Many self-employed people struggle to keep their businesses running. They often work on a project-by-project basis, which means they have to constantly look for new projects. One way to solve this problem is to grow into a small production agency that completes projects rather than billing hours worked as a freelancer.
Those who are flexible with their time often realize that the elephant in the room cannot be ignored any longer: the constant search for new projects. Not only does it take many hours away from the work that could have been spent on projects, but it also takes a lot of time and effort.
Moreover, the self-employed are often stressed that the next month may not be as productive as the previous month. The constant fear of not knowing if the money will run out dampens the joy of working from home at your own pace.
Moving from self-employment to agency management
One thing should be clear: Not everyone can start an agency overnight. You can slowly grow into an agency or launch a product. Let’s take a look at both tracks to see what kind of challenges await you:
- Many freelancers would like to take on more projects, but simply lack the resources to do so. What they can do is outsource part of their tasks, or start outsourcing part-time help initially.
- Launching a product is more complicated. It can be a course, an e-book, or a program. While the passive income dream sounds good, most people don’t succeed.
However, it is certainly not impossible to launch a successful product. Those who are successful often combine their services with products. Let’s look at an example from this list that contains examples of manufactured services:
Dropship For Sale mainly sells ready-made dropship sites that can be customized with your logo and domain. All you have to do is purchase one of the ready-made templates. While this is the basic business, they also offer custom store designs as a service at a higher price.
Convert your existing services into products
The best option to move from self-employment to building and expanding an agency is called productivity. Production is not limited to setting a price for services and selling them as a product from a list of products. It’s all about customizing your core services, optimizing your operations, and running an efficient business with a high ROI.
One of the big advantages of running a production agency is that you:
- Know who your ideal customer is, and
- That you can easily create marketing campaigns.
This eliminates the need to constantly look for new projects/clients as they must find you through your marketing efforts. Marketing can be anything from a referral system to content marketing and paid advertising. The only thing that is not certain is which marketing strategy will work best for you. However, you can look at the competitors, and then try out the chosen strategies.
Decide what to convert into products
With theory out of the way, which part of your services should you produce? One thing is clear, not all of them. You will invest a significant amount of time analyzing your existing services and you will need to decide which ones are worth keeping and how to pool them.
Let’s say you’re a designer, and you’ve been focusing on the travel field so far. Most of your clients are travel agencies, and some are travel bloggers. They usually hire you to create stylized graphics for blog posts, sometimes you need to create an infographic.
The good news is that you already have a niche: travel companies. This helps you market yourself as a designer for all things travel. Maybe you are even a traveler who loves to take pictures. In this case, you can take advantage of your own set of image assets and use them exclusively for your clients. This distinguishes you from designers who rely heavily on ready-made images.
Next, try to bundle your services into packages that give the impression of good value, for example:
- Monthly bundle with graphic design for blog posts
- Create a one-time infographic
- One-time custom illustrations
Explain what each service contains so there is no room for interpretation, requests for refunds, or disputes. Also, link to your refund policy, and try discounts for annual subscriptions.
Why is recurring revenue important
The example above mentions recurring services, and this is something anyone should focus on when converting it into a product. It removes the above fear that many self-employed people have, that their cash flow is unreliable and running out.
The best recurring service is the long-term service, either quarterly or annually. It makes investments for agency owners much easier because they can calculate their monthly recurring income. Using this data, they can determine if it is worth hiring new talent and expanding the agency. Or they can invest in marketing activities to bring in new potential customers.
However, frequent services often require more work. You will have to think about managing subscriptions, and if you want customers to handle it themselves. If so, they can cancel at any time, but they can also raise or lower their package. Some subscriptions also require detailed task management including reviews. A good client portal software can take care of all these aspects for agency owners.
Going from freelancing to owning an agency is a daunting task. Freelancers will need to adapt to the fact that they will not work alone, but instead lead a team of like-minded people. This requires a lot of effort, management skills and patience. However, an agency can also provide a great deal of security for your life as its actions are easy to predict.