Your Freelance Business Model Options — Direct Client vs. Agency

By Liz Alton, Contributor, on March 6, 2017

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Freelancers have numerous business model options from which to choose. Will you work directly with clients or source opportunities through agencies? Each approach offers unique benefits. For instance, I like the support, structure, and access to interesting brands agencies provide, while removing much of the client management and administrative activities.

But agencies can carry some disadvantages, too. Here’s a closer look at what freelancers need to consider when deciding where to source their work and how to grow their businesses with each avenue.

The Benefits of Agencies and Talent Platforms

You can definitely find clients through agencies and talent platforms. According to AdAge, U.S. agency revenues topped $46.8 billion in 2015. Often, you’ll initially connect with an agency for a single opportunity, like designing an infographic or writing blog posts. That can quickly balloon into multiple accounts and a steady, recurring workload. I still work with the first agency that hired me when I went freelance several years ago, and they’re happy to load me up with accounts as my schedule allows. However, there are pros and cons to the agency model, including:

  • A steady flow of clients. Agencies typically have a ton of client accounts. If your work with them goes well, they’re likely to use your services repeatedly, whenever there’s a good fit. These leads come to you, which saves you time marketing and increases billable hours.
  • Access to interesting projects. Many of the largest brands, like Fortune 500s and hot start-ups, use agencies. As a result, getting on the roster with an agency can quickly build an attention-grabbing resume. Large brands often come back to freelancers who understand their ecosystem. As a result, freelancers may work on projects for the same client across multiple agencies in long-term relationships.
  • A clear process. Every agency has a different workflow and production strategy but typically follows a certain process, which includes scoping, developing a creative brief and reviewing and finalizing the project. Following a clear process makes it easier to scope out a project, but this may result in less flexibility when it comes to execution.
  • More layers, less client interaction. Agencies generally take care of client management. For freelancers, this saves time, though it can also mean coordinating with more reviewers, including agency staff and the client. You’re also further removed from the client, so hopping on the phone to answer a question or receive an answer to a question is complex.
  • Strong support network. Agencies will often provide a support system. For example, content agencies may offer editorial and SEO support, as well as technology platforms to format and submit your work. While I work with both a copy editor and a researcher to produce my stories, the additional layers of support result in a more polished product.
  • Lower profit margins. If a company is willing to pay a certain fee for a project, you’re likely to be paid less as an agency freelancer than if you worked for the client directly. It’s not always true, but the agency support comes at a total project cost.

Work Directly With Clients

Working directly for clients is another option for freelancers, which can come with higher flexibility — and higher profits. There’s more up-front marketing involved to land these clients and more management required during project delivery. But when you work directly with the client, you have immediate access. Whether you’re scoping out the project or addressing a mid-project question, you can pick up the phone and contact the client immediately, making it easier to deliver on the vision the first time.

Landing direct clients often requires more up-front marketing, but this can lead to long-term, profitable relationships that may last for years. Agency relationships can end your ability to work on a brand’s project, but as a direct resource, you may be more insulated from internal marketing and creative shifts. There’s always the chance your clients will shift to the agency model or change directions, too.

A direct relationship with a brand may be more profitable, if you can deliver the same level of end-to-end service. That can result in higher profits, though you may incur higher costs if you subcontract areas of the project or employ your own team for support.

Choose What’s Right for You

Each freelancer will thrive within a different model. There are four questions that can help you decide which approach is right for you:

  • How much do you enjoy marketing and sales? Would you trade some potential profit for access to opportunities you didn’t need to sell?
  • Do you prefer hands-on client management and engagement, or do you prefer an environment where the majority is taken care of for you?
  • Is creative control important to you, to the degree you’ll recruit and supply your own support (for example, editing services)? Or are you flexible and more interested in a streamlined delivery process, which might mean agency creative oversight changes your product?
  • Do you thrive as part of a structured process with clear expectations, or are you comfortable scoping and navigating each project as it arises?

Ultimately, there are many paths and business model options for freelancers. It’s important to try out different approaches, like talent platforms, agencies and direct client relationships, to see which ones you like best. When you pay attention to what it takes to succeed in both contexts and choose the model playing to your strengths, you’ll set yourself up for long-term freelance success.

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