How to Build an Effective Agency? (For Freelance Talent)

Setting up an agency is a great leap for experienced freelancers.

It’s easy to get recurring gigs with a proven track record. However, these solo operations may become overwhelming. At some point, you may have to turn clients away due to an increasing wave of gigs.

The practical solution in this scenario is to delegate work to other freelancers.

Freelance agencies are gaining momentum and becoming significant contributors to today’s workforce. These range from good marketing agencies that employ hundreds, to single-team content writing to finance and tech agencies.

Notably, setting up a freelance agency opens the door to many attractive opportunities.

But this involves a lot of planning, strategies, ideas, and marketing campaigns. Thus, it is imperative to fully process what’s involved in building and running an agency effectively.

What to know when setting up a freelance talent agency?

Are you a freelancer seeking to set up an agency? Here are some necessary considerations before getting started.

Finance

Businesses require sufficient funds to run day-to-day operations. It doesn’t matter whether you’re running a digital marketing, copywriting, or tech agency.

Thus, it is important to consider whether you have enough to pay your freelancers, cover other running costs, and still earn a salary for yourself. You must find a way to keep your agency afloat if clients pay late or never come through.

Effective leadership

Be sure to assess your confidence in your managerial and leadership skills. Effective leadership is necessary in transitioning from your solo craft into an agency.

How do you manage the business, and what goes into your decision-making? These and efficient problem-solving strategies should be well defined.

Marketing strategies

With an agency, you’ll need to attract more clients, notably, better-paying ones. So, you must also consider the exact industry you want to focus on. Also, you must determine how to go into sales mode, pitching to the right clients.

At this point, you might want to review and establish effective strategies. Consider building a strong online presence, establishing partnerships, and running campaigns.

6 Steps for building an effective freelance agency

It is no easy feat moving from being a solopreneur to running and managing an agency. It requires proper planning and structuring.

There’s a need to develop the right team and pitch to the right clients. So, here are some critical steps you must take in setting up an effective freelance agency.

1. Satisfy the legal requirements

The first step to building a freelance agency is sorting out the legal stuff. Most freelance businesses settle on the limited liability company (LLC) structure.

The major reason an LLC remains a go-to option is that it is simpler to establish. And maintaining such a structure is easier compared to a corporation. With an LLC, when the agency is sued, the claimants are not suing the investors or the firm’s owner.

Also, this structure ensures that the agency does not pay taxes. Rather, you, as the owner, will report and pay taxes only on the profit you receive.

Considering these insights, you must research the intricacies of forming an LLC. Assess the advantages and disadvantages to make a well-informed decision.

2. Create a pool of talents

At this point, you have to start scouting for skilled freelancers.

You need individuals whose expertise aligns with the agency’s goal. A good digital marketing agency will require the right marketing professionals.

You can always pick from an existing network of professionals. But if you don’t have one, you’ll have to search for an expert. Now, this is where it gets tricky! Finding specialists who can work and help you achieve your goals can be quite challenging.

You need committed individuals who will consistently deliver quality work. These persons must take client satisfaction seriously.

Impressively, various online job boards can help (for example, Fiverr and Upwork). You may need to work with a few freelancers for a while to find those who meet your requirements.

3. Pitch to big clients

Since you are aiming for larger, ongoing projects, it is important to find bigger clients. Only this way can you afford to pay your freelance team.

Maintaining a good rapport with your existing clients is necessary. However, you’ll also need to target a larger audience to keep customers rolling in. For this, you’ll need to build a strong online presence that outlines what prospects can expect.

You’ll need high-quality web pages that take potential clients through your offerings. Be sure to provide your portfolio and samples of previous work.

Using tools like Google Analytics, you can develop better customer acquisition strategies. You can do this by determining which content or pages convert prospects better.

Also, leverage search engine optimisation.

Notably, strong organic search results make your agency discoverable to big clients. Furthermore, being consistent helps.

Stay up to date with industry trends and continue pitching.

4. Use the right tools

For long-term success, you must invest in the right tools to make collaboration easier. These tools are designed to improve the quality of your services.

You can reduce administrative tasks with project management tools like Trello and Notion. There are also communication tools (E.g., Slack, Google Hangouts, and Skype) to keep everyone on the same page.

You’ll also need effective tracking tools (Toggl Track) to monitor deliverables. Furthermore, there’s a need for storage tools like Google Drive, Dropbox, and OneDrive. Again, you should always be willing to try out new technologies that can also facilitate work.

5. Build financial models

Proper financial reporting is fundamental to achieving successful business outcomes. This is also needed for smooth and healthy operations.

For startups, this is often overlooked, leading to serious issues later. Thus, it is crucial to document all data, including income and expenses, as well as assets and revenue.

At its core, robust financial reporting helps you measure the agency’s performance.

Financial statement analysis provides insights into profits, operational efficiency, and liquidity. With proper records, developing strategies and making decisions will become easier. This way, your agency can stay relevant within your industry.

6. Invest time

Time is a valuable asset for any business, supporting profitability and sustainability. You should be willing to invest your time when building a freelance agency. Doing so provides a solid foundation and reduces potential risks.

You’ll need enough time to communicate your brand’s value and services. This ensures that the agency is a proper representation of your ideas. Be sure to set expectations early, focusing on clients and freelancers who support the smooth running of projects.

Define standard workflows, deadlines, pricing, and deliverables. This way, you can achieve long-term goals while keeping clients happy.

Common Issues affecting freelance management

Proper management is a must for any freelance agency. And, it goes beyond simply communicating project details to your team.

It involves everything from hiring/onboarding to client acquisition. Resource management and payment disbursing are also part of freelance management. Given these technicalities, here are freelance management challenges and how to overcome them.

1. Scouting for talented individuals

The hiring process for freelance talent must be swift to ensure projects are handled properly. However, this can be quite challenging.

You need individuals who’ll work hard and apply their problem-solving skills. Well, you can leverage freelance job boards to find the right person.

Pick someone willing to work immediately once newly approved projects roll in.

2. Onboarding your team

Onboarding a freelance team can be quite tedious, requiring extensive documentation and coordination. This process could delay deliverables.

You can save time by hiring individuals with a good understanding of the tools your agency uses. They should be able to engage in smart communication and documentation using appropriate electronic tools.

3. Weak financial control

With ongoing gigs and returning clients, more money flows in. But if not managed properly, this business may incur long-term losses.

Thus, it is important to maintain accurate financial data to prevent financial leaks. Such leaks could stem from hiring and insufficient project briefings.

It could also be due to poor compliance with penalties or subpar deliverables.

4. Compliance with overseas laws

As your agency expands, you may likely work with freelancers abroad. Navigating these foreign hiring laws may be tricky.

The business may even face penalties if it fails to comply with labor laws. Thus, you must seek reliable ways to stay on top of such legal requirements.

Look beyond the freelancer’s ability and verify the individual’s identity, job status, and compliance with local labor laws.

Conclusion

Many people began their freelance journey as a side hustle. But it sometimes quickly grows into something more. As a freelancer seeking to establish a freelance agency, you must take certain critical steps.

There is a need for proper planning and adequate business marketing. Also, you must identify your target audience and provide services to the right clients. Ensure you hire skilled freelancers who have the agency’s best interests in mind.

Furthermore, focus on incorporating effective tools for communication, project management, collaboration, and storage.