Many freelancers have difficulty keeping their businesses afloat. Many freelancers work on a per-project basis. This means they are constantly looking for new projects. This problem can be solved by growing into a small, productized agency that does projects and does not bill freelancers for their work hours.
People who love the freedom to work on their schedules often find that the elephant in this room is not something they can ignore: the constant search for new projects. It takes away time that could have been spent on projects and also requires a lot of effort.
Freelancers often worry that the next month may not be as productive as the one before. It can be difficult to work from home and enjoy the freedom of being able to control your cash flow.
Transitioning from freelance to managing an agency
It is important to remember that you cannot start an agency in a day. Either you can grow slowly into an agency or launch a product. Let’s take a look at both to see what challenges you might face.
- Freelancers often want to take on more work but lack the necessary resources. They can outsource part of their work or hire part-time workers to start.
- It is more difficult to launch a product. You can launch a course, ebook, or software. The passive income dream sounds great, but most people don’t succeed.
It’s possible to launch a successful product, but it’s not impossible. Success stories often include products and services.
Dropship for Sale sells dropship websites. These sites can be customized with your logo and domain. All you need to do is buy one of their ready-made templates. This is their core business. However, they also offer custom store designs at a higher cost.
Productizing your existing services
Productizing is a better way to switch from freelance to building and scaling a company. Productization does not mean putting a price tag on services and then selling them as an a la carte product. It is all about optimizing your processes and nipping down your core services to create a profitable business with high returns on investment.
One of the greatest advantages of running a productized agency is that:
- Know who your ideal customer is.
- You can create marketing campaigns easily.
This means that you no longer need to search for new clients or projects. They will find you through your marketing efforts. Marketing can include anything, from referrals to content and paid advertising. It is not clear which marketing strategy is best for you. You can look at your competitors and then try out the strategies.
Deciding what product to produce
Now that you have the theory down, what part of your services should be produced? Not all services are the same. It will take a lot of time to analyze your current services, decide which ones to keep, and then bundle them together.
Let’s say you are a freelance web designer in Miami and have been working in the travel niche for a while. Some clients you have are travel agencies while others are travel bloggers. You are usually hired to create stylized graphics to be used in blog posts. Sometimes, you will need to create an infographic.
You already have a niche: the travel industry. This allows you to market yourself as a designer for all things travel-related. Perhaps you are a photographer who travels a lot and loves to take pictures. You can use your collection of pictures to create a portfolio and then only for clients. This is a significant advantage over designers who heavily rely upon stock images.
The next step is to bundle your services in packages that offer the appearance of value.
- Monthly package including graphic design for blog posts
- One-time creation of an infographic
- One-time custom illustrations
It is important to be clear about what each service includes so that there are no ambiguities, refund requests, or disputes. Link to your refund policy and offer discounts for annual subscriptions.
Why recurring revenue is so important
Recurring services are a key aspect of product development. This eliminates the fear that freelancers have about their cash flow being unpredictable and short of funds.
A long-term recurring service that is either billed quarterly or annually is the best. Agency owners can easily calculate their monthly recurring revenues, which makes it easier to make investments. They can then decide whether it is worth expanding their agency or hiring new staff. They can also invest in marketing activities to attract new leads.
However, recurring services often require more work. Subscription management is something you will need to consider if clients want to manage it themselves. They can cancel at any moment, and they can also upgrade or downgrade their package. Subscriptions may also require task management, including revisions. Agency owners can have all of these tasks managed by good client portal software.
It can be difficult to make the transition from freelance work to owning your agency. The reality that freelancers won’t be working alone but will have to work with a team of like-minded people is something they must accept. This takes patience, leadership skills, and a lot of effort. An agency can bring security to your life because it is easier to predict.