I am planning to launch an online agency that offers creative design, branding and press release writing as well as marketing consulting. While as a Marketing professional I can easily cover the management and consultancy part, I believe that i need to outsource other services such as creative design. I have the following questions: 1- Should I hire graphic designers and writers from the beginning? or deal with freelancers? 2- If I deal with freelancers what payment structure do you recommend? 3- Should I hire freelancers to be affiliated with me all the time, or facilitate communication between the clients and freelancers and take a commission from each job? 4. Should I disclose the freelance designers names or keep it all under my name? I'm concerned about quality and business continuity. This business model is still unexplored in my region and I will be offering services that are not offered on other websites.
I'll give you the answers that have worked for me, though I wouldn't say you "should" do this. This is where I found the best mix doing similar work.
1 - I would at the very least start with freelancers. There are a lot of great, talented people out there and this is the best way to meet people with whom you may end up having an enduring relationship. I have people all over the world in my freelancer network to whom I outsource portions of jobs.
2 - It depends on how you get paid. If you are bidding project prices then you need to try to match your cash flow planning against how you pay your staff. This take some light financial modeling in most cases. So you don't end up owing someone money when your client isn't paying you for awhile. You can design your terms around this if you are careful about it.
3 - My preference has been to bill the entire project under my name and brand, assuming I have a trusted team. I mark up what they charge me and then make the margin on it to the client. In certain instances I turn over the entire lead to someone in my network and take a kick back or commission on it. Again, it depends.
4 - My way of dealing with this is I control the project management platform through which everyone communicates. That way the "real" names are out there, but it's not all done on email. You will want to have non-solicitation agreements with your team members as part of your deal with them.
I'd be happy to discuss all of this with you in more detail. I've been using variations of this model for all of my consulting for more than a decade.
I ran an agency almost exactly like you're describing and had a lot of success by combining all of your ideas.
I started by hiring contractors to take on the parts of a job I couldn't handle myself. The contractors were put in contact with the client, but under my company's banner. This formed a brand without tying me to huge amounts of salary overhead.
Each project was negotiated separately. This allowed me to plan well, and my contractors had an incentive to work quickly (done in fewer hours meant a higher hourly rate). I charged a markup in the hours my contractors worked.
Later, I hired a few full-time employees to handle certain critical tasks that couldn't be contracted out.
This was so successful that I was able to leave the company entirely and my team still runs without me. I attribute this success in equal parts to honest communication with my team and clients alike, rock solid processes I put in place to create a consistent experience for my team and clients, and finding the best talent by offering good wages and near-total autonomy.
With some solid planning up front, you're looking at huge income potential. I'd love to discuss this further with you if you have questions.
Why not mix and match freelancers until you find the right fit for more long-term collaborative relationships?
Rather than ask us about payment structure, instead ask your freelancers. Propose various rates and experiment with structure. See what works in various cases.
You'll soon get a sense for which people deliver how much quality, how quickly, and at how much cost to you.
By trying out multiple freelancers or agency partners, you'll expand your network and be less dependent on particular people. That will help with managing fluctuations in work volume as well – both on your end and on theirs.
Hey - I have been in creative client services for most of my career, ranging from running global strategy for fortune 500 companies to building websites for tiny non-profits. Hope these thoughts are helpful:
Use freelancers as much as possible until you get your feet under you. The main reason: no fixed costs to drain your cash during down months.
That being said, try to get one partner/hire early on who can pitch in across a number of categories - marketing, design, development, project management. It helps having a friend, and having another committed person can help scale/stretch drastically.
Present as a cohesive company, but don't be afraid to expose your financials to clients. This has been a selling point for me: "World class talent without paying for overhead" is attractive to clients.
Do fixed fee 99% of the time. No hourly.
Process is everything. All these services are so commoditized these days, that great customer service and a clear process can go a long way.
I would be in charge of the client relationship almost all of the time if you can. But, I would need to know more about your company. Generally speaking, relationships are the most valuable asset you have in creative services.
Hope that helps!
I've managed freelancers through my consultancy for the last 3 years. Prior to running my own business, I worked at an ad agency where I also managed a team of freelancers. Last year, my business generated more than $250k in revenue which was only possibly by working with quality freelancers.
I'd say yes, you should work with freelancers. You can refer to them as your "design team" when talking to clients and if they ask if they're employees, let them know they're contractors who you've built a relationship with and trust. You don't NEED to be the middleman between clients and the designer but it's a safe way to show that you're still adding value. I'd keep them behind the scenes and have everything come through you. You should keep the designs under your company name.
Happy to shed more light on this - Drop me a line if you'd like to schedule a call to chat.