Earlier this week, I came across a great article from Jamey Gannon called “Why You Shouldn’t Start an Agency.”
With the exception of the line, “When you become an agency owner, you stop being a creative,” I agree with just about everything she wrote.
You have just as much of a chance of maximizing your income as a solo freelancer as an agency owner. Sometimes even moreso. The math doesn’t lie. A high-level, solo freelancer keeping 90% margins will almost always out-earn an agency owner drowning in payroll, overhead, and Slack fires.
If you’re starting an agency to get rich, there are faster or easier ways. Become an investment banker. Learn anesthesiology.
But that doesn’t mean there aren’t great reasons to start an agency. Here are a few.
An agency is one of the easiest businesses to start.
You don’t have to carry inventory. You don’t have to buy supplies, other than a computer. You don’t need certifications or permits. You just do a thing for a person and they pay you. Or even better: they pay you, then you do the thing.
And it’s usually profitable from day one. Most people complicate it as they go along.
A freelance practice dies with you. An agency can outlive you.
There’s something powerful about building a thing that has its own momentum. Its own culture. Its own reputation separate from your name.
You don’t have to want generational wealth to want this. Some people just want to create a place where talented folks can do their best work. A machine that creates opportunity for others.
Nothing exposes your weaknesses like having people depend on you.
When you’re solo, you can hide. You can avoid the stuff you’re bad at. You can tell yourself stories about why you haven’t figured out sales or systems.
An agency rips those stories away. You get better at everything… not because you want to, but because you have to.
Or you don’t, and the whole thing falls apart. There are real stakes.
There’s a reason people climb mountains. It’s not for the medal. It’s for the knowing. Can I do hard things? Can I handle pressure? Can I build something real?
An agency answers those questions. I scaled my agency mostly because a mentor challenged me to see if I could.
If you’re competitive, building an agency is a good way to see what you’ve got. Some people need that answer more than they need the easy path.
Winning at agency building comes down to one thing: having way more demand than you can supply. The agency owners who figure this out create leverage. The ones who don’t crack this struggle.
Here’s an example. Your parents were dentists. They dragged you to all the dentist conventions as a kid. Their social circle were all dentists. You know that world inside and out.
Then you grew up and became a designer. You have a million ideas for things dentists need. Websites, branding, office design, trade show graphics.
You would crush it if you started an agency that serves dentists. What an unfair advantage.
Maybe you just love helping people. Maybe you love helping people who help people. That’s your heart.
An agency puts you on the front lines of that every day. Your team does stuff for clients, so you get to do stuff for your team too. If service is your happy place, you’ll love running an agency.
Wait, what?
I know. I said earlier that you can maximize your income as a solo freelancer just as much as you can as an agency owner.
You can.
But the ceiling isn’t the same.
The richest freelancer in the world is probably an elite lawyer or surgeon billing $5K an hour. Maybe they clear $5M or $10M a year. But they’re still capped by their time.
The richest agency owner runs a holding company… an agency of agencies. That person makes 8 or 9 figures. And probably works very little.
Freelancers have income. Agency owners have equity.
It’s not even close.
Don’t start an agency for the money. It can work, but it’s the worst reason.
Start one for the game.
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