Today’s post was inspired by a challenge one of our DYF community members – let’s call him Sean – is experiencing.
If you’re a freelancer who enjoys your craft (i.e. design, dev, etc.) and you’re thinking of hiring someone because you feel it’s your only option to get to the income level you want, this post is for you.
(If you know you love managing people and want to grow a huge agency and team – not because you think you “have to” in order to reach your financial goals, but because it sounds fun, meaningful, etc. – this post might not be for you.)
So let’s dive in!
Here’s Sean’s situation — can you relate?
“I’m wanting to hire my first employee so that I can focus more on biz dev.
I’ve been feeling burnt out and like juggling the “doing of the thing” and the “selling of the thing” is just too much.
I feel overwhelmed and like I don’t have enough time to do all the client fulfillment work on my plate while still being project manager and sales rep.
In the past, this overwhelm has gotten to the point where I wouldn’t open my emails due to a background assumption that all my clients were mad at me.
Hopefully this new hire will allow me to assuage some of that, while also reaching new clients!”
Sean’s situation struck a chord with me because it was the exact reason that drove me – and I suspect many freelancers – to hire my first team member.
But here’s what I’ve learned after having done that a couple times…
Running a small team kinda sucks.
From my experience running a small 3-person agency that most would consider quite successful (profitable + regularly grossing $15-30k/mo), it’s my opinion that unless the work you deliver is super-productized, streamlined, and SOP-driven, it’s not worth it for most freelancers to run a small agency.
If you’re a freelancer who enjoys your craft – i.e. a designer who enjoys designing, a coder who enjoys coding, etc. – I can fairly confidently say you’ll enjoy your work life a lot less when running a small agency.
(I’m defining a “small agency” as anything lacking department heads and project managers, so probably less than ~10 people)
The reason I don’t think most freelancers would enjoy running a small agency is because the type of work you do is going to shift more fully into the aspects of your job that you probably don’t enjoy.
When you run a small agency, most of your hours will be spent on the following:
- Lead gen
- Lead nurturing
- Sales
- Project Management
- Team member oversight
- Accounting, invoicing, payroll, etc.
If you do the stuff Brennan teaches in The Blueprint and you have ownership over your lead flow, you can minimize your time spent on those first 3…
…But when running a small agency, all this does is puts you more squarely into those latter 3 responsibilities.
Now, if you really enjoy business development and human management and you want to grow your agency because you love the idea of managing a big team of people, then all the power to you. Provided that you first build & own your lead flow, and then grow it to the point where it can support the volume needed to feed a 10- or 20-person agency, I’m totally on board for you scaling your agency if that’s what you want to do.
But today’s post isn’t for that person.
Today’s post is for the freelancer who enjoys their craft and wants to earn a six-figure income, but thinks the only way to get there is to scale.
If that’s you, know that it’s totally doable for you to earn a six-figure income, as a solo freelancer, working under 40 hours a week.
The steps to get there are essentially an amalgam of the stuff we talk about all the time around here at DYF:
- Do great work that produces a great ROI for clients, and learn how to position and sell it properly (we cover this in Charge What You’re Worth and Double Your Freelancing Rate)
- Own your lead flow, to ensure you have enough leads coming in that you can happily turn many of them away (Covered in The Blueprint and on the blog + podcast)
- Build processes for onboarding your leads and clients to minimize your unpaid client acquisition & onboarding time (Not covered in one go-to course right now, but we have a lot of blog posts on it)
None of those steps necessitate “hiring a bunch of staff.”
And you also don’t need to work with heaps of clients a year to get your income to the six-figure mark.
I have one client whom I work with a couple times a year that paid me $55,665.40 for our last 3-month engagement. (I tracked 202.5 hours for that last project, so that brought my effective hourly rate to $274.89/hr)
Brennan’s weekly rate is $20k for his consulting. (He gets to target a much higher effective hourly rate than me because he’s got the clout, demand, and extensive “client ROI track record” to back it.)
So with all that being said…
Before you even consider hiring someone, I have a 3-part exercise I’d like to walk you through.
- First, I want to you to get clear on what you actually want.
- Then, I’m going to have you track all your time.
- Then, we’re going to optimize & plan next steps.
Most freelancers who think they need to scale because they’re “too busy to do everything themselves” usually have a shortcoming in one of these two areas:
- Burning too much time on lead acquisition or sales,
- Or not charging enough for projects and having to take on too much work to earn enough to live
Once you know where your time’s going, you’ll get insights on what you need to prioritize.
Too much time chasing leads?
- 👉 Build Blueprint-style lead acquisition channels so that your leads come to you.
Burning a lot of time on sales calls?
- 👉 Create an automated pre-sales & lead qualifying process so that by the time you get on the phone with someone, you’re 90% sure they can afford you and will want to hire you.
Have too many obligations to client work to be able to focus on actually growing your business?
- 👉 Make it your goal to own your lead flow and get closer to the money & raise your rates as soon as you can, so that you can reduce your workload while increasing your income.
Until you know where your time’s going, you won’t get access to these sorts of insights.
To keep this post digestible, let’s focus just on step 1 for now.
And when you have that done, we’ll move on to the follow-up post for steps 2 & 3.
Action steps:
📄 Step 1. Make a list of your core values, along with work goals, likes, & dislikes
Draw lines on a piece of paper to divide it into 4 quadrants. (Or use this nifty worksheet I made)
Quadrant 1: Core values
What are the fundamental things you value that your goals are oriented around?
These would be zoomed-out things like freedom, comfort, security, etc.
Quadrant 2: Goals
Specific long-term goals with your business.
Things like scaling it to be huge, or getting paid a lot and working part time to leave more time for family, underwater basket weaving, etc.
Try to determine if it’s more important for you to make as much money as possible, or re-claim as much time & freedom as possible.
If you value time & freedom more than money, I’d challenge you to do some budgeting and reflecting on your cost of living to determine your actual target annual income vs. just wanting to earn “as much as possible.”
(For me personally, as an expat with no kids, I target around $60-80k for my cost of living, savings, and investment goals. My #1 priority is time freedom, so having that $60k-80k number in mind helps me decide what client work to take on vs. skip.)
Quadrant 3: Work likes
What are the specific tasks you most enjoy in your day-to-day work?
For me it’s the actual deep work like coding new features, designing, writing, strategy, etc.
Quadrant 4: Work dislikes
What are the things you’d love to never do again if it were magically possible?
For me, it’d be prospecting, sales calls, bug squashing, billing, and convincing clients that my designs don’t actually need to go through another round of revision. 😉
What to do with this worksheet
Today’s worksheet is best used as a “guiding star” for your business.
Frame it, pin it on your wall, tape it to your monitor, take a picture and set it as your desktop background — whatever you need to do to not lose sight of it.
Whenever you set yearly, monthly, or weekly goals, ask yourself: “are these goals in service to what I actually care about?” (i.e. the stuff from the worksheet)
As freelancers, we have the ability to be truly intentional with our lives and create businesses that fuel and support the things we believe are truly important.
And yet so many of us don’t.
Sometimes it’s simple, mindless, “keeping up with the Joneses…”
(“XYZ person who I look up to runs a big agency with a fancy office with lots of staff and drives a nice car, so I should do that too…”)
And other times it’s because we’re broke, hungry, and have our plates so full working on crappy low-paying projects, that without meaning to, we find ourselves believing that the only way to escape and get any actual financial freedom is to ramp up the volume of those crappy, low-paying projects.
(Which, speaking from experience, only gets you more stuck.)
By looking at what you actually want, and keeping it front-and-center when deciding how to grow your business, you ensure that you’re not going to look back in 5 or 10 years to find yourself at the top of a ladder you never really wanted to climb in the first place.
Next Steps…
Now that you have the worksheet filled out and hung up on your wall or stapled to the forehead of your spouse† so that you see it often, it’s time to move onto part 2, where we’re going to have you look at where your time’s going and make optimizations + plan your next steps for your business.
- First, be sure you’ve filled out the worksheet,
- Then click here to move on to steps 2 & 3 of the process!
† Don’t do this