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Freelance to “Real Business”: Lessons from a one-year-old Digital Agency.

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LinkedIn told me that I have been running my digital agency, Kintsugi for a year now, so I thought I might take the opportunity to share some lessons I have learned making the leap from freelancer to “full Agency”.

I have been ‘in business’ for over a decade, and yet, I continue to be surprised and learn something every day. Hopefully, some of these lessons can be of help to others. 🙂

This article was first published on LinkedIn a few days ago.

Lesson 1: Solo is not a *real* business.

I know I am going to cop some heat for saying that, but let me finish.

Before I decided to go “full Agency”, I freelanced for 10 years: first as a web designer, developer & Flash animator, then, as the “digital” speciality evolved… became everything else.

I took on varied projects, from design to animation to SEO to code. I learned as I needed to, never really specialised, learned everything the hard way and paid my dues, and built demand purely through the quality of my work. I never thought I was a business (or even in marketing!)… I was just being paid to learn and make stuff.

But, eventually, the government said “hmmm, you have a business now”, and I had to accept that I was actually one of those business types. And I never looked back.

However, I also never really looked forward. I didn’t have a business plan or a strategy. I landed on my feet, got by with my smarts and excellent work. I was in the fortunate position of people just coming to me without having to develop any real sales funnel, and it was enough to sustain me financially.

I had no desire to grow, and the one time, in 2009, I thought I might try to go “full Agency”, a really bad hiring decision almost destroyed my business. So I decided to stay solo.

I basically had a job, with more erratic cash flow.

I am going to say this: a solo business is nothing like one where you have to work with other people on a daily basis, who live and die on your performance. I have vastly underestimated how much was living in my own head: processes, strategy, expectations, client briefs, where the files are stored… you name it. On top of the additional complicatedness of the accounts and admin and responsibility, you need to work differently: you need to communicate, lead, be organised.

And deliver the actual work.

And, actually use the project management tools you pay for. Sigh. Yes, Paul, I know.

Lesson 2: It is very, very hard to do the right thing and stick to your values.

I often go after other Agencies for being crap and immoral and too focused on themselves over their clients. Many are. I can think of 5 in Perth that I wouldn’t piss on if they were on fire. There are also a handful of excellent ones. Most are somewhere in the lower-middle.

In this last year, I will admit, as an outlier or critic, it is easy to say how you’d do things differently. But, when confronted with the financial reality of this industry — actually living those ideals is challenging.

If you let it, this industry can make you feel like it is a race to the bottom, with every man and his dog who did a 6-week Masterclass claiming to be a consultant or strategist undercutting you. Or with 21-year-olds who do a single marketing unit and think they can replace 20 years of industry experience with Instagram influence and a snappy blog post.

I love clients. I fight for clients. I am on their side. However, we do have a problem that we all need to figure out. And it is really, really hard to say this without sounding whiny….

The unfortunate fact is that most clients don’t want to pay what it actually costs to run a local, ethical business with senior staff and quality creative. They’ll make all the right noises, but then haggle us down, complain about every agency they work with and play us off against each other, ask for proposals that take 3 days to write for a $500 job… and then expect almost full time service from 3 Senior FTE for a few thousand dollars. Then, when they don’t get it, they’ll hop to someone who will do that, and start all over again. I have written about this before.

On the other end of the spectrum is the Agency who charges thousands of dollars a month+ for doing absolutely nothing, or marking up Fiverr work. I have definitely inherited some customers from those guys, too, and it makes me angry, but…if I am honest, I almost understand how they get there.

It’s the easiest choice to make.

It has been very, very difficult to rise above this problem, especially in our first year of business. We are frequently squeezed and still live month to month, have bills to pay and mouths to feed. So far we have managed to stay true to our values and turn away that kind of client, but I understand the temptation to call up the Philippines. Honestly, if I didn’t feel so strongly about it, it would make business sense.

Which brings me to my next Lesson:

Lesson 3: Learn to say no. Even when there’s money.

I grew my freelancing business based on the idea of never turning away paying work. If an opportunity presented itself with some money attached to it, I would take it. I was in my twenties, I could just pull an all-nighter and get paid.

This absolutely does not work when it impacts other people. Also, at 38, an all-nighter is not a good idea. At all.

I have had to learn to say no when I get that bad gut feeling. Even when the money is good. Ignoring that gut feeling and red flags and taking on a bad gig just to get some cash has ultimately cost me tens of thousands of dollars, if not hundreds of thousands of dollars, over the years. If you can’t say no for yourself — do it for your good clients, who deserve better. Do it for your staff, whose morale will be poisoned for the entirety of their tenure. Trust me.

It works like this:

  • You have a handful of good clients, who trust you, who pay on time, who work with you. They understand that you are a business and respect you as such.
  • You take on a new client, who monopolises your (and your staff’s) time, doesn’t pay on time (these almost always go hand in hand), exhausts all of your physical and emotional resources. They aren’t paying full rates (because they haggled) so you can’t outsource it.
  • You find yourself neglecting your good clients to keep the bad one happy, dangling payment over you. You are well into the sunk costs fallacy, you need the money, and are still hoping to be paid… so you do “just one more round”.
  • Your workdays and priorities and morale are completely disrupted because you are now prioritising work that will get the immediate payments (or, worse, you let the bad client scope creep you, as they dangle payment over your head) so you can pay rent that month.
  • They still don’t pay, you end up with no money for your entire month’s work, and have unhappy clients because you took them for granted.

I did a bit of reflection after my last bad client, and I realised this pattern… that with each one, it takes an average of 9 months to repair the damage done to the business. No money in the world is worth the damage done to your client relationships and team’s morale. Sack them. Say no.

Turning down work, especially when money is tight, is one of the hardestthings to do. It’s easy to say no when you are sitting on cash, or can borrow money to keep a roof over your head. It is tempting to say yes and terrifying to say no. But trust me on this — it is a false economy, and my good clients deserve better. And believe me, it is far easier to upsell an existing customer than it is to get a new one.

I now turn down clients who don’t trust me, who try to monopolise my resources, or who disrespect my business in any way. It just isn’t worth it.

Lesson 4: You have to own, and work on, your shit.

I honestly thought I was a good boss, just because I am a nice person. This year has taught me that I am actually, sometimes, quite a shit one. I am a leader, and I am nice, but a leader and a boss are not the same thing.

But, I am learning and improving and growing.

I worked on my own for 10 years. Much like when you live alone for a long period of time before getting married — there’s an inevitable adjustment period where you have to get used to having other people around. You learn things about yourself — the good and the bad.

I struggle with delegating. I am a control freak. I panic when money is low and I take it out on everyone around me. I want everyone to be able to read my mind and do things my way. I am terrible at admin and I NEVER write stuff down or use our PM software. I have a short fuse and can be a word-cobra in the heat of the moment. Especially with my husband, who is also highly skilled and sometimes has different ideas to me. Sigh. That man is a Saint 🙂

Look, I already knew that I bark at people when I am stressed, and I knew I had ADHD & stress triggers my mood disorder, but I have had no choice, but to grow as a person and as a leader more in the last year. On the flipside, you should know I also have a number of excellent qualities, and some that I am unsure where to put them (ie too honest, too soft spoken, not polished or slick enough as a salesperson…)

I can say this openly, because I am working on it. I know many bosses who have these problems and don’t work on them, so maybe I am not so shit after all? The important thing is knowing that you can’t grow your business without stretching yourself, facing your ugliness and trying to do better.

Final thoughts

I know this is quite long, and if you made it to the end, thank you. It is quite a strange experience, going through the ‘startup phase’ with the open eyes and caution of someone who has had businesses (and succeeded and failed) before. I honestly thought I knew all there was to know, but things are just so different this time around.

I hope that I will get to stay on this path. It is rewarding, I get to do what I love every day, and I feel very humbled by the support I have from our friends and clients throughout.

We have somehow survived without a website for the last year, too… but we are launching that very soon. Of course, client work always takes precedence, so we have to plug away at it in the background, but it is coming soon.

Have to put some sort of CTA, right? So, if you need web stuff, I’d love to be able to write about scale and its challenges (especially with the “staying true” part) soon. I am terrified of that next big step, and I would love for you to help me do that so we can share in this wonderful, humbling adventure.

Much Love,

Téa

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