As a service provider, whether providing creative, graphic design work or consulting on business and IT, you've probably considered whether to work as an employee or strike out on your own as a self-employed contractor.
Lots of people who choose the self-employment route find that there are many rewarding aspects to the business side of things: finding new clients, helping craft custom solutions for their needs, and continuing those relationships over many years, for instance.
But a self-employed service industry worker can find too much work. If you're good at what you do, you could end up with more well-paying clients than you anticipated. At this point, you're faced with a choice: hire others and become an agency, or turn away paying clients.
Of course, you might just skip over the self-employment step and go straight to launching your business. But regardless of why you're thinking about it, consider carefully what to know before starting your own agency.
With the possibility of greater rewards come some particular challenges that you'll want to have a good grasp on before starting.
Whether you start with freelancers or go straight into hiring employees, your agency is only as strong as your team. Fill your team with a variety of strengths.
While you should rightly pay top dollar to get and retain great talent, you should also be careful to keep evaluating your team's results. Personnel can be a major drain on your finances if they aren't meeting expectations.
But it can also be hard to keep the best people, not to mention clients, if you’re still doing everything in displaced documents or, worse, pen and paper.
One of the best ways to maintain strong communication with managers and team members alike is having a single source of project status updates. A dashboard that helps everyone stay up to date avoids personnel issues by keeping everyone’s focus on the right priorities.
Hire a good team and manage them well, and your agency’s professionalism and efficiency will attract and keep the best clients.
It's tempting in the beginning to do things quickly and cheaply to get your first in-the-black months, but recognize that your reputation lasts far longer than those first clients. Even if a client isn't likely to bring more business to your firm, they have friends, competition, and other contacts who may hear about you from them.
It's better to have a slightly longer lead-in to profitability if it means you get there without burning bridges. That loyalty may create a flywheel effect later on, enabling you to focus more on picking the perfect projects rather than always having to market aggressively.
Having a client work management system like Accelo helps you retain clients through top-notch communication on proposals and project progress.
At the same time, being able to replicate and tweak projects in the system for repeat customers saves you serious time.
Organization is almost always a profit driver. When your team knows exactly what they should be working on at all times, they are less likely to prioritize poorly or let projects go over budget or past deadlines.
Creating a workflow collaboratively with the stakeholders involved means that everyone knows what's going to happen next. This is positive for morale and efficiency but also serves the client well.
In Accelo, you control the visibility of different aspects of the project, helping team members and clients all see as much as they need to understand the progress you’ve made and answer their questions.
At the same time, the system helps move proposals, approvals, change requests, and other project modifications along through a quick communication interface. All the changes are documented so everyone can see what has been updated as well.
You need data on what you really spend at your agency, factoring in not only your employees' hourly rates but also any benefits, the costs of keeping an office, and any other overhead.
This doesn't mean using an arbitrarily high rate for every project. Instead, decide on the profit margin and calculate clearly so that you aren't losing money on a deal.
It also doesn't mean that you won't ever do a special rate because of high-volume work or unusual circumstances. But you want to know exactly when you're creating a discounted rate, not just hope that your set rate is working without the data to back it up.
A strong client work management system gives you this data and helps you track projects as they progress, ensuring that both time and overall budget aren't eaten up too quickly without revisions to the plan.
People who have a habit of taking every task on themselves in their small business often struggle to delegate over time, wanting to have a hand in all aspects of the business to make sure it continues to meet their high standards.
This may not be a problem in itself, but if you’re handling all your project management and operations details in a cobbled-together set of spreadsheets or on paper, you’re not getting the full value of your time as an agency leader.
Make it a habit to reevaluate monthly (or more often!) whether there's anything in your schedule that could be done more efficiently in your client work management platform or that another team member could do equally well with a reasonable amount of training.
Paying someone else to do those things makes sense if you want your business to grow, and now is the right time to find a strong team who can do those tasks for you.
Use your time to perform client work and on billable hours by automating administrative tasks and outsourcing data aggregation using a good software tool. A client work management platform can handle all your project management, from quoting and collecting payments to keeping timesheets, providing status updates, and making it easy to replicate recurring work.
A cloud-based platform helps keep your team on the same page and can help identify the most profitable client work. At the same time, using cloud-based platforms means you can work from anywhere, with team members checking in and verifying data in real time.
Any investment you make into a good client work management platform will pay for itself in profitability.
In the early days of your agency, you'll probably take on a wide variety of projects you can technically handle—that's understandable. However, once you start generating a higher profit and have the opportunity to serve more clients, it’s time to think about which projects make the most sense for where your business is now and where you want to take it.
You’ll also want to accept only work on which you can deliver a top-notch product to the client. Remember, you are trying to build brand reputation.
By being strategic in the work that your agency takes on, you have a better chance of proving your value proposition and keeping you busy and profitable for the long haul.
Tracking profitability and resource allocations can be challenging and requires a client work management solution. Platforms like Accelo that specialize in client work and project management for professional service industries will give your agency the necessary insight into your business to make informed decisions and ultimately hit productivity and profitability goals.
Along with giving you real-time insights into your current work, a client work management platform will also help you forecast resources and availability for future projects, making it easier to project intelligently and only sign on the work that you're going to do successfully, on time, and under budget.
To see how Accelo can support you as you launch your agency, you can try the platform for free today. You'll be glad you did!