did, which was go under. Basically, we started working on all the things that I did wrong. We started fixing in their businesses and I took my nascent copywriting skills and my fledgling sales skills and started applying it to these businesses. And that's how I got there. Like that, that was the beginning of my career.
Chad: (05:01)
That's great. Yeah. And I love how you bring up sales as being a key part of how you got into freelancing. Because one of the biggest things that held me back for a couple of years was not knowing how to sell. And I thought, “Hey, I'm a good video editor. I can put a video together. I should be able to freelance with no problem finding clients. I have this portfolio.” And it wasn't enough because I didn't know how to sell. I didn't know how to communicate with potential clients so that they understood what my value was. And I had to really focus once I finally decided to focus on learning. That’s when things start to take off and it's interesting that that's a doorway for you. Even what your services were with what you were doing. With a new freelancer who's like, “Okay, I think I know what I want to, I want to do this. I know what I'm doing in some kind of specialized skill,” how do they land that first client? How do they enroll them into their services? How do they get those first few clients that help them to be like, “okay, I have a business now and I actually have some testimonials and I can get going with this.” What are some of those first steps that are most important?
Tim: (06:14)
Okay. So, yes, two forms of that question, getting going where they're just getting started and then one where they already have testimonials, because one is zero to one and one is one to two or maybe 1.5. So from zero to one, you have skills. The only testimonials you might have are in the direct response world, and they are called “good guy” testimonials. They’re like, “Hey, uh, Tim's a good guy and that's it, right?” It's not about any of your skills because you haven't done anything for them. So a lot of people get that. When they've come out of school, maybe they've got their professor who says, “Hey, you know, good guy. Give them a shot, right?” You might have something like that, but you're going from zero to one.
Tim: (07:11)
The first place to start is family, friends, and acquaintances. Let people know in your sphere of influence what you're capable of doing. Just let them know like, “Hey, I'm doing this thing. It may sound weird. It may feel uncomfortable, but these people are the closest to you, the ones who would take a chance on you because they trust you because they know you. Maybe you won't make very much money, but it'll get you your first testimonials because you'll be able to work really hard. Get that, those first few projects under your belt, that you got some money for, or even no money but just simply that it was a known name in your area. And from that, you can then go do what I call client stacking. So, maybe your first few projects, you made $500 on each of them.
Tim: (08:18)
Well, then now you can go after that thousand dollar project and start your new stack. So your next couple of projects will be a thousand dollars because you've got proof. You're capable of doing what you say you can do. And then you continue stacking on top. There's a key to that, (and I'll stop rambling), but there's a key to a client stacking in that if somebody pays you a thousand dollars, give them $2,000 worth of quality, go out. Sure. Your hourly rate might be lower. But what you're trying to do is build up paid case studies. You're trying to build up social proof because the next stack, if you're at a thousand and you decide to go after $2,000 projects, well, those $2,000 projects are going to look at that other project and go, “wow, that's an amazing project you did there. I would love for you to do it for me.”
Tim: (09:22)
Whereas if you got paid a thousand dollars and delivered a thousand dollars, that $2,000 client is going to go, “ah, that doesn't really look like it's up to what I need.” Right. That's how you start moving up to the next level. At some point, you're going to go, “okay, no more providing more over-servicing clients because now I'm going to actually get paid for what I do.” And so you might get to a $10,000 project before that, that kicks in and you're like, “okay, you pay me $10,000. I'm going to give you $11,000 worth of value, as opposed to $20,000 worth of value.”
Chad: (10:08)
That's really great advice. And it reminds me of when I first started freelancing. I wasn't approaching it in that way. I was like, “Okay. So I just want to make sure that if they're going to pay me $500, that they feel like they got $500 worth of work so that they walk away satisfied, but maybe not like, ‘wow, I got more than I invested in.’” It’s just comparing my own experience with what you just said. It’s no wonder why for a while, I couldn't expand beyond that. I was stuck in this cycle of doing the same level project over and over again, until it got to the point where I would do the $500.00 project and I would deliver at that $500 level for a while, until I had a client who would critique it and say, “Hey, we don't feel like we got everything that we wanted.” It's almost like it got to a point where I had a dissatisfied client who would say, “Hey, it's not quite what we're thinking yet.” And then I had to improve the product. That was my service, to get it to that level for that client. And then it would wake me up to being like, “okay, I have to now figure out another level,” but going through your way of doing it would have been much better, where I didn't wait.
Tim: (11:33)
I wanna bring something up because you said you were over-delivering, or you felt like you were giving them what they wanted. If you follow the client stacking principle, you will technically over-service your first clients. And the problem with that is you're probably not ever going to make more money with those particular clients, because one, they've gotten very used to you over-servicing for the amount of money they're paying you. So, if you're giving them a thousand dollars worth of work and getting paid $500, and you say, “well, now I'd like to get paid a thousand dollars for this work they're going to do.” I don't think so right there. They're not going to pay you what you're worth. That's why you client stack, because the next client does not know that you got paid $500 for that thousand dollars worth of project. They don't know that they look at that and they go, “wow, that fits with what I need because I can see the quality. And then you get good at it. You get it delivering that project. And then you go to the next higher one so that you're always delivering at a higher level. And then at some point you'll be able to reap the rewards of that extra effort.
Chad: (13:02)
So do you recommend going after shorter term projects, then to start so that you can go through that stacking process quicker, or that it's worth going after some long?
Tim: (13:11)
Yes, because one, you need to get your reps in. Going after the bigger project feels more stable, it feels like I'm going to be safer, but you're not in the business of you being safer. You're in the business of your client being safer. You're not an employee. Like I'm going to show up, I'm going to get paid. I may do a terrible job that week, but I'm going to get paid. If you bring that attitude to a client, you're not going to get paid. They may give you money now, but then you'll never get money from them ever again. So, you need to get through the reps as fast as you can. Then when you have the skill sets to command the prices that you actually want, not just skillset, but the perceived expertise, what I call “authority.” When you have that, then you can actually get clients to be more trustworthy of you. They'll trust you more for longer term projects. And you'll be able to keep those client relationships happy. If you don't have the experience of keeping clients happy here, and you jump into a long-term relationship, you're probably going to get treated like an employee. And eventually, you're probably going to get fired.
Chad: (14:37)
That's a really good way of looking at it. It's really important for any beginning freelancer. I fell into that trap when I was trying to look for clients. I was like, “okay, I gotta find the clients that are going to pay me for the next six months to a year because I came from the employee world and I’ve gotta have that consistent income.” So, I don't have to keep looking for new clients. And I finally accepted that. I'm always going to be looking for new work. That is how to grow a business. I'm always looking, I'm always expanding, but I didn't get that at first. And it really held me back with going after those short-term projects to be able to stack easier and move through that.
Do you also recommend going after maybe smaller clients? In other words, they're smaller businesses. They're not used to working with like what, what do you recommend as far as the type of client? We talked about the type of project. What about the type of client?
Tim: (15:32)
This comes down to self-worth. What you perceive for yourself. I've watched a lot of people who are actual experts, really good at what they do. They've been employed for awhile, worked in say fortune 500 space, know how to serve the people. You know, the internal customers inside the fortune 500, they know how the system works. They go off on their own and they go after mom and pops. That is a terrible thing to do. It's like, you're way up here in your job. Then you start your business way down here and you're going to have to slog your way all the way back up. When you were already there, you could just go make use of your acquaintances and friends in that fortune 500 space and go land a fortune 500 client. If it’s just you and you can’t take on one of their big projects, you can take on one of their smaller ones.
People who are brand new, like your skills or your skills or all those shiny, and haven't been used yet. Right? All your skills and tools are our associates, because they've never been used. You're going to start with whatever you can get, going after a big experience company. If you've got the self-worth and you truly believe you can deliver and you'll do whatever it takes to actually deliver for that bigger project, that bigger client, then give it a shot. But most people come into it with a low self-worth. They go, “oh, you know, I've got these skills, but oh gosh, I don't know. I'll go with the person who knows absolutely nothing. And that way I feel like I'm way above them, like I'm fully experienced and everything.” And when they get into that, they get paid very little money and they get hounded by the client.
And they're like, “why is this person bugging me? Just let me do my work. I'm the expert here.” And it's because they have no experience working with somebody like you before, and you're not hand-holding them enough. And you're definitely not getting paid enough to hand-hold them to the level that they need. This is why I talk about client stacking. We want to get those reps in as fast as we can. If you're starting out at zero, we'll get in any reps you can get, then go after clients who can actually pay you that have experienced paying people like you so that they let you do what you're capable of doing.
Chad: (18:40)
That's great. Thanks for explaining all that. I think we got some really good value out of how to start as a freelancer. Now, I want to kind of shift a bit to the freelancer who is more experienced, who has had some momentum for some time now, and they're at the point where they want to scale their business beyond maybe into an agency. They're starting to think, “Hey, I don't want to keep trading my hours for a specific rate. How can I start to increase my income exponentially and start getting more for the time I am putting in my own freelance business?”
I'm at the point right now where I have a couple of freelancers who work with me in the format of an agency. I'm right at the beginning of starting to grow a small agency. And I'm sure there are others like me who either have already started to hire people or they want to, and they're not sure how to transition. What are some tips you have for transitioning into more of that agency format from just being a solopreneur?
Tim: (19:46)
First, get your finances straight. Most people are billing terribly as a freelancer. They're billing just enough to pay for themselves. That's it, like they don't have the billing set up in order to actually pay people. So, you can't move into an agency and be able to afford to pay other people if you can barely pay yourself. The first thing to do is start working on billing appropriately for yourself, so that you're covering all the expenses that come with running a business. You’re a video editor. If you're going to build a business around editing videos, then you're going to have to hire editors. Well, how much do they cost? Are you actually billing that cost into each of your projects? Then you have project management. Are you billing project management right now? Then you have the executive of the company. Is the executive actually being paid well? Now, we also have administration.
There's all those other things, bookkeeping and compliance, and all those other things that cost your company money. Are you billing enough to cover those costs? Then you have the cost of marketing. Then you have the cost of sales. You have all these expenses. Are they being attributed to each client project? Is there a percentage of every client project that's being billed to cover those costs of running a business? If you're not doing that, you're not ready to start an agency. The second thing is, if you are going to start an agency, because you just landed one big project and you need to hire contractors immediately to be able to fulfill your obligation, you're going to struggle. So, what's going to happen is you don't have deal flow for afterwards. When you're a freelancer, you're like, “ah, you know, I'm busy, I'm working. And I'll have money sitting in my bank account, so then I'll be able to take the next month or so to go get another client.” But when you're running an agency, you must always have deal flow. If you don't already have deal flow for yourself as a freelancer, you're not ready to start an agency. You need to have somebody waiting in the wings, you know, in the pipeline, ready to become a client as soon as you have the time to fulfill the work for them. If you don't have people waiting to become a client, you're not ready to build an agency.
Chad: (22:43)
Some really great tips for going into that. Because, like for me, it got to a point where I wanted to keep taking on new clients and there were new opportunities that were coming my way, but I had hit my max hours that I wanted to work per week to have the work-life balance that I wanted. So, the only way forward is to start hiring people where I can start offloading some of the tasks that maybe I don't want to be doing anymore. And I started to realize, “Hey, I don't really like spending so much time working on my website. There are certain tasks that I may, on the strategy side, want to focus more on. And I even moved out of actually doing video editing.
Do you have anything to share regarding that process? When you think about going into an agency, how do you think about the tasks you’re going to be doing going forward? Or letting go of or off-loading? And how to navigate that?
Tim: (23:44)
There's a couple of agencies There's the agency that's led by the talent. So the person who created it's like, “I'm going to be the talent. Everybody else is going to be hired to support the talent.” Okay. Then there's the other one where the person created the business and starts hiring talent to make sure that the talent has plenty of work. So, the best type of agency is the one where the founder or the partners are delivering work to talent, because then, you can actually scale. But the other one is a good lifestyle business where you're like, “man, I really love what I do. And I want to be the Michelangelo of this thing. I want to be like that.” Well, that means I need all the helpers that Michelangelo had. You know, all the people who are going to do the prep work, all the people who are going to do the administrative stuff, all the people who are going to go out and buy the supplies. All those things that needed to happen so that Michelangelo could just show up and do his work. You really need to know what kind of business you are building? Which one do you really want? So, some people are trying to build the second one where there's a whole bunch of people going to do the work, but they can't let go of being the talent. Then they're always in conflict with their team and are never going to succeed. You really need to know what it is that you're building and who you are, because you don't want to be this artist, and try to build the other company, because you will hate all the work that you have to do to keep these other people employed. You'll give up video editing. If you love to do video editing. You'll have to give it up because you're so busy just keeping the business running and growing. So if you're an artist, then you need to hire a support team. If you are the business builder, then you hire the talent.
Chad: (26:03)
That is fantastic insight. I think you explained that really clearly for those who are considering trying to transition into an agency. I have one last question regarding scaling into an agency. What is your opinion regarding hiring freelancers or independent contractors, especially when you're small versus hiring employees, and are there some pros and cons of each, or is one riskier than the other?
Tim: (26:31)
Well, employees are riskier than others simply because of labor laws. So, that's one of the biggest issues. Because depending on where you're at in the world, your labor laws could be really stringent and you hire somebody and then you're stuck with them, even if they're terrible and you can't get rid of them. It takes you a year to get through all the things you have to do just to get rid of somebody who's a bad hire. When you're just starting out, you just don't have the resources to hire people and be able to commit to them in a long-term space. But over time, whether you have them as a contractor, or you have them as an employee, depending on the legality of your jurisdiction, it is more about whether you can have a team that you can rely on and that they can rely on you.
A lot of people who are contractors get tired of the fact that they can't rely on the employer. It’s like, “oh, you got a project? But you don't have a project. And now I have to go find other work.” And so they can't rely on you. So they start taking on these other projects and eventually you're like, “oh, I need you.” And they're like, “I'm too busy for you now.” So that's the risk of contractors. With employees, the risk is more and more around compliance with the actual legal side. But if you've got a great team and you want to prove to that great team that you're loyal to them, then employment makes the most sense, because you can say, “Hey, I will make sure you're paid just as long as you make sure that you deliver great work.” But outside of that, we've entered a world where with employee/contractor, the terms just don’t even make sense anymore.
Chad: (28:45)
Yeah. The small team that I have, they're all freelancers and I've liked having the flexibility of being able to fluctuate how much work I'm sending them, that as I'm figuring this scaling into an agency thing out, I've had times where I have more work and less work and not having to have to pay them if I don't have work for them has been nice. But I can see how, at some point, if I want to have that loyal team that I can rely on every single day if I need to, that employees can benefit. And I'm also trying to figure out, okay, maybe if I send them enough work as a freelancer, and week after week, I keep sending that work, almost like I'm priming them to be more reliable. Like, “hey, I'm consistently sending you eight or nine hours a week worth of work.”
And it's been several months now. It's almost like they start to get it in their head, “Hey, I can rely on this client, which is me. So I'm gonna make myself available.” And obviously I still don't have as much control over that relationship, but yeah, I like how the freelancers who are working with me have a little more autonomy and say “hey, this is what I'm charging.” And if they want to increase their rate, they can increase it. And I either like it, or I'd go find somebody else or I talk to them. It's interesting. Just the nature of where we're at in business now and how with building an online business, you can really do both and there's a lot you can do with a freelancing team. And there's also benefits of both. So, I think you shared some great advice there.
Tim: (30:18)
We're in a world where we can hire globally, but the laws around the world have not caught up. So, a lot of people are contractors. And even if they're working, you know, 40 hours a week, full-time for you, they're not working for anyone else. But you have to treat them as a contractor because of all the different laws from the different countries. I don't have a choice. Like I just don't have a choice to make you an employee because to do so, I would have to set up a company in your country. I would have to do all these different things and then I can't afford to hire you anymore at all. Or it just doesn't make sense for me to do that. It will be easier for me to just hire someone in my own country, instead of getting somebody who's really talented, who's in another country. And I think eventually, all the world is going to have to come together and make some agreement on how labor laws are not equalized, not exactly the right word, but where it's easier to actually do business with people around the world. But that’s why I said, a contractor/employee doesn't make a lot of sense in those terms. Because they're old terms. They don't make a lot of sense in today's world where you can hire amazing talent anywhere on the planet.
Chad: (31:55)
Definitely. You shared a lot of value in a short amount of time. And I really appreciate that. Where can the viewers of this show learn more about you and learn more from you?
Tim: (32:06)
The best places, just go to YouTube, youtube.com/timconley Tim Conley. Just go there. There's like a couple hundred videos where I drop a ton of training there and try to be a little entertaining.
Chad: (32:24)
I hope you enjoyed that interview with Tim. He definitely shared a lot of valuable insights on client stacking, on whether to go after short-term or long-term projects to start, what types of clients to go after, how to figure, how to enroll those first clients into your services, how to figure out yourself worth, what your value is starting out as a freelancer, and whether you should go after smaller businesses or larger businesses. And he shared a lot of information on how to navigate that initial phase of building up enough reps, as he mentioned with doing this project and that project and another project, so that you are building up a strong portfolio of paid case studies where you accomplish something for your clients. I really love when he discusses how if you're going to charge a thousand dollars for a project, make sure that you give $2,000 in value so that you have a much easier time landing a $2,000 project next.
And if you're a freelancer who is thinking about scaling into an agency and starting to hire people, he shared a lot of great advice on what you need to do to prepare for that. How there's a lot of financial preparation that has to take place. I've experienced that where once you start to hire people, there's this freak out moment of, “oh crap, how am I going to pay them?” I'm not used to billing my clients with them in mind and then stacking on a profit and so forth. And I'm sure he has a lot more advice over on his YouTube channel and website regarding how to figure out that billing structure. And of course, if you tune into this podcast and subscribe to this YouTube channel, you'll be able to learn more as well because transitioning into an agency can be a rough transition.
I'm still in that transition. And there's a lot of learning that occurs with figuring out how to bill your clients, how to change your pricing to accommodate your new team, and how to communicate that to current clients. It's easy to pitch your new rates and everything to future clients, but it's not easy to pitch that to your current clients. When they're used to paying a certain amount, you have to be like, “Hey, we're going to deliver more value. And here's how.
He also shared some great insights today about whether to hire freelancers or employees and the pros and cons of each. It's something that I talk a lot about. I'm a huge advocate for hiring freelancers and working with freelancers and building a team of freelancers because I love that model and I love supporting freelancers, but he did share some good advice on how there are some advantages to hiring employees, but there's different challenges you have to navigate. And he definitely dropped some things to think about. So, if you're in a position where you're trying to scale into an agency, definitely tune into what he has to say. He has a lot of experience there. And if you're a freelancer yet just getting started, he has a lot to share regarding that as well. Thanks for tuning in today. And we will see you in our next early morning conversation.
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