DaedTech

Don’t Take Freelancing Advice from Freelancers

If you’re on my mailing list, you probably saw that I just announced a new podcast on which I’m a panelist.  The title, not coincidentally to this post series, is “The Business of Freelancing.”

So what are you to make of me having a podcast that dispenses advice for freelancers and writing a blog post telling you not to take freelancing advice from freelancers?  Do I need to channel Doc Holliday in Tombstone?

Apparently, my hypocrisy knows no bounds.

Well, no, I hope.  I like to think that, after a bit of nuance, I’m right both times.  But whether that’s true or not, I can at least stake a claim to logical consistency.

Freelancers and Business Owners

In the initial post I wrote for the series, I created a distinction between freelancers and business owners.  The latter reasons about business profit, whereas the former does not.

In that same post, I also introduced this image, sketching two career paths, stating that “freelancer” is just an intermediate step along one of two roads.

Put succinctly, the freelancer either starts to reason about profit and grows a sustainable business or else they simply wind up an employee again.  I overcame the “but I know a freelancer that’s been doing it for 15 years” objection by pointing out that “employee” doesn’t necessarily mean being someone else’s employee.

In another post in the series, I talked about the duality of the freelancer’s role as an “owner-operator.”  The endless freelancer is (technically) both a shareholder and the only employee of a business that earns no profit.

But they in no way behave like the shareholder and owner, so that becomes an unoccupied, vestigial role.  They focus, instead, on the technician aspects of their employee role — delivering website wireframes or code or whatever.

Think for a moment about what this means, if you look at their role from a career advancement perspective.

The freelancer is the sole employee of a business with disinterested, absentee ownership and no plans for profit.  For any employee, career advancement depends entirely on one of two situations: business growth or changing jobs.

The indefinite freelancer can have neither possible outcome, so all that remains is perpetual employment in a dead-end business.

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An Introduction to Profitable Business Models for Recovering Hours Peddlers

If you’ve read my last post and have been following my business of freelancing series, then you either took the red pill or the blue pill after the last post.  Full disclosure: I’m not sure which pill is which.  But let’s assume you took whichever color corresponded to “I want to stop selling hours of labor and not become a managing director.”

You’re going to move toward profit and away from hourly billing.

That’s all well and good, but you’re going to need to know what to do instead.  What should set your sights on as a new business model?

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Path to Freelancer Profit: Start an Agency or Stop Billing Hourly

In case you haven’t caught my recent posts, I’ve sort of inadvertently started an ongoing series.  I’ve now given it a category tag, so you can read the posts in sequence, if you’d like (though the tag shows them to you in reverse order).  This is another post in that series.

(Quick editorial interlude: you don’t see it in the comments, really, but A LOT of people are writing me direct via email/social media to comment about the series or ask questions.  I want to say that I really appreciate the feedback and enthusiasm.  And I also want to pre-apologize if I miss some things from you all.  There are dozens of you and one of me, and I do my best with the responses, on top of running our growing business.)

I’m not planning to recap the entire series history for each post.  But suffice it to say that, up to this point I’ve talked about how a “freelancing business” isn’t really a business and that moving toward business ownership in earnest requires you to reason about profit and think like an owner.

I’m mentioning this because so far I’ve basically just given you background information.  Don’t get me wrong — it’s important background.  But background nonetheless.

Time for Your First Concrete Action on the Path to Profit

So, I figured today I’d switch it up a little and give you a bit of decisive action: the first step along the path toward business ownership and profit.

It turns out the action itself is easy to summarize.  I’ll do it right now:

Decide whether or not you want to own an agency and have a “managing director” kind of role.

If the answer is “yes, then,” great!  You have your business plan.

If the answer is “no,” then you need a business plan.  And the first step toward having that plan is recognizing that you need to stop billing by the hour.

The agency vs. non-agency decision is simple to conceptualize, but it’s important to mull it over for a while. So much so that the only actionable ‘homework’ I’ll ‘assign’ here is to make that decision.  For the rest of the post, I’m going to explain why you have to make this decision.

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