I currently work with a fantastic team of five designer/writers and we work together on GraphicDesignBlender.com. In addition, I’ve made it to the point where if a new client contacts me for a design project, I usually assume the role of freelance creative director instead of freelance designer, hiring out other designers, illustrators, etc and guiding them in the direction I want the project to go.
The definitive guide to going Freelance.
Growth and the Future
In freelance, there’s a ceiling on how much money you can make if you’re simply selling your time. Even if you’ve built up an amazing reputation in a specific industry and are charging top rates, your income is limited to the amount of time you have to execute. When you’re not executing, you’re not making money – It’s that simple.
Consider the ratio of quality to time and how it affects future projects. It’s easy to think the more projects you can slam out at a faster rate the more profit you’ll make (which is true if you make a commodity product) but if the quality suffers you’re killing your long term potential because you won’t attract your dream clients.
While it’s important to find out exactly how much work is too much work, you still need to consider how you can work smarter and still make cash. What if you want to work fewer hours so you can spend more time with your family, hobbies or other interests? What options do you have that won’t necessitate a Mac and Cheese diet?
One option is a passive income, which is revenue that is generated when you’re doing barely any work. Active income is what the freelancing industry is built on – you earn income when you’re actually working.
As an example, if you run a hot dog stand, every day you’re out cooking and selling hot dogs, you’re making active income. When you come in off the corner and watch TV or have to eat dinner, the cash stops flowing and your active income is put on hold.
Now, if you were able to sell your hot dog recipe to other entrepreneurs and make commission off every hot dog they sold, you would be a smart entrepreneur who just unlocked a passive income stream. This results in a stream of business that requires no effort from you but drives revenue to your business.
The question is how can you do something similar for your business? Maybe you can launch your own information product to drive revenue? Maybe you can launch a subscription e-newsletter or an ecommerce store that sells posters or your creative work?
As a freelancer, you have skills that people want to learn about. Nathan Barry, a user experience designer has made more than $200,000 solely from information products in the last two years and has built a business around recurring revenue from these products.
An information product doesn’t just create a passive income stream, it also generates buzz and promotes your freelance services. Ignoring the power of passive income is a huge mistake. Even if your product doesn’t make thousands of dollars, it still builds your reputation and gives you additional credibility in your field.
There are third party software products that enable you to white-label them to your clients and earn some of the revenue from it. Campaign Monitor, for example, lets your clients log in under your account and send email campaigns to their subscriber lists. Every time they pay to send a campaign, the software automatically gives you a portion of the profit. I’ve personally woken up to an email from Campaign Monitor informing me they deposited close to $1,000 into my Paypal account for the month, and I didn’t have to lift a finger for it!
What’s The Next Step For Your Growth?
If you’ve already made the jump to full time freelance you’re clearly ambitious and a risk taker. If you’ve followed the steps in this book you’ll be a successful freelancer and come to a point where you have to make tricky decisions. You’ll need to decide whether you want to sustain your business as it is, invest time into passive income opportunities or take your company to the next level by hiring employees and building an agency.
You don’t need a Stanford or Harvard education to make the decision to start an agency. You simply need to look closely at what you want in life and understand what skills you have and need to run an agency successfully. It’s going to be important to make sure that your process is more streamlined, you’ll need to be committed to a specific pricing strategy and take the time to investigate what goes into running a bigger business.
For example, you need to look at key decisions such as hiring and employment. You may work with a handful of contractors right now but you will have to choose between hiring them as employees or keeping them as contractors – the price may work out to be around the same but the impact on culture, commitment and relationships cannot be underestimated.
When Shane Pearlman wrote a blog post about the comparison between life as a freelancer and life as an agency owner – these were some of the difference he highlighted:
As a freelancer:
- I have a few tools and very low overhead.
- I have 100% control of quality.
- I work on some pretty cool personal projects & most my clients are small to mid-sized.
- I have relatively few meetings.
- I work when I have the most energy.
As an agency owner:
- I need a pile of tools to track and coordinate all my work.
- I spend a fair bit of my time making sure other people don’t botch it.
- I get to work on epic big-name, big-impact projects.
- I spend more time looking for both cool projects and cool contractors (or employees).
- I have a lot of meetings.
- I work when my team & clients need me.
One of the things I’ve seen a lot of is people open their own business in order to concentrate on the thing they love to do. But often what happens is then they don’t hire people to let them do that.
These are just the opinions of one person. Every agency owner and freelancer is going to have different experiences with their business. The question becomes what matters most to you? What kind of work do you have an appetite for? What do you want for a lifestyle? What type of legacy do you want to leave?
At the end of the day, the step to go freelance was the first step towards living the life you want to lead. Making the leap from freelance to agency is an entire different beast and one that we’ll be sure to cover in the next eBook.
I have relationships with other freelancers and I can and do connect with them if need be.
- Build passive income from information products or selling an actual product that can be delivered quickly and easily. The ability to make money while you’re not working is one of the biggest benefits of a passive income.
- Consider what you really want when thinking about the next steps for your business. Understand the stresses that come with turning your business into an agency and the changes that will occur to both your lifestyle and work.
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