Ask HN: Should i stay as a freelancer or start an agency | Hacker News Reader

Ask HN: Should i stay as a freelancer or start an agency

14 pointskiraken12 comments

I run a successful freelancing business, i have enough work to keep me busy, and even more work than i can handle. As it stands my work has no expenses, and my country encourages businesses that bring in foreign currency, so i'm exonerated from any sort of tax. Been thinking lately of starting my own agency, hire a few people rent a big office... the whole nine yards.

I'm used to keeping 100% of my income, but if starting an agency will help me grow, i don't mind making the change. I'll still be exonerated from tax, but i'll have office rent, employees payments...

What do you think? Should i make the change? And why yes, or no!

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To me, tax status isn't really a prime consideration. The big consideration is whether or not running a company is an attractive replacement to doing the technical work. The principal of an agency is responsible for the care and feeding of the beast. That means the primary activities are attracting and retaining clients; attracting and retaining staff; and billing and collecting revenue.

It's not twelve hour days at the keyboard. It's dinner meetings and human resource management.

Good luck.

You can make any change you want, you're the boss after all. But if you're currently seeing 'more work than you can handle' I'd suggest a quick road to an improvement is to simply raise your prices until you start seeing some rejects based on price.

That way you can make a higher jump-off point in case you do decide to go the agency route.

Good luck, whatever you choose!

Thanks mate. And i do realize that i can make any change i want, i just wanted to hear your inputs. Its a big decision to make, and i wanted to be well informed before i make it!

Agree that you can start raising your prices. If you know someone that does exactly what you do, and you trust the quality of the work, as a first step, you could start passing work to a second person, then add a third, things going well, rent some desk space, add fourth person, rent a small office...or work remotely and keep the overhead down. Comes down to how you want to spend your time.

I would test the waters with a contract employee first and have them work remote.

If you build a small remote team and things are going well you could think about an office.

You could even run an agency style business with remote employees as contractors so you don't have to do payroll or have the expense of an office. If most of your clients are remote I would avoid the expense of an office. Unless you chase local work and need a place for meetings and to show off the team.

Good luck expanding your business.

I don't think remote subcontractors are a good plan to start with.

The main challenge when moving from a single freelancer to an agency is not the salary payments, but becoming the manager responsible for other people's work.

* The entire point of starting an agency is taking on more, larger projects. This means more discussions, negotiations and planning with clients.

* With more than yourself working on the project, suddenly you need to start communicating and planning among the developers. You need to start estimating the complexity and time required based not on your own, but other people's skills and experience.

* You take the risk of having to deliver the project to the customer on time and on budget even if your employees or contractors fail you.

* You take the risk of paying out to employees or contractors, even if the client does not pay you.

This means that you need to dedicate a significant portion of your time to "management" rather than billable work. Even with a part-time remote contractor, all these issues are present, and you will get less rather than more work done at first.

All friends who I have seen starting successful agencies have used the "partnership of 2-3 freelancers in one office" as the starting point. You work together daily, so that you can quickly solve any planning and estimation issues. You work as partners not employees/subcontractors, and take the risk of not getting paid equally.

Once that partnership is going smoothly, then you can start scaling out by hiring employees or subcontractors. Having 2-3 senior, trustworthy people is important for that - then you can afford to split risks, split management overhead, and cover for each other when someone goes on holiday or sick leave. Doing it alone is very difficult.

Regardless of field, the smart advice I've repeatedly heard and that I pass on is that, when you become a small business owner, you take on two jobs.

Once, the service you are providing. Two, running the business.

You should -- you need to -- think of them as two separate, full-time jobs.

I've repeatedly watched people, including family members, struggle with this. And failure to understand and plan for it, going in, and to address it pro-actively on an ongoing basis, seems to be a primary reason for business failure, here in the U.S.

If you know some people who have done what you're considering, who you think are genuinely smart, making a success of it, and whom you trust, have some honest conversations with them.

I also like jacquesm's alternative of raising prices, particularly if you like the work itself more than the idea of expanding into being an employer.

I second what others have said about raising rates. If you have more work than you can handle after that, then starting an agency will be easier.

The other issue is what do you like doing more? If you like human resources, project management, and sales, then an agency might be great for you. If you prefer computer work, then maybe just stick with solo. The types of tasks you do to be very successful in each role are quite different.

Depends what you want. I'd personally prefer to grow by developing a product rather than selling people's time. I imagine in most cases it is more scalable and profitable. Is there a common denominator to the work you do which you can turn into a SaaS?

May i ask what country you are in?

Tunisia

please, can you tell us more about working remotely as a developer out of tunisia? great to hear exporting businesses are tax exempt. how is the internet connectivity?

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