Because I run a freelance-driven agency, I interviewed 93 freelancers in 2010. The most important questions I ask them tend to focus on where they are trying to go.
What are your dreams for your business?
What are your dreams for your life?
The most common aspiration I hear is:
“I want to work on bigger projects, team up with these other freelancers. You know — turn it into a real company, like you guys … or something … maybe.”
Which is awesome! Taking freelancing to the next step of building a bigger business is a great goal, and a way cool business model, if you are the right person.
By the time we finish discussing what the end result looks like, you’ll either get more excited (like I did) or you might consider other paths to follow and grow your existing freelance business.
I am going to compare six full years as a freelancer with the following five years as the co-owner of an agency. I’ll try my best to account for the fact that during these time periods my life changed.
I got a dog, who is the spawn of Tigger and Richard Simmons, and despite his growing age has yet to chill out. I have a 2-year-old toddler named Serenity, who has drastically changed my working patterns. I built a real estate business on the side, become politically active, started a conference series, got married, then focused on my marriage (cause I wanted to stay married). I also now speak at conferences, and a lot more.
So while it may not be a perfect apples to apples, this should give you a glimpse into the differences that I experienced between being a freelancer and the owner of a larger business.
What’s life like as a solo freelancer vs. the owner of a larger business?
Life as a freelancer
- I spend great gobs of time buried in deep (& fascinating) technical or visual (or both) challenges.
- I pay some attention to finances and sales. They take about 25% of my workday.
- I usually work alone, but sometimes collaborate with others.
- I have a few tools and very low overhead.
- I have 100% control of quality.
- I work on some pretty cool personal projects & most my clients are small to mid-sized.
- I have relatively few meetings.
- I work when I have the most energy.
Life as an agency owner
- I talk to people all day long and rarely get very technical.
- I pay a lot of attention to finances, project management, and sales. They take about 75% of my workday.
- I am part of a core team that I love to work with.
- I need a pile of tools to track and coordinate all my work.
- I spend a fair bit of my time making sure other people don’t botch it.
- I get to work on epic big-name, big-impact projects.
- I spend more time looking for both cool projects and cool contractors (or employees)
- I have a lot of meetings.
- I work when my team & clients need me.
Rewards and freedom
The good and the bad of freelancing
- Decisions are my own.
- I play a lot when everyone else is working.
- I surf pretty much every day (cause I can work at night if I have to).
- I make decent money (although I plateaued at 5 years).
- My income is 100% tied to my time.
- I take a break and my income vanishes.
- I work whenever I want to, time really has minimal impact.
The good and the bad of owning something larger
- I work more.
- I make lots more money and my income is still growing.
- I surf some days (but not all).
- I am building assets in the business that have value without my direct influence.
- I can take a month off and my income keeps going (every year for 5 years now).
- I influence more people’s lives.
So which path is for you?
Should you stick with freelancing, or branch off and create a larger organization like an agency? And how do you go about deciding?
Start by making a list of the top 100 things you would like to have, do, and become in your life. (Don’t skip this step, it’s important.)
Then take that list, and go find someone who seems to be living the life you want. If it is legal, moral and ethical, grab their coattails and copy them.
A business is simply a vehicle to get you to the life you imagine. If your dream is to get to Hawaii, it doesn’t really matter how nice a car you pick. Even the world’s fastest Ferrari will only get you a couple hundred feet offshore before sinking you to the bottom of the ocean.
You need to pick the right vehicle for your ideal life.
I started taking bigger and bigger projects because I loved the challenge, the influence, and the budgets. I loved working with people as much as I liked working with code and with content. I found myself with more energy at the end of the day then back when I was programing.
My dreams were shifting. When I was 25, I wanted the time to play. When I turned 30, I found myself interested in trying to make a difference in more people’s lives, becoming aware of the cost of kids and retirement, and wanting my nights and weekends back to spend with my family. With a shift in goals, an agency became the right vehicle for my life.
The Cliff’s Notes version:
Freelancer = fewer meetings & less structure = flexibility to schedule around your energy levels and lifestyle.
Agency = more meetings = rigid schedules + attention to business management = more wealth and reach.
Don’t know anyone running an agency and want to talk it out a bit? If you are coming to South by Southwest Interactive in Austin, ping me on twitter at @justlikeair, grab me after one of my talks, and I’ll be glad to hang out and chat.
(By the way, if you’re interested in the question of whether to work for an agency or go freelance, here’s an an awesome article laying out those pros and cons.)
P.S.
By the way, we have a great talk on the topic of using freelancers in your business. You can check out the slides, and if you are at SXSW, join Peter & I at our session on Monday March 14th at 5pm: “Freelancers are Slutty, but So Are You”. We’ve convinced Seagate to give out some free hard drives, so come and give them a high-five.
I am also moderating a panel with Copyblogger’s very own amazing Sonia Simone on Making Money with WordPress on Sunday March 13th at 9:30am. We will be giving away all kinds of serious (and expensive) WP goodies for free, so it will be worth dragging your hung-over corpse out of bed after the Copyblogger party. Plus Sonia and I both really want to meet you. Come by if you’re there, ok?
Reader Comments (60)
I love your suggestion of making a list of the things you would like to have, do, and become in your life. It’s so easy to get wrapped up in day-to-day activities and forget the big picture. By starting with the WHY, the HOW becomes much more obvious. Thanks for a great post. Sure wish I was going to be at SXSW!
Shane:
Freelancing should be run like a small business. Whether we run an agency or a freelance business, the difference is in the size and scope.
You did give some copywriters and writers fuel for thought, if they are going the agency route. Of course, there are other routes, such as buying and selling information products, creating a self-publishing business, etc. An agency isn’t the only option.
Good material to help us reflect on our business choices.
Randy
“then focused on my marriage (cause I wanted to stay married)” = AWESOME
The great thing about your article that I really appreciate is the fact that you bring up “personal time” Time is precious and spending it on the important things -i.e. Marriage, the kidos, the dogs; makes people happier and easier to deal with. And work with. I have been freelancing for over 10 years, and what keeps me doing it is, having the time to do what is important to me.
I will stick to my residual income and take my fishing trips over the corporate ladder ANY day.
Great article!
Issac
I’ve freelanced in three different stints over a long career, and spent five years in an agency, eventually becoming the Operations Manager. I relate to everything you said – spot on. Personally, the biggest challenge in agency life is the people. I didn’t like being responsible for others all day, every day. Searching, hiring, managing, mentoring, reviewing, disciplining, firing…Life is much simpler again now.
As always, thanks for writing.
I just came back from Pubcon in Austin and I’m headed back down tonight for SXSW tomorrow. I’m on the verge of creating a small agency as well and have wanted to for years I’d love to pick your brain further. Twitter: @Neil_Lemons ( I just followed you).
Thanks for this article. I needed it.
As the agency owner, there would always be more benefits than working as a freelancer. One is more like a business while the other is a job.
The rewards differ definitely.
Thanks for the post
Great article – particularly because you take the glamor of off freelancing without missing on its fine points. And I love that you acknowledge that for everyone – work needs to align with your priorities and fit INTO your total life, esp. personal life (not the other way around!)
Many of the strategies I’ve developed to keep my freelance business in a healthy context with the rest of my life (and get more done and grow my business which I’m doing with publishing) is in an ebook plus other goodies I’m developing at http://www.yourhealthyhomebiz.com. You can get the first chapter The Easy Way To Sneak Exercise Into Your Workday And Get More Done for free at my website.
I needed this, too. I can’t wait to get home after work and blog about my experiences working for myself versus my experiences working for a company. I especially can’t wait to tackle that list!
My path for now is definitely freelancing. Providing tools and services to others while retaining plenty of free time for my own projects appeals to me quite a bit.
This is a very timely post – thank you for sharing it with us. There’s a misconception that I keep bumping up against that when it comes to business, bigger is always better, and that just isn’t true. It is so important to stop and take stock of what you really want from your business and for your life, and then develop the business and business structure that will get you there.
As a small agency owner, you pretty much nailed it. One of the best advantages from my freelancing days 9 years ago is that I don’t have to pretend to know everything (then try to go figure it out). I have a core team that I trust implicitly with skill sets that I don’t have. We’re more efficient with our time because of our different skillsets.
I was focusing only on getting freelance jobs when I started my online career. But slowly I realized that you can’t live your life as a freelance, so I have started a blog and I made it as a business, which will guarantee me earnings and revenue, if I don’t work for sometime.
This June, I will have been freelance for 20 years. I chose to remain freelance and not build an agency because of the flexilibity freelancing gives me. I like to be able to fix my own hours and work when I choose. I also don’ t have the responsibility of staff or office overheads. Like Sathiskumar, I have recently started a blog with the idea of buiding it into an extra income stream – as freelance income is limited to the number of hours in a week.
If I didn’t work for myself, I wouldn’t have been able to be where I am today, in another country, with my fiancée, going where life leads us.
We’re more than happy with flying our own kite right now!
I am a freelancer and I want to own a company 🙁
I love your advice, “if it’s legal, copy who is doing what you want to be doing.
That is dead.on.
Great post. Thank you
I have been ‘freelancing’ and attempting to start my own agency at the same time I work a full-time job. I am hoping to have enough clients by the end of the year to make it a full time gig and start bringing on employees and larger clients. Thanks for the write-up, very inspiring.
Obviously there is life after freelancing. You can establish your own company. We can offer jobs, work freely, etc. etc.
Despite the drawbacks, I enjoy working as a freelancer. The thought of going back into a corporate setting does not appeal to me.
Currently, ‘My income is 100% tied to my time” , but I am working on developing products and services that will be more of a passive income stream.
Thanks for this post, it was very informative.
@Randy great points. Products, resale, ad rev and so many more opportunities exist. We definitely are not getting income from just one. We have a plugin n code canyon that has done wonderfully, get affiliate money from eventbrite, build and sold an iPhone app to a major company… “I want to make products to make passive income is the second most common response we get”.
@Claire – you nailed it. My biggest question to people who are considering growing from freelance to agency is “do you like people and sales or do you prefer code/design/writing?” if the answer Lea s towards the second I usually guide them towards another path.
@Neil – at the cowering unconf, feel free to hit me up.
@Mani – I think the title they picked was to grab you attention, but wasn’t necessarily meant to be taken literally. I know many people have transitioned from freelance to product to agency to freelance and on. I persnally believe you business model should fit your life. As life changes, so should your business.
Another alternative… Create an online training course for aspiring freelancers based on your life experiences, and earn your income from marketing that course instead. 🙂
I am in the process of moving from a “freelancer” (just myself with the help of contractors) to a partnership. It is terrifying, but we both want to see the agency level success and pay scales, so we are excited about the change. Everything you talked about with regards to time, meetings and how your day runs differently is just so true!
I’m still trying to figure out freelancing.
It’s funny, but I’ve taken the diametrically opposite route — I went from being a partner in two agencies for 25 years to chucking it all and going back to my first love — copywriting. Made the move two and a half years ago and haven’t looked back once. You didn’t mention the stress and responsibility of owning and operating a business where the lives of other people (your employees) are directly affected and how the owners (in a morally responsible firm) are the first to take the hit and the last to recover when things go bad. There were a number of times when I didn’t take a paycheck so employees could. I don ‘t miss the sleepless nights, nail-biting, and 2nd mortgages that come with owning a small business. I got my life back.
Great post, sometimes all it takes is a post like this to take a step back and view your work from the macro level. This post triggered motivating thoughts for me, thanks!
amen!
I love being a freelancer myself as I would rather have freedom than more money. The only problem is that you need to be a self-motivated person. Since a freelancer does not have someone breathing over his shoulder telling him to get this or that project done, it can be easy to just take it easy and kick back.
Wow. You make life sound so complicated!
“Then take that list, and go find someone who seems to be living the life you want. If it is legal, moral and ethical, grab their coattails and copy them.”
Exactly.
Love your thoughts on the process. I’m a freelancer with small reach (currently) and large dreams that probably end in some kind of larger agency down the road. Looking forward to the future and loving the journey! Thanks for the great thoughts.
@Jim Schakenbach – One thing to note is that we work with contractors and have no office overhead. We’ve built our business to be lean and profitable. There are definitely always stressful elements, but ultimately, there’s no reason that you need to have an office or employees. I spend half my day at a coffee shop and the other half at home. And we work almost entirely with contractors so if there is a drop in work, there’s also a drop in expenses.
@ Peter Chester — Smart move, Peter. I’m an old school guy and when I started my last agency over, ummmmm, 17 years ago(!) it was not that easy to go virtual. So, are you incorporated? It seems, then, if you don’t own the infrastructure and the people working it (and I mean that in a positive way), the only advantage to being an LLC or Inc. is personal liability protection (to some degree) and some more creative tax room. Otherwise, it would seem you’re really just a network of like-minded freelancers, yes?
Indeed we are incorporated as a California S corp. Mostly for tax and liability reasons.
In as much, we have 3 employees: me, Shane and Reid. Everyone else is a freelancer. That means that our overhead is our salaries and hosting costs. If we get more work, then our team gets more work and our income rises faster than our liabilities.
An excellent article. Having made the switch to freelancing 7 months ago I can say that I love the freedom but not the hours! It’s been quite a lifestyle shift but it takes some skill to master. Also, learning sales and marketing is not to be underestimated. Overall- I love what I do 🙂
I would enjoy being a freelancer more if I had clients / work. This is my biggest stumbling block after being around for 7 months. So I’m currently getting the worst of both worlds – no income and having to sell my services in meetings all week long!
I think it’s useful to consider that, being the owner of a larger agency, you can absolutely choose to delegate the general operations and meetings, if you choose. So you DO have control over your hours — it’s just that many people feel compelled to keep their hands deep in the muck, so to speak.
Consider the blogger who hires other writers to work on posts for him or her. He’s delegating, and can choose when to edit the others’ articles, post them, etc.
This is a great article. I like the fact that even in freelancing one can turn his/her business around based on the clients he receives. I like the fact that it’s starts with the dream. Who do you have to be to start a freelance business or an agency. And get the right vehicle to get you where you want to be.
Thanks a lot for the share. As a freelance lounge member, I am learning a lot about the business.
Thanks again.
Hi Shane.
I really love this post.
I started freelance writing about 8 months ago, but I quickly realized it may affect my family life later. Secondly, I value working with people against working alone. So, I started a blog to earn extra income a few weeks ago.
Already, I have considered the fact that the blog will still require my time everyday. So, I have teamed up with some IT professionals to start an e-commerce site that requires my management skills alone. I hope this works out well.
As you said, it is necessary to look into the distant future – how you want to spend your life – and decide which is best for you.
Many thanks to you Shane for this post.
I am bored out of my skull and extremely frustrated with my 9-5. I am finding great success with collabos and guest posts while learning. Blogging also counts as freelancing right? Well, You perhaps should also warn people against scams. I got stiffed for $400 this week. Delivered before I got paid. I knew it was gonna a happen (deep down), but at least I can use that for other business ventures.
Great post. I think I prefer the Rewards and freedom of a Freelancer.
I really envy someone like Bob Bly, he seems to have the best of both worlds.
Bob has never expanded beyond a couple of assistants, and he still handle’s his own projects. But at the same time time he’s been able to establish a Brand, and trade up his name recognition to earn big dollars with affiliate marketing.
I’m a creative person, not a business person, but business people, not creative people, usually take home the big check. It always seems to come down to satisfaction or money.
@Jim – so glad to see your comment. It only ocured to me when I saw you note that I should have taken the time to explain our business model and how it is an interesting hybrid.
@Lea – while you definitely can delegate certain aspects of the operations & much of the technical work, certain things end up being harder than other, primarily sales, team mgt & customer relationship. Often the things that are hardest to delegate are the things that are driven by you. Your passion, vision and character. Meaning you end up being available when people are and talking a lot.
@designexpertise – you can certainly scale freelance quite a lot, drive a huge personal brand, although every nitch has a natural rate cap. It was creativity to bypass it.
Hi Shane!
This is a great outline of the dos and donts as a freelancer as well as an agency owner. Truly helpful for newbies trying to break into the scene and couldn’t decide which is which. It’s a good comprehensive guide and gives you a clearer picture of what could and could not work. In the end, we all have choices to make and it’s up to us which path is best suited to us.
@Shane, awesome article…
10-ish years ago I started my career as a freelancer. Then, after stints in small companies and mid-size corporations I had learned a lot about what to do and what not to do when you run a business and how to treat people. I’m still working on the networking part…
But after all that, I feel most excited and at peace with myself as I work hard to get my own *company* off the ground. I feel like I’ve learned tons and mostly just want the opportunity to do awesome work with good people and make a better place to work than some I’ve been at over the years.
You really have to be a business person and a sales person more than a designer or a developer to get a company off the ground successfully – those things are at the core of it. And you either have the innate taste/ability for those things or eventually learn it over time. Which is why, I think you, see a lot of tech folks only starting their own business after a long stint as a freelancer or at an agency.
Great post
– Just one question. You say: “I have 100% control of quality”… In my experience the control of quality is shared with the client. At the end clients always have the last word.
I am a freelance and I want to own a company with colegues.
Awesome point Sabela, you are totally right that quality is determined by the business objectives and project style of the client. My point was that often when you have other people doing the technical work, to a degree you give up control on approach and quality of the u darling work.
Oh and I can’t wait to meet those of you at sxsw at the copyblogger party tonight or at my sessions Sunday and momnday.
Oh I do so love learning new things everyday! I REALLY liked this post, full of insight. You went beyond the superficial and provided a useful analysis, yet it was still incredibly personal. I found that much of what you wrote is helpful to others (like me) in tangentially-related (or even unrelated) fields. The comments are an added bonus.
I don’t think I would like to expand too much. I currently work on my small web design firm on my own. I have FULL freedom. Let’s say I’m away from my country for 6 months to visit some very close friends and I could take my work with me. I can work on my clients’ sites and also do a lot of sightseeing, since I’m living now in one of the biggest cities in the world.
If I had a big company I’d be the slave of my own success so to say. I don’t want a palace or a 1 million dollar car. I can do nicely with my small new Opel Corsa and our nice apartment. All I want is to earn a decent living and travel, something we’ve both accomplished.
Even if a big company would mean A LOT more money, I wouldn’t trade my freedom for that. Getting up very early, spending hours and hours in endless meetings, trying to make my employees work well, not for me. I’d rather focus on a handful of amazing clients with nice projects, earn a decent buck and enjoy the FREE part in freelancing.
Great article, Shane – thanks for sharing that.
I think one of the hardest things to deal with when you’re a creative freelancer (e.g. a copywriter/scriptwriter as I was and still am occasionally) is when you get to maximum capacity, where do you go from there?
When you and your work are the “brand,” clients don’t want an employee of yours to create their stuff – they want you. If you hire others to help with the workload, you’re likely to have to edit their work so it reads like yours would, and with the time that takes you may as well do it yourself in the first place.
As it happens recently I’ve made a right turn into the writing advisor / author / blogger route which is going well for me, but, Shane, what advice do you have for “creatives” who are freelancing and want to grow those businesses?
Suze from HowToWriteBetter.net
I’m going to be 51. I started in the direct marketing business when I graduated with my MA from Temple U – working for a guy who was a freelancer and wanted something bigger. I was his first employee. He was age 50 then. I worked for him for 12 years – during which time he became a multi-millionaire and I learned everything I needed to be a freelancer. After 12 years, I did an eight-month stint in NYC in an attempt to start up a direct leg of an agency there – sent there by my multi-millionaire boss, as the agency was part of a merger. When that didn’t pan out, I headed back home and worked from my “virtual office” for the same company that I had been with for 12 years, while the multi-millionaire boss left for reasons I won’t get into here – and I stayed on in that capacity until 2003. It was a good training ground to develop the discipline for freelancing, although I didn’t need training.
Freelancing fits my personality. When I was younger and left for NY, I was at that point in my career where you either head up something big or start something big on your own.
I love where I am at now.
i started out as a freelancer and eventually ended up having to go full-time with an agency. The issue was finding new business. If there was an pipeline feeding me new business I could have stayed a freelancer.
Thanks for the awesome post! I’ve pondering this type of growth for many years and have never come across an article that so captures the differences between keeping things small vs. growing to an agency. I’ve been a freelance PR consultant and writer for 9 years from home, before that I was a PR manager for a company, and before that, was at a PR firm in Silicon Valley.
Being a freelancer has allowed me to make a full time income from home in about 10 hours or so per week while growing my family from 0-4 kids in that last 9 years. Although it’s tough to say no and cut back when the work is rolling in, I always find myself thinking I should grow things to a virtual agency, then recoil in exhaustion after I attempt it for a year or so. I always end up feeling like it was more trouble than it was work, and my satisfaction in a job well know takes a nose dive when all I’m doing is divvying up projects to sub-contractors and managing everything.
If I were the sole breadwinner, I might feel differently about this, but I don’t know any other moms of 4 kids who can pull in $30-50k per year while being with her kids 95% of the time. It really is a dream situation and I feel so blessed.
Thanks for the great posts!! You are truly gifted in everything you do!
I see how one can change priorities as time passes by. I guess I’d like to be a business owner rather than a freelancer.
Thanks!
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