Site icon Stefan Georgi

Why I Hate the Agency Model

freelance copywriting

Joe Freelancer (JF) has spent the last few years as a service provider for his clients.šŸ‘Øā€šŸ’»

It was a struggle at first, but over time heā€™s become increasingly competent and confident in his skills.

His clients are happy and getting good resultsā€¦ šŸ‘Œ

And heā€™s even getting lots of referrals.

JF is making more money than at any point before in his career.

So, youā€™d think life would be goodā€¦

But the truth isā€¦

JF feels TRAPPED.

Why?

Because with more clients and more moneyā€¦

Comes more work and longer hoursā€¦

And this eventually leads to JF reaching a breaking point.ā›”

It happens on his wifeā€™s birthday, or during a vacation in Mexicoā€¦

A time where he ā€œshouldā€ be enjoying himself

But where, insteadā€¦

Heā€™s either totally preoccupied with thoughts of workā€¦

Or, heā€™s actually working nonstopā€¦

Even though itā€™s the last thing in the world he wants to be doing.

Itā€™s wildly frustratingā€¦šŸ˜±

JF had told himself that this vacation/birthday/whatever was going to be differentā€¦

That heā€™d be able to truly enjoy the momentā€¦

But instead, there he is, plugging awayā€¦

So he says to himself, ā€œsomethingā€™s gotta changeā€ā€¦

And thatā€™s when it hits him.

JF has what seems to be a revelation:

ā€œWhy am I the one doing all of this work anyways?ā€ JF asks himself.

ā€œWhat if I could just hire a team of people to do the work instead? That way I can just focus on getting clients (which I enjoy doing), while my team does all the heavy lifting (which Iā€™m tired of doing).ā€

And once he has this glorious ā€œinsightā€ā€¦

Thereā€™s this moment of elation.

JF has figured it out!Ā 

And he almost canā€™t help but laugh at himselfā€¦

Because itā€™s so obvious now, why didnā€™t he see it before?

So, without putting too much more thought into itā€¦

JF dives right into building an agency.Ā 

He comes up with a cool name for itā€¦

Creates a website for it (after all, heā€™s got a ā€œrealā€ business now!)ā€¦

And he starts hiring other freelancers either locallyā€¦

Or remotely through websites like Upwork.

Then, the next time he talks to a prospective clientā€¦

He explains that heā€™s the owner of a boutique agency that provides XYZ service(s) to clientsā€¦

His language is all about ā€œusā€ and ā€œweā€ā€¦

And heā€™s feeling really proud of himselfā€¦

Because now heā€™s leveled up big time in his life.

The End.

ā€¦

ā€¦

ā€¦

ā€¦

Yeah. F***ing. Right.

Hereā€™s what happens next:Ā 

It turns out that because JF has never actually built a team beforeā€¦

He quickly finds himself in over his head.

Suddenly, he goes from being the technician (or artist, if youā€™d prefer)ā€¦

To being the managerā€¦

And these are entirely different roles.

As Michael Gerber illustrates in his phenomenal book on this subject titled The E-Mythā€¦

The fatal assumption that most people makeā€¦

Is thinking that because they understand the technical work of their businessā€¦

They also understand how to run a business that does technical work.

Does that make sense?

In other wordsā€¦

Just because youā€™re a good copywriter, doesnā€™t mean you understand how to run a successful copywriting agency.

Just because youā€™re a good media buyer, doesnā€™t mean you understand how to run a successful media buying agency.

Just because youā€™re a good real estate agent, doesnā€™t mean you understand how to run a successful real estate agency.

Just because youā€™re a good lawyer/doctor/yoga instructor/roofer/plumber/electrician/personal trainer/whateverā€¦

Doesnā€™t mean that youā€™ll be successful at running a business that does any of those things.

This is vital to understand.

Yet, most people get it wrongā€¦

And that includes our friend JF.

Heā€™s never read The E-Mythā€¦

And thatā€™s unfortunate.

Because this is what the next year (at least) of JF's life looks like:

JF quickly finds that a lot of the people he hired arenā€™t nearly as good at the technical/creative work as he thought theyā€™d be.

As a result, he starts spending more and more time reviewing their work.

Or, worse still, he gets in the habit of just redoing their work entirelyā€¦

Because he thinks, ā€œitā€™ll just be faster and better if I do it myself.ā€

Worse stillā€¦

Because he went and signed on a bunch of new clients under the assumption that his new hires would be the ones doing the heavy liftingā€¦

Now JF isnā€™t just reworking one or two projectsā€¦

Thereā€™s a queue of ten or twenty projects that need his attentionā€¦

Projects that he feels like nobody can do perfectly but himā€¦

And this leads to a TON of work for poor JFā€¦

To the point where he begins noticing clumps of hair accumulating by the drain in his shower.

Seriouslyā€¦

If JF didnā€™t feel like he had enough hours in the day beforeā€¦

Now he REALLY doesnā€™t have any time.

And heā€™s more stressed than ever, unhappier than ever, and itā€™s taking a toll on his relationships and his health.

Plus, to make matters WORSE STILLā€¦

As JF spends more and more time revising other peopleā€™s workā€¦

He finds himself taking shortcuts or settling for ā€œgood enough.ā€

Deadlines start getting missed regularlyā€¦

His reputation starts to sufferā€¦

And before he knows itā€¦

The very agency he built to help him reach scaleā€¦

Is now having trouble getting new customers.

MAN! It doesnā€™t get much worse than that, right?

Well, actually it doesā€¦

Because soon, JF is dismayed to discover that heā€™s actually not making any more money than he was as a freelancer.

Why?

Overhead, for one thing.

Heā€™s hired several people to help fulfill the promises heā€™s made to clientsā€¦

And since most of them underdeliveredā€¦

Heā€™s been spending all of his time fixing or redoing their work, instead of prospecting for new business.

As a result, his agencyā€™s effective ā€œhourly rateā€ has actually dropped dramaticallyā€¦

Because a project that once took JF 10 hours soloā€¦

Now takes one of his ā€œhiresā€ 40 hoursā€¦

And then he still spends 5-10 hours revising or reviewing the hireā€™s work too.

So, to sum it upā€¦

JF is overworkedā€¦

Underpaidā€¦

And starts to resent his clientsā€¦

Even though none of this is their fault.

Itā€™s HIS fault that he canā€™t fulfill on his promises.

And at this point, one of three things happens:

1. JF tries to throw more money at the problem by hiring new/different technicians.Ā 

He thinks, ā€œwell, I got it wrong the first time with my hires, but now I know better.ā€

Every now and then this works out.

But more often than not, JF just repeats the same mistakes.

Because if he wasnā€™t good at hiring the first time, why would he become great at hiring the second time around?Ā 

Plus, a lot of JFā€™s issues have less to do with the people he hiresā€¦

And more to do with how he trains them (or, more appropriately, how he doesnā€™t train them).

Turns out, JF doesnā€™t actually know how to train his hiresā€¦

So instead, he just throws them into the fire and then feels burned when they underdeliver.

2. JF hires an Operations Manager

He thinksā€¦

ā€œOkay, well obviously Iā€™m not great at running a business. Silly me, that was my mistake. I just need someone who can manage hiring, training, and all of the other processes in my business. Thatā€™s the solution!ā€

And sometimes, it isā€¦

But a lot of the time, what really happens is that JF is trying to hire his replacementā€¦

And as soon as the Operations Manager is in place, JF abdicates responsibility entirely.

Well, following JFā€™s abdicationā€¦

Life is good for approximately 30 days.

But then suddenly he comes into the office, or checks in on the business via Slack while heā€™s out on the golf courseā€¦

And realizes that his Operations Manager is completely overwhelmed and has no idea what sheā€™s supposed to be doing.

Turns out, the Operations Manager has no idea how to hire or train technicians eitherā€¦

And the OM certainly doesnā€™t know much about business development.

So, to JFā€™s horrorā€¦

He comes back from his mental vacationā€¦

And finds that the Operations Manager has indeed built a machineā€¦

But most of the parts are either missing, or the wrong fit.

Kind of like if you were to build a sports car engine out of plastic and junk metal.

3. JF throws up his hands and goes back to being the technician/creator.Ā 

This is probably the most common scenario.

I know itā€™s what I did after my first agency.

The agency was profitable, but my God did I get burned out.

Why?

Pretty much all of the reasons I mentioned above.

I actually think most of the time, #3 is the right move for JF to makeā€¦

But thereā€™s a HUGE caveat hereā€¦

Which is that JF needs to learn how to charge way more money for his work.

Thatā€™s where he normally gets it wrong.

He goes back to technical work, but he keeps charging what he was beforeā€¦

And so yes, he feels more relaxed and less stressed for a whileā€¦

But before longā€¦

The same problems he had initially begin reemergingā€¦

And at this point, JF either gives up and gets a job.

Or, he continues to live a life of feast or famineā€¦

Where he always feels slightly unfulfilledā€¦

Because he knows he could have done so much more in his life.

ā€”

And that's why I generally hate the agency model.Ā 

Itā€™s not that nobody every builds a successful agencyā€¦

I know several guys who are running 7, 8, and 9 figure agencies right nowā€¦

But they are the exception to the rule.

Plus, most of the successful agency owners I know only achieved success on their third or fourth tryā€¦

And it happened after theyā€™d spent hundreds-of-thousandsā€¦

Or even millions of dollarsā€¦

Failing and screwing up.

So, if youā€™re a freelancer right nowā€¦

And youā€™ve been thinking about starting an agencyā€¦

Hopefully this helps you to think more deeply about that decision.

And if youā€™re an agency owner right now who feels stuck in their businessā€¦

Donā€™t fall into the trap of thinking you canā€™t get outā€¦

Because itā€™s never too late to pivot.

ā€”

Okay, thatā€™s it for now.

On my end, I'm about to start my dayā€¦

ā€“ SPG

P.S. Seriously, read The E-Myth if you havenā€™t already. I canā€™t recommend this book enough.

P.P.S. This post originally came from an email I sent to my private list. If you want to see more stuff like this from me, you can apply to join my list using this link.

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