What Is a Freelance Agency, and How Can I Build One?
Discover what makes an agency different from a solopreneur's business.
Building a freelance agency might appeal to you if you are making the decision between a business that relies on you as the primary person to complete the work and one that instead relies on a team of subcontractors to help you deliver client projects.
Freelancers have to make an important decision on how they will run their business from the time they set it up. Most default by setting their business up as solopreneurs, meaning that they alone are responsible for getting clients and completing client work.
A solopreneur freelancer might also leverage outside support in the form of a subcontractor, such as someone who completes pieces of the client process or handles the backend administrative work. This does not mean, however, that said freelancer has an agency.
What is the agency model?
The freelance agency model refers to making a conscious decision to install one or more people in the role of getting clients and serving as a project manager and other subcontractors completing the actual client work. In this situation, it is the responsibility of the business owner to establish prices high enough to account for the additional costs in the business. For example, a solopreneur freelancer only has to worry about paying their own taxes and business expenses. Therefore, they can likely charge a lower rate than what an agency would charge.
The agency's value proposition is typically that they have access to vetted expert freelancers. To account for the additional time editing work, project management or other marketing expenses that the agency owner must spend, the price of agency work is sometimes higher.
However, this is not always the case. Freelance agency work might end up being less expensive than an individual freelancer based on the cost that the company owner is charging to their clients. For example, some established content writing agencies sell content at $40 per page and pay their writers $20 of each page. You may be challenged to find a qualified individual freelance writer who would be willing to accept that rate.
Why agencies can benefit clients
The promise from a freelance agency is reliable work delivered on time and likely in bulk with a pool of subcontractors behind the scenes to help with it. A freelance agency might make more sense for you as an individual if you don't want to be the one completing client work and have excellent leadership and management skills. You can always adapt your existing freelance business from the solo model to the agency model and back whenever you choose.
Agency vs. solo: What’s for you?
It's important to think about your specific personality traits and what appeals to you most when making this important decision. A freelance agency relies on someone at the top of the pack to be responsible for obtaining and setting up clients. This could be the owner of the company who does the primary role of marketing and onboarding these clients, at which point it becomes the responsibility of individual subcontractors or a project manager to ensure that all tasks leading up to the deliverable are completed on time.
Individual subcontractors used by an agency will have their own payment arrangement structured with that agency and might not even realize the amount of the markup between what they are being paid and what the agency is charging the end client.
A freelance agency enables you to scale a freelance business much more quickly than you could as an individual in most cases, however, it also pulls much more of your time away to the management and leadership aspects of running a company. I discovered from personal experience that the freelance agency model was not best for me because I did not enjoy the process of onboarding, training and ultimately firing different freelancers.
Taking on the responsibility of completing client work myself meant that it was always completed on time and I did not have to manage someone else and their inability to turn things in on deadline or meeting relevant guidelines I had previously established.
The decision of whether or not to establish a solo or an agency model is ultimately up to you, but think carefully about what you want to achieve out of your freelance business and your own personality before making this decision.
Entrepreneur Editors' Picks
These Co-Founders Are Using 'Quiet Confidence' to Flip the Script on Cutthroat Startup Culture and Make Their Mark on a $46 Billion Industry
My 7-Year-Old Daughter Started Selling Eggs. Here's What She Taught Me About Running a Startup.
Why You Need to Become an Inclusive Leader (and How to Do It)
Career Transitions You Can Make in Your 40s and 50s
Billionaire Naveen Jain Is an Expert at Disrupting Fields He Has No Experience In. His Secret Sauce for Building Multi-Million Dollar Companies? 'You Have to Come as Naive.'
4 Principles to Develop Next-Level Leadership at Your Company
This Filipino American Founder Is Disrupting the Beverage Aisle by Introducing New Flavors to the Crowded Bubbly Water Market