Starting an Agency? 5 Things to Consider First
When you are thinking about growing your freelance business on Upwork, one option is to make the move from freelancer to agency—a business structure that enables you to collaborate with others to scale, take on larger projects, or transition into a new niche.
If you are ready to start an agency, here’s a look at some of the groundwork you might want to cover before bringing on your first clients.
1. Carve out what you want to be known for
Remember: You can’t do everything or serve everybody! Clarifying your agency’s vision and niche before you get started will help shape your agency’s brand.
Your brand is what your agency projects to the world—it’s the first impression you make on a potential client. A well-defined brand helps answer key questions about your business, such as:
- What is the value your agency offers to the world?
- What do you do better than your competitors?
- What unique position (aka your niche) do you want to occupy in the marketplace?
- What is your unique selling proposition (USP)?
Don’t have a vision or a niche for your agency? Consider these five questions before moving your agency forward >>
2. Decide how to structure your business
Consider which agency business model you will use:
- Build a geographically distributed team, bringing in complementary skills by engaging freelancers as agency members. This is the most common path for existing freelancers to take. This type of agency typically uses the Upwork site as its core sales channel for new projects and clients.
- Follow the traditional model, which may include agency members working full-time at a fixed salary, even co-located in the same office. This path is typically taken by existing agencies—already established offline—who use the marketplace as one of several sales channels.
3. Learn about legal and tax considerations
Agency owners are exposed to greater risks and liabilities than individual freelancers. For example, owners are responsible for the agency’s work, the proper classification of agency members, and paying their team in a timely way.
If you’re based in the U.S., set your new agency on a strong foundation with one of these common business entities: Sole proprietor (the “default” option to claim any personal income), partnership, C-corp, S-corp, or LLC. If you’re based outside the U.S., your country may have similar options for registering your business.
Regional and federal laws can differ, so you may want to consult with a local legal/tax advisor to choose the best entity for your business. Freelancers who work with your agency should also be aware of their local requirements. Proper guidance now will help avoid problems down the road.
4. Create your agency account and profile
It’s easy to set up an agency account. Keep in mind that in order to create an Agency account you need to have an Agency Plus plan.
One of the most important pieces for you to focus on? Your agency profile.
An agency profile is much like a freelancer profile—it should showcase your team’s skills and the services your agency offers. It’s also part of what brings your agency’s brand to life.
You can also include information such as:
- A detailed overview of your agency (i.e. background, niche, service philosophy, and approach to work)
- Agency skills (top 5+ skills your agency offers)
- Portfolio—not just work samples but case studies that show each client’s industry, your solution, project scope (skills, time, $) and how you managed the project
5. Define agency roles
As a freelancer, you wear multiple hats: admin, finance, marketing, business development, and more. As an agency owner, these roles are magnified—with other management and leadership responsibilities added. Ask yourself which roles you’re ready to take on yourself, and which you can delegate to or share with a reliable team member or co-founder.
When building your team, distribute responsibilities among your team members. Finding the right role for each person isn’t just about their technical skills or experience, it is also about their ability to drive the work they’ve been given and move the team’s reputation forward.
An Upwork agency account allows for different team members to be assigned different roles, such as managing the business, supporting admin, or financial functions. You can also designate which agency members have permissions to view different areas of your agency account.
Ready to set up your agency account?
There’s no doubt that launching an agency takes preparation. Once the groundwork is done, however, you can start building your new business by finding projects and learning some of the processes that can help your agency keep running smoothly.
This article is part of a series written to help freelancers decide whether to launch their own agency and navigate the early steps toward success. Want to learn more? Check out: