You love the freedom of freelancing and you cannot imagine ever working for someone else. However, running a service-based business means that at some point you’ll inevitably hit the earnings ceiling. Yes, you can always raise your prices and negotiate better deals with clients. But still, you won’t be able to take on more work than you can muster alone.
Here’s a big question you need to answer honestly: do you want to stay in the freelance economy or do you want to transition into entrepreneurship where you actually grow a business?
If you answer is the latter, there are several things you’ll have to figure out before you can start introducing yourself as a founder.
1. Make sure you understand what you are signing up for
Right now, being a freelancer, you’re a gun for hire. You’re regarded as an expert in your field and a technician available to the one who needs your service. As an entrepreneur, to be successful, you should get that being a talented technician is only part of the puzzle.
This is because the entrepreneurial mindset focuses on the larger picture and creates a system based on business goals. So, what are your goals? And how can you transition to them? This requires some careful thought and analysis of your skills and how you can market them as a business owner, not a freelancer.
Perhaps you can bundle your services into product packages and remove yourself from the delivery of those by hiring a team? Or you are eager to explore the more passive business ideas that would allow you to scale more rapidly and “remove” yourself from the business to some extent. Finally, you can always have a clean start and build a startup from the ground up, based on that idea you’ve been cherishing for years.
2. Change your sales process
Running a business means that you now need to interact with a somewhat different crowd including potential investors and customers. You are no longer a 'gun for hire,' but an entity with the added challenge of communicating your value and navigating a more complex sales process as a result.
“It takes a huge mindset shift,” said Kris Lal, CEO of Curator Social. “We've increased profits year on year seven fold, by simply switching from selling our services to problem solving for our clients. Stay true to your strengths, firm with your pricing and build value as opposed to discounting your services. It’s the difference between becoming a valuable partner as opposed to a replaceable supplier."
3. Prepare to delegate
Many “freelance founders” often have the problem of giving away the reigns. They are so used to putting out all fires by themselves that they often forget that it’s no longer their responsibility to do so. As a former app developer, you may be tempted to rework the code produced by your new hire. But it’s no longer your job to provide the service. You are now in charge of running a business. This means focusing more on project management, networking, sales and other executive duties, instead of wasting your energy on lower level tasks that could be handled by someone else.
To be a successful founder, you’ll need to learn how to delegate effectively. One founder mentions that one of the hardest things for him during the transition was digesting that he no longer had the luxury of taking a random day off and putting in more hours the other night as he used to do as a freelancer. “Now I had a team of people relying on me to make this business a success–and to pay them on time. For their sakes and mine, I could no longer afford to take a day off,” he said.
4. Scale slowly and carefully
Don’t rush to higher a bigger team. Instead, focus on hiring and cultivating a well-oiled, lean team of few who can accomplish a lot. Invest in solid business systems and work tools that will help you streamline the routine processes. Keep a close eye on your growth metrics and make the next move only when both your guts and the numbers tell you it’s the right time.
