At first, freelancers earn more money by taking on additional clients. However, there…
At first, freelancers earn more money by taking on additional clients. However, there is a practical limit to how many clients a single freelancer, working alone, can handle. Eventually, a successful freelancer will be faced with more work than he or she can handle alone. That’s usually when the question of growing your freelance business usually comes up.
By growing the freelance business, I mean adding additional people to your business efforts so that you can handle additional work (and earn the additional income that goes along with it).
In this post, we’ll discuss the growth of your freelancing business. We’ll examine the best time for a freelancing business to grow and also take a look at several options for growth.
What to Ask Before Growing Your Freelance Business
Before you decide to grow your freelance business, you need to ask yourself the following questions (be honest):
- Am I really getting more requests for work than I can handle alone, or do I just need to manage my time better?
- Are my rates high enough that I can afford to pay another person and still earn a profit myself?
- How much additional business would having another person on board bring to the business?
If your flood of work is due to poor time management on your part, then you are probably not really ready to expand your freelancing business. The best thing to do in this situation is to organize your time a little better. Once you free up more time through better organization, you’ll find that you can take on more paying projects.
Considering your rates is also an important factor in determining whether your business is ready to expand. If you’re charging the lowest market rates for your services, you probably don’t have enough profit margin to bring someone else on board. Remember, you need to pay that person a good rate and still have enough left over to earn a little from the project yourself.
However, there are times when adding another person makes sense even if your time management skills are not what they should be and your rates are low. If that other person can bring new business of their own to the table, teaming up can still be beneficial. The classic case of this is when two individuals have complementary skills. (For example, a web designer and a writer team up. Now the combined business can handle both writing and web design.)
Remember also that you may be able to free up some of your time for higher paying project work if you delegate some of your administrative tasks to someone else.
Now that we’ve looked at the question of whether your freelancing business is ready to grow, we’re ready to examine some options for growth.
Options for Growing Your Business
If you do decide to expand your business by adding others, you have several options:
- Bring a partner on board. In a partnership, you and the partner both share the responsibilities, decision-making, and ownership of the business (your partnership agreement will usually define what percentage of the business each partner owns). You also both share in the profits from the business.
- Hire employees. If you have a lot of work, you can hire employees. The benefit of having employees is that they are usually with you for the long-term, providing some consistency to your business. However, remember that you will be responsible for payroll taxes, withholding, and providing benefits.
- Outsource work. You can also expand your business by outsourcing work to other freelancers or to outsourcing companies. This choice allows you to delegate tasks only when you are too busy to handle them yourself. The drawback, of course, is that you may wind up using different people each time you outsource, which could have a possible impact on quality.
Do you have to bring additional people on board to earn additional income? Not necessarily. We’ll take a look at this question next.
Of course, there is an alternative way to grow your freelancing income even if you don’t want to bring additional people into your business. It’s simple, but many freelancers avoid it–raise your rates.
By raising rates, you eliminate the low-paying clients who may be draining your time. You’re free to provide a higher level of service to the clients who contribute more to your bottom line.
In the future, make sure to accept only clients who are willing to pay your new rates.
A Few More Thoughts
Remember that when you involve additional people in your business you are still ultimately responsible for the quality of the work that those people provide to your clients. This might mean that you need to implement a review process for checking over work before it is turned in to your clients.
If other people will be performing the work, you should be up front about it with your clients. Instead of saying things like “I will do this,” you should mention that “my team will handle this.” Most clients won’t mind, but a few want to work directly with the person who will actually be performing the work.
Now that your business is bigger, you may want to consider a different business structure. An accountant or an attorney can tell you whether you should incorporate your business.
What Do You Think?
Have you grown your freelance business beyond your start as a lone freelancer? Which option did you use, and why?
Are you thinking about growing about your freelancing business?
Share your thoughts in the comments.
Image by charlietakesphotos
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Posted: 2010-02-23 06:30:24