Scaling a freelance business
Starting out into the freelance world as a freelance Digital Marketing Consultant in 2017, there was no plan or motives really. There were several reasons for my move into freelancing:
I felt like I was hitting the ceiling at an agency and couldn’t progress further & was working lots of hours
I wanted a new challenge and to push myself to see if I could do it
I already had one small freelance client on the side and enjoyed it
I wanted to work with smaller businesses to make a bigger impact
There wasn’t too much of a plan so in my three months agency notice period, I set up a limited company; LMc Digital Marketing (not much thought into it initials + Digital Marketing!), started to tell people I was going freelance and got some business cards & a half arsed attempt at a website.
If it didn’t work out, I’d find another job and if it did - great I’d be able to fulfil some personal goals. Lucky for me it did all work out and for the most part I’ve never looked back. My first bits of work were with my old agency and working with another freelancer to help them out. From then, the work kept coming in and I’ve been quite lucky to never really be short of work.
My freelance business naturally scaled due the the amount of work but it was never my outright plan for it to be more than just a ‘me business’.
Generally, there’s a few ways forward as a freelancer as I see it:
Set out to be a sole freelancer
Plan to scale from a freelancer to an agency
It naturally develops into moving not just a sole business
Or number 4 - Freelancing develops into a new opportunity; business or being employed. I’ve seen this happen lots of time. Freelance isn’t always the end destination for many and it can open up other doors. It can be an eye opening in discovering what you really want.
There’s not a right or a wrong way and I’ve seen lots of different developments which usually go something like this:
1 - Set out to be a sole freelancer
Some want to run their own business solely and not involve anyone else.
Why? Usually because it works around a lifestyle, you don’t want to manage others and generally have more flexibility in when you work and who you do it for.
What are the steps involved? Set up as either a sole trader or limited company, get a stream of clients and sometimes figure out a niche or specialist area; types of clients, industries, skill sets. If work doesn’t fit the bill or you hit capacity, then it’s usually a case of passing
How to scale (if you want to)? - Increasing rates, referral income for passed on work, being known in the field so prospective clients come directly. Different revenue streams can be involved; retainer work, one-off work, training, speaking events, affiliate income etc.
2 - Plan to scale from a freelancer to an agency
Others have a plan from the start that a single person business isn’t the end goal.
Why? Greater revenues, working on a bigger scale, less of a lifestyle business (though still can be), fulfil ambitions, create a business that could be sellable.
What are the steps involved? Setting up a freelance business as in number 1, but there’s usually a business plan behind it. It can typically involve bringing on a business partner to grow or sometimes it’s just hiring staff.
How to scale (if you want to)? - Growing client roster, bringing in staff to fulfil, offering new services, multiple revenue streams
3 - It naturally develops into moving to not just a sole business
Why? When demand for services grow & capacity becomes difficult to fulfil, there are two options to either be more picky or scale the business to take on everything coming your way.
What are the steps involved? To develop it into not just a ‘you’ business anymore, it typically involves outsourcing some of the work to others. This can be through freelance support or hiring of staff.
How to scale (if you want to)? Hiring of staff / freelancers, continuing to take on more work, development of a business plan from a sole business into a multi person business.
This is the camp I found myself in for a few reasons:
Too much work; existing clients wanted more time & services, prospective clients & agencies wanted to work with me. Didn’t want to turn down this work after working hard to get
Landed on a great first freelancer to work with by chance and it naturally developed from this
Worked on a business plan & with a business coach to start to think about the possibilities and direction I wanted to go into which led into creating a small agency
My development from a sole business / freelancer to a micro agency involved:
Using a virtual assistant to help with day-to-day tasks; invoicing, email & diary management, creation of task lists & team organisation
Starting with a few freelancers to see skill levels on controlled tasks to sense check that this would work
Bringing these freelancers into the business more permanently with regular streams of work & retainer clients
Communication with clients to be clear that the business was developing and not the sole person working on things
Controlling the overall relationships, workflows and output
To give you an idea of the growth that was possible for me, in 6 years running LMc Digital and now One-Two Digital, the worst month of revenue was - £2k and the best was £21k (granted with much more outgoing costs).
There’s been lots of learnings and I’m still at the beginning of the journey of scaling my freelance business. Will share more on this at some stage.
Closing thoughts - whilst I’m a Digital Marketing Consultant, the process of growing as a freelancer is quite standard for other industries.
Thanks for reading!