When you decide to launch an agency on Upwork, you may feel like you have nothing but opportunity. With so many possibilities, however, finding a clear place to start can be almost overwhelming.
In this article, we highlight seven things to consider:
- Define your agency’s primary services
- Develop your business model
- Identify your audience
- Set goals from the start
- Create your pricing structure
- Build a winning team
- Prep your business for growth
We’ll share insights and ideas from agency owners to help you decide what might work best for your business. Let’s get started!
Define your agency’s primary services
“Focus on a very specific set of core service offerings at first. Do incredible work for your clients and establish a very strong reputation on Upwork through your Job Success Score and public client feedback.”
— Peter Korbel, Owner of 135 Madison
If you’re already an established freelancer, starting an agency can be a natural next step—a way to expand your capacity, collaborate with other professionals in your network, and take the lead on larger and more complex projects. Maybe you already have a successful agency and are adding Upwork as a new way to connect with new clients.
As you set up an agency profile, you’ll be asked to choose an overall service category. The most popular categories for agencies on Upwork are:
- Web, mobile and software development
- Sales and marketing
- Admin support
- Design and creative
- IT and networking
- Customer service
Once you select a category, Upwork will automatically suggest a list of service sub-categories to choose from. Before you can confidently make a selection, you’ll want to clarify what your agency will offer! For example:
- What products or services can you consistently deliver at a high level?
- What problems can your agency’s knowledge and expertise solve?
- How can you package skills and expertise to deliver value and generate results?
- Are your products or services scalable?
Start with what you know best. The more you establish a reputation for outstanding work, the more potential clients are likely to notice and come to you.
Peter Korbel owns 135 Madison, an agency that prepares investor-facing material for busy startup founders looking to secure capital. Korbel was inspired to launch a business consultancy that’s rooted in his experience raising funds for his own startup ventures.
“All conversations start with a pitch deck,” he explained. “You must be able to present a well-thought-out and compelling business narrative to galvanize investor interest and inspire confidence in your team’s capabilities to execute. I saw a major opportunity to help other founders get this right.”
Develop your business model
A business model explains how your agency will make money, providing a high-level description of how the agency will work, from key employees and collaborators to marketing and finances.
One popular way to think this through is the business model canvas, a one-page reference that captures:
- Key partners
- Key activities
- Key resources
- Value propositions
- Customer relationships
- Customer segments
- Cost structure
- Revenue streams
Image created by Strategyzer
Mapping out a business can feel intimidating. Even if you think you know how your business will operate, it’s really your best guess until you launch and start making money. And that's OK!
“You’re probably wrong, but take your best shot.”
—Guy Kawasaki, Entrepreneur
The reality is that businesses learn most by doing the work. As entrepreneur and venture capitalist Guy Kawasaki said: “Write deliberate, act emergent.” When planning a business, he advised, act as if you know what you’re going to do. As you start to execute your plan, however, stay flexible and adjust as you learn.
Identify your audience
Your target audience has two essential qualities: They need your help and they’re likely to hire you. This ideal customer may also be determined by:
- Who your team can realistically reach and pitch to
- The language(s) or location(s) your agency can serve
- The size and scope of project the agency has capacity for
- The industry your team understands
If you've been working as an independent professional, analyzing your existing clients can help you better understand the next-level clients you want to work with. If you're starting an agency from scratch, however, you’ll need to lean on market research for better insights.
Market research helps answer questions that can aid you in making better decisions as your agency grows. There are typically four areas to explore: Your industry, the competition, your customers, and the agency itself.
You’ll likely draw on four types of research:
- Primary research is first-person research, such as surveys or interviews, that is conducted by you or someone you hire and tailored to your current needs.
- Secondary research relies on information that already exists, which might include industry research, white papers, media coverage, or internal data you collected in the past.
- Qualitative research uses non-numerical data—like text, video, or audio—to gather more subjective information, such as opinions and attitudes.
- Quantitative research relies on numbers and hard data, the kind of information that can be collected through closed-ended questions to test assumptions or measure behaviors.
To avoid stalling in research mode, focus on getting the answers you need to make the most pressing decisions.
Set goals from the start
Agencies often consider goals that highlight business areas such as revenue, client relationships, talent development, sales, or diversity. For example, when Peter Korbel launched 135 Madison, he set a two-year goal for earnings and client satisfaction. “My first goal was to set a gross revenue target, for my independent business and agency, of $500K while maintaining a 100% Job Success Score,” he explained.
The most productive goals are SMART.
SMART is a formula designed to help set goals that are:
- Specific. Clearly state what needs to be accomplished and who’s responsible for it.
- Measurable. Make your goal quantifiable, so you can track your progress and know when you’ve succeeded.
- Attainable. Challenge yourself to achieve more, but if every goal is too much of a stretch it’s easy to get discouraged.
- Relevant. If a goal doesn’t help you build or grow your Upwork agency, you risk wasting time on something that ultimately won’t have an impact.
- Time-bound. Give yourself a specific timeframe with a deadline to help keep focused and on task.
SMART goals for an agency could include:
- We will reach an average project size of $10,000+ by the end of the agency’s first year.
- Each month, every agency member will connect with an independent professional who might collaborate with the agency on future projects.
- By the end of our first quarter in business, we will have automated at least one lead-generating workflow.
A common approach is to divide yearly goals into shorter plans that can be tackled every quarter. Entrepreneur and career coach Allison Walsh wrote in HBR that 90-day goals are often used by high performers.
“When we’re looking at one major goal, we tend to see it as one action. Often, we become overwhelmed and put it off until a later date,” she said. “Instead, break that one major goal down into smaller pieces and do one thing every day that gets you closer to it. It will feel much more manageable.”
You can achieve a lot within three months, which makes it a good timeframe for establishing a routine or reaching a milestone. However, it’s also a short enough period of time to keep your deadline in sight. Shorter milestones also allow time for you to change course if the market changes or things don’t progress as expected.
Track goals on Upwork
As an agency on Upwork, the My Stats page will provide insights into any exclusive agency freelancers on your team. These details include:
- Marketing effectiveness. How many people view your exclusive agency members’ profiles.
- Application style and results. How often exclusive agency members win projects compared to the total number of proposals submitted.
- Communication effectiveness. How responsive exclusive agency members are when responding to job invitations from potential clients.
This information can help identify areas for improvement and enable you to track progress toward sales and service goals you set for your agency. You can also generate weekly reports for your agency and check billings and earnings.
Create your pricing structure
An agency’s pricing structure explains how clients will pay for its services. This is where your business model meets your bottom line.
On Upwork, the two most common pricing structures are fixed price and hourly.
- For a fixed-price or “flat-fee” project, the agency and client agree to the project cost upfront. Payment is then made by milestone or upon delivery of the completed work.
- For hourly projects, clients pay by the hour according to time tracked—automatically or manually—through Upwork’s Work Diary.
For example, if you intend to offer all-inclusive packages to your customers, a fixed price might be ideal. If your agency will provide as-needed services without a clear scope of work, hourly may be a better option.
Standardizing your pricing before you start taking on clients can help create a better customer experience. For example, knowing your pricing improves:
- Transparency. Clients do their own research and pricing is an important consideration. Even if you need more information about the scope of work in order to develop an accurate quote, providing an estimate upfront can help clients compare it to their budget and decide whether to continue the conversation.
- Consistency. Larger projects with bigger clients can translate into a longer approval process. If you outline a pricing structure in your proposal, but decide to do something different before the client has accepted, getting the client on board can be challenging.
- Confidence. For many clients, pricing is a signal that starts to set expectations of quality, results, and expertise. Standardized pricing can help underscore the value your agency can deliver and its position in the marketplace.
Considering your pricing structure as part of the setup process also helps because hourly rates are visible on Upwork profiles for agencies as well as individual professionals.
Build a winning team
As an agency owner, it’s up to you to decide how you’ll build a team. Some agencies have employees while others bring independent talent together to fit the needs of each project. Whatever your approach, finding and retaining great talent is essential to the agency’s initial success and long-term growth.
Maxim Kalin of Golden Team, a Ukraine-based web and mobile app development agency, said it’s important to ask: Why would an individual freelancer want to join a team—and why your team?
“Working with a team is powerful,” he said. “Working as part of an agency gives team members the opportunity to learn from each other, grow professionally, get valuable feedback, and enhance their reputations because of what you’re able to accomplish together.”
Here are a few team-building tips other agency owners have shared:
- Define the skills and level of expertise your agency needs by looking at your niche, ideal projects, and number of clients.
- Build your talent network by proactively promoting your agency, including through social media and offline networking groups.
- As you establish business processes and best practices, factor in activities that can support scaling, such as recruitment and soliciting referrals.
- Set clear expectations for any employees.
- Foster a positive and collaborative environment by highlighting the value of the work that’s being done.
Prep your business for growth
Once you’ve created an impressive agency profile, keeping the momentum going for business development will be critical.
Luckily, there are a lot of ways to help keep your agency’s sales pipeline full. Here are a few ideas:
- Build genuine relationships. Great relationships with clients are the basis for great feedback and repeat projects.
- Ask about future projects. Working with clients you already know helps shorten the learning curve, and forging long-term relationships increases the lifetime value of the client.
- Diversify your client roster. Working with a variety of clients helps to reduce risk and creates a buffer if one client’s situation changes.
- Get to know programs and perks for your agency. Upwork has a Top Rated program and Rising Talent program for established and new agencies, comparable to the programs that have been established for independent professionals.
Starting a new agency is an exciting time! By making time to prepare, you’ll be better positioned to move forward and scale your business with confidence.
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