Does ROI Always Matter?

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When growing your business, should you worry about getting a positive ROI on every penny you spend?

It’s an interesting question for me while talking with today’s guest, Sarah.

Sarah started her own agency just 5 months ago. And while she’s been able to get hourly contractors on board quickly to help with creative work, she’s having difficulty finding the right people to help with administrative work.

Even more, she’s not sure how to pay for them. Because in a traditional agency model, everything has to be tied back to billable client hours. After talking through it, we came up with some good solutions.

PS: Sarah is looking to hire someone to help with client relations. Her contact info is below:

 

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Episode Transcript

This transcript was auto-generated and may have grammatical errors.

00:00.25
Preston Lee
Hello and welcome back to another episode of freelance to founder. My name is Preston Lee with millo.co and unfortunately my co-host Clay is not able to join us today but I am joined by my new friend Sarah calling from South Dakota Hake hey Sarah

00:15.46
Sarah Russell
Hey everyone.

00:19.31
Preston Lee
So nice to have you on the show. Thanks for calling in I Really appreciate it. Good great. Why don’t we start off. Ah you can tell me and tell the listeners a little bit about your business. What what kind of business are you in how long have you been doing it stuff like that.

00:21.12
Sarah Russell
Yeah, I’m excited to be here.

00:34.80
Sarah Russell
Yeah I’ve been in marketing. Ah for the past twelve plus years um, working at agencies agency roles and then most recently at an in-house marketing role and then towards the end of last year decided to um. Start off on my own and I launched alloyed a l o I d e ah and it’s a sort of an unconventional agency. Um that brings together independent contractors from all over the United States together to offer. Are clients a full service agency experience. But you know all the benefits of working with contractors so cheaper rates more flexibility. Ah easier to scale um, less red tape less overhead. Um, and yeah.

01:20.42
Preston Lee
I Love it.

01:23.55
Sarah Russell
That’s that’s what I’ve been doing I just started it in January so still fairly new and um, kind of learning as I go here.

01:31.61
Preston Lee
Yeah, a time of recording it’s may just so everyone listening can get a sense of how long you’ve been working on this Thing. So I Love I Love that business model. Um, we’ve talked to a few people who’ve been doing that around the world where where it’s It’s sort of like they take these contractors remote workers freelancers. Some might call them subcontractors and they basically build like this agency model where everyone’s Dispersed. No One’s on Payroll. Um, but to the client it feels like this robust agency that can offer all of these different services. So Really cool.

02:03.30
Sarah Russell
Yeah, it’s been exciting and um I think it’s just kind of the way you know the way the world is moving and just trying to take advantage of ah all the great people I’ve met over the last you know ten plus years so

02:15.77
Preston Lee
Yeah, so what was the catalyst for for the change like what I mean you I don’t think you said you got laid off you just left your job. Um, what? what was what was sort of why is what I’m asking. Why.

02:25.20
Sarah Russell
I did Yeah yeah, it’s a good question. Um, so I worked to edit in an in-house marketing department for a fairly large tech company I was the director of creative services there and managing. Our agency relationships our independent contractors and then our In-house Creative team and um, you know it just kind of came down to having this entrepreneurial spirit that I’ve had my entire life So knowing kind of I’ve always wanted to work towards. Um, being on my own and then also through that role just kind of play the agency in a way for all the work that we executed at that company so it was like well I’m already doing. This role Essentially I could just kind of take this on my own and and launch my own thing and and do it on my own. So um, yeah, it wasn’t laid off. It wasn’t really um, you know out of Necessity. It was really just a desire to ah. To start this and and embrace that entrepreneurial spirit like I said that I’ve always kind of yeah.

03:34.40
Preston Lee
I Love that I Love the bravery in that. Um you know so many people feel like they want that. But but just can’t take that leap and um and bravo to you for for doing that. Um, so okay, so let’s talk about. Ah. Your clients like what what kind of you do I think you said you do primarily marketing work at your agency. But with all the different freelancers you work with or subcontractors you work with like what kind of clients. Do you service What kind of work. Do you do for them.

04:05.90
Sarah Russell
Yeah, so we really are a if we were if you were to categorize the agency I’d say it would be a brand and creative agency. So we do a lot of brand work. So you know initial brand foundations and brand development as well as you know for? um.

04:10.87
Preston Lee
Oh okay.

04:21.64
Sarah Russell
You know more developed companies and brands doing integrated marketing campaigns Creative Concepts you know executing all the the various aspects of that from media to you know copywriting email digital marketing. Um, so we kind of do it. You know. Hate to say do it all. But we really have capabilities to do everything from video to photography you know like I said writing design. All of it.

04:51.53
Preston Lee
Wow! Fantastic! Yeah, and I’m looking at your website Some really great work here and um, how fun that you’re able to work with with people all over I mean I assume I guess I assume that are are people are the are the contractors you’re using are they mostly local. Do you like meet together or are they mostly remote and you just work.

05:08.54
Sarah Russell
Yeah, no, we are we are primarily remote I would say there’s only one I think if I off the top of my head just 1 partner who’s actually local to the area but the rest are all over the United States so we’ve got Idaho California Chicago Texas.

05:09.33
Preston Lee
Sort of over the internet.

05:18.27
Preston Lee
Yes, yeah.

05:28.20
Sarah Russell
Um, New York um so we’re kind of all over all over the board.

05:29.79
Preston Lee
Yeah, very cool I love it. Well, let’s talk a little bit but about where your business is headed then it sounds to me like it’s in a good place I mean you’re five months into this thing. Um, it sounds really exciting. Um I want to talk about where it’s headed though. So you you put that? um on this. On this survey that we have you fill out before you come on the call and if you’re listening and you’d like to jump on a call as well. Just like Sarah today. We’d love to have you usually I have clay here with me. Um, unfortunately he can’t be here today but usually clay and I co-host this show and we really just try to put out a great coaching call for anyone who wants to call in so Sarah signed up. Um, we were excited to have her and when you signed up Sarah you just filled out like a little I don’t know 4 or 5 question questionnaire we asked you a little bit more about your business. One of the questions on there um is on the scale of. Of 1 to 10 one being completely a freelancer 10 being what we’re calling a founder running a business that doesn’t rely just on you. Where would you put yourself and and you put that you’re currently at a 5 and that you’d like to be more at an 8 in the next year I’d love to hear what that kind of looks like like what what in your mind is ideal scenario a year from now for your business.

06:43.53
Sarah Russell
Yeah, um, so I think I put 5 because um, you know I’ve got a team of independent contractors that I work with. We’re pretty well established in our.

06:52.60
Preston Lee
So yeah.

06:56.62
Sarah Russell
Um, in our processes that we do and how we work together and getting things done and um, so that’s kind of where that gauge came from and then to be an 8 you know it kind of gets to the the question I have for you but understanding, you know, right now I’m primarily the one who’s. Bringing in all the business. You know having all the client calls I’m really acting as a creative director. But also you know doing the new business development and account service. You know what is traditionally like an account service role at a regular agency as well as project managing. So um.

07:31.30
Preston Lee
Ah.

07:35.99
Sarah Russell
Think in order to move the needle from 5 to 10 you know I don’t know if I even ever will be a 10 or with the model I have that that that would be the case but um, it would be interesting to kind of understand. Um how I can. How I can disperse some of that workload so that I’m still being able to you know do the creative direction work that I love to do that was like the reason I wanted to go start my own thing and and I’m not as able to do that now to kind of help you know, get the business started and grow.

08:00.67
Preston Lee
Yeah.

08:10.31
Sarah Russell
Our book of clients and things like that. So.

08:13.29
Preston Lee
Yeah, this is a really interesting problem and one that so many people face I’d say a lot of people that call us. It’s like um, they they start their own thing because they love doing the work the creative work or or just the day-to-day work and and then. When you start a business suddenly you realize like there’s all this other work that has to happen right? and um and someone’s got to do it and if it doesn’t happen then that creative work can’t happen at all and then obviously you don’t get paid either and so it it becomes this major sticking point of like can I do what I enjoy or am I stuck.

08:33.50
Sarah Russell
Um, or off.

08:47.84
Preston Lee
Doing all of this business work business development and and you might enjoy that a little bit but it sounds to me like your real passion is in the creative work and so I mean tell me if I’m wrong. What I’m sort of hearing is is you feel stuck in this thing of like well if I want the business to Grow. Um. I’m going to have to devote more time to the the business development side the the marketing the client meetings. All of that stuff and what I’d really like to spend more time doing is the creative direction in the creative work.

09:17.50
Sarah Russell
That’s exactly right? Yes, so right now I would say that 70% of my time for the last several months has just been meetings and coffees and lunches and emails and putting together osals and.

09:29.36
Preston Lee
Oh.

09:33.29
Sarah Russell
Um, you know 30% of that time is doing creative work and um, you know I kind of have felt like it’s um, sort of the mandatory you know hazing period of growing this and I’ve I’ve kind of just been getting through it and um, you know I enjoy.

09:44.76
Preston Lee
Yeah.

09:52.15
Sarah Russell
Parts of that as well. It’s not like I I don’t but um, it’s definitely not sustainable long term you know because obviously I’m not getting paid for any of that business development work. So um, that’s that’s part of it too. You know.

10:07.63
Preston Lee
Interesting. Yeah, Okay, so um, so what I’m hearing. Yeah so it sounds like what I’m hearing and what I’m sort of thinking about your situation is correct I Guess I guess my question is um. Tell tell me a little bit about the finances. We don’t have to talk specific numbers. Although if you if you’re open to that we can ah but in terms of revenue like how comfortable are you with um where where the money is now where does it need to be to to have this make sense I don’t know if.

10:26.73
Sarah Russell
Um, three.

10:38.49
Preston Lee
If maybe you’ve got a partner who’s also helping with the financial situation at home and this is sort of like ah you’re out on a limb and and not quite profitably yet I don’t know can I walk me through like what that what that looks like because I know this is super new. Um, but that doesn’t mean it. You know doesn’t mean it’s not.

10:49.15
Sarah Russell
Um, yeah.

10:53.59
Preston Lee
Making good money either I Just I guess I I don’t know where you’re at so walk me through that a little bit.

10:57.31
Sarah Russell
Yeah, for sure. Um, so when I started the business I definitely had been saving up for for that time to make the trip. Yeah so I was in a I think I was in a pretty healthy position to start I had.

11:05.30
Preston Lee
Awesome! Good for you.

11:13.65
Sarah Russell
And still have a decent you know nest egg that I can kind of dip into for you know if I want to invest in in equipment or invest in advertising or you know have cash flow where I’ve got to Cover. You know that kind of stuff is is there and I think I think I’ve actually made back. Um, if I if I go back into my books everything that I’ve invested thus far. So Hopefully the business is sitting in a good spot I think I’ve just been pretty um, pragmatic I Guess in the things that I’ve decided to invest in and.

11:36.24
Preston Lee
Nice.

11:51.56
Sarah Russell
Where I’ve put the money and when I keep a project to myself or like I’m like okay well I’m I’m full on hours. So I can pass this project off to a contractor or a partner. Um, so I’ve been pretty diligent with that. So. It’s not necessarily like there are financial concerns. It’s just um I guess I want to get to a point where you know I Guess the question is is is is the model I have going to always rely on me being the one. To bring in new business and new clients or is there you know opportunities to bring in a partner and I just don’t know what that would look like you know with the with the model because it’s like once you take on a full-time person. You start to become. More like a traditional agency you know and that that goes away from like the the founding principles of what we do and how we’re trying to be very different. Um, so that’s the that’s the piece. It’s like I don’t know if if um.

12:47.50
Preston Lee
Yeah, yeah, definitely.

12:58.43
Preston Lee
Ah.

13:04.59
Sarah Russell
You just take on an hour you know, ah do people do hourly account service work or I’m sure you can find hourly project managers is that something you know and how do you ensure that you’re still keeping a close tab on like the quality of work and you know all those different things because you’re putting your name on it.

13:22.15
Preston Lee
Yeah, yeah, no, this is this is all fantastic. This is making a lot of sense. Um, so let me let me ask you this question? Okay, so so it sounds like the real question is not like how do we scale up to get to profitability. It sounds like that it sounds like.

13:23.62
Sarah Russell
You know the alloy ran on it. So I’m kind of rambling I get this. But.

13:40.75
Preston Lee
Currently, it’s not a financial issue like maybe we would all like our business system be making a little more money but you’re not like in a really tight place that way it sounds like so that’s great because what that does is it gives you some flexibility now to to try different a few different things and see what works. Um, and so I applaud you first of all for having savings. That’s.

13:47.21
Sarah Russell
Yeah.

13:58.83
Preston Lee
That’s always my advice is to have you know I had like eighteen months a runway when I left when I actually got laid off from my job and took my business full-time I don’t know if you need that much necessarily listeners. But um, you know I think having having a little bit of a cushion there so you can get your feet under you and your business is always a good idea. So I’m glad that financial. That’s not an issue necessarily for you. Um, at at this moment. So let’s talk a little bit about this idea of like maybe hiring people to do more of the account work and more of the what you called your 70% work right now right? your your client interactions your proposal creation. All that stuff that you.

14:35.44
Preston Lee
Sounds like you’re good at and and you’re fine to do it. But it’s not what you’re passionate about um and and can you hire out for that. So let me ask you this question maybe to get the ball rolling. So when you started the agency. Um, why did you hire your first.

14:47.30
Sarah Russell
Ah, here.

14:52.77
Preston Lee
Freelancer or 2 to to be part of the group. What was the motivation behind that.

14:56.31
Sarah Russell
It was It was primarily to round out the core services that we provide so I wanted to go to market with um, all of the capabilities that you could you know leverage from a traditional agency. So.

15:16.15
Preston Lee
Maha.

15:16.52
Sarah Russell
I personally do creative direction brand strategy. You know the first couple partners I brought on one was a copywriter so it’s like I I worked with him in the past he’s out on his own I’m like hey do you want to team up and and be part of this. Um. Then I found a video person that I’ve worked with before and went to them and so it was just kind of going down the list of um, skill sets that I wanted to be able to bring to market so that I could market the agency and say you comem here and um so it wasn’t necessarily that I had like.

15:45.70
Preston Lee
Okay, yeah.

15:53.00
Sarah Russell
All the demand or the client work for them right? off of the bat but it was like hey here’s the vision here’s what I want to build? Do you want to be a part of it and then now that we’ve kind of rounded out the the crew so to speak and we’ve got all these different capabilities. Then like that was probably the first month or 2 of of just going and having conversations with these people and getting them on board and getting them up to speed and then the next couple months was just focusing on. Okay now how do we go find more clients and and start building that and promoting the agency that we’ve created. If that makes sense.

16:29.43
Preston Lee
Okay, cool. Yeah, that’s that’s perfect I Love that So let me ask you another question? Why? um, why didn’t you just? ah, do the copywriting and and the videography yourself.

16:45.23
Sarah Russell
Um, I think that I’m I’m fairly adept and skilled in those areas but by no means an expert in those areas and I don’t want to. You know when I when I envision the brand and the services that we bring I want to bring the best work. Um, and so I knew I needed partners that were experts in those areas to to be able to rely on them to do that Work. You know in partnership with. You know my creative direction and stuff and it’s very collaborative like the work we do is is very collaborative but I know what I’m at and I know what I’m not good at so um I don’t want to? um I want to deliver the best to the to the people that we serve.

17:19.41
Preston Lee
Yeah.

17:29.31
Preston Lee
I Love it. I Think that’s that’s perfect and it sounds like you’ve really got this figured out. So So now my next question and maybe you’re seeing where I’m going with this So now. My next question is why not just do the same thing with you know account. What? what? traditionally in the agency feel in the agency World. We might call an account manager or a client liaison or something um like why Not just.. Maybe you know people in your network or maybe that’s the reason why not? But what? what is it? That’s sort of holding you back from doing the same thing on the admin side that you did on the creative side because it sounds like you you did it right on the creative side you you knew people you you found good people. Um, you realized maybe. They were even better than you at some of this stuff and and so you could leverage their talent I mean what’s what’s different on the account side that I’m not seeing.

18:24.99
Sarah Russell
Yeah I think well that’s a great question and I think it could potentially just be my own lack of knowledge I guess or lack of um, knowing the options because. When in this world I’ve been on the side of marketing and creative and the production side right? So I know all the people to actually get the work done but it’s that other side of the business that I’m just not as familiar with roles like account service.

18:50.45
Preston Lee
Yeah.

18:55.31
Sarah Russell
Um, you know I know you can find freelance accountants and and things like that. But um I guess I don’t know of anyone that’s out there doing like freelance client management you know because it’s in in my mind and this could just like I said just be my own you know misconception. In my mind. Those roles are typically full time employee roles you know because they’re not going to want to come and be like hey I’ll I’ll do this for you by the hour. Um and not have you know not have like okay well here’s I think maybe once I have.

19:16.57
Preston Lee
I see Yeah okay well.

19:33.25
Sarah Russell
Like a book a solid book of clients or a a solid client base. Um, that could maybe be easier to attract. But I think most people in that role would want a salary Um, potentially like I said I don’t know for sure.

19:47.27
Preston Lee
Okay, yeah, yeah, I’m hearing a lot of things. so um so I think there is definitely It’s definitely not as easy right to find someone in a project management or or an account management or client management role. Um, you know I I hate to say it but but writers and and designers and. Videographers all the creative types and and myself being one so I feel like I can speak openly about this sometimes are kind of a dime a dozen’ like if sometimes our a commodity now not all are the same right? like you know you you can hire a really great one and you can hire a really terrible 1.

20:19.22
Sarah Russell
Yes.

20:21.61
Preston Lee
Um, but certainly it feels like in the world of freelancing and and service ah businesses that that those are just more prevalent just easier to find and more common and it’s like a proven model that lots of people do and so yeah, we start to branch out into these other things like account management or client management and it definitely feels less common.

20:38.10
Sarah Russell
But is a.

20:40.38
Preston Lee
But those do exist. Um, they definitely exist and and it’s just a matter of finding the right people. So for example, my team is made up completely of contractors. We don’t have any full-time employees besides myself and I have someone on my team who manages all of our.

20:51.85
Sarah Russell
Okay.

20:58.21
Preston Lee
Ah, sponsors which is basically like managing clients right? So they they do all the email interaction. They collect all the assets they run the campaign they report back on the campaign they do all of the back and forth. So I’m sort of part of the initial conversation and then I hand it off to him his name’s bilal and I hand it off to him and he does.

20:59.93
Sarah Russell
Yeah.

21:17.17
Preston Lee
All of the interaction over time and he kind of reports back to me and then reports to the client and is is a great sort of middle person. Um, he also helps develop new business. So like if we’re down on on sponsorships one month he’ll ah he’ll reach out to people who have maybe sponsored us before Or. Um, new people that might be a match and try to see if they’d like to be interested in trying us out and so those people definitely do exist. Um I Found bill all through my own network but I know you can find them through freelance marketplaces as Well. Um, looking for you know, searching Keywords like client management account management.

21:48.46
Sarah Russell
Yeah.

21:56.42
Preston Lee
Um, things like that. But my guess is having worked in the industry for so long I don’t know. Do you think you might know even if even if someone I don’t know even if someone isn’t it isn’t what am I trying to say even if this isn’t their first. Ah, their primary role usually like for example, Bill Al who I was just talking about. He’s primarily a marketer right by trade but he just like is so good at organization and project management. He kind of fell into this role in our team I’m wondering if if you think there might be someone in your network who maybe could fit the bill as well who might want.

22:21.66
Sarah Russell
Yeah, yeah.

22:27.10
Sarah Russell
Yeah.

22:34.25
Preston Lee
And extra ten or twenty hours a week of different kind of work from what they’re normally doing and you think they might be organized might be a good people person. You know there’s some of those traits that you could train them on your processes.

22:46.50
Sarah Russell
Yeah.

22:48.81
Preston Lee
But but they already have like the the core traits needed I don’t know if anyone comes to mind or if you think that’s a possibility.

22:52.63
Sarah Russell
Yeah, for sure. No, actually that’s really kind of exciting to think about that possibility and when you work with you know in my mind I guess I’ve I’ve been on sort of maybe this one way track where I’m thinking about contractors and bringing them On. And all the work that they do is entirely billable back to the client that’s working and it sounds like this role could be somewhat of a hybrid actually where part of their time might be an investment that I’m I’m paying their hourly rate. Um, as alloyed if they’re working on like business development. But if they’re managing you know a client project or something like that that time would be billable and and paid back by the client that they’re working with is that is that kind of how you work.

23:43.31
Preston Lee
Yeah, yeah, so um, so actually financially that’s not how I do it and I’ll explain in just a minute How how I do it I know that traditionally in an agency model. It’s always like where do we build this where do we build this right? It’s always trying to figure out like who’s gonna who’s gonna.

23:46.00
Sarah Russell
People too. Yeah.

24:01.61
Preston Lee
Pay the bill for this person or for this hour of work or whatever I I don’t I I don’t know how much you know you mentioned you’ve listened to a few episodes of the show Clay and I are are kind of big harpers on um, on hourly paying paying hourly and charging hourly like like.

24:04.81
Sarah Russell
Um I.

24:20.39
Preston Lee
I actually believe and I think Clay is with me on this one that um, hourly just really complicates things a lot. Um, and and that’s because I mean there’s lots of reasons and I don’t need to get into all of them today. But I think the one most pertinent to our conversation today is.

24:25.98
Sarah Russell
Roof.

24:38.50
Preston Lee
Like you’re saying it’s like well where do I build this to right? Where do I build this work to but imagine a scenario where everything instead was was fixed. So let’s say you and I don’t know if you know I don’t know how your agency is built or if it’s to the point where you could you could afford this or whatever. Um. The nice thing about hourly is like you don’t pay unless work is actually happening right? But if you get if you could get to a point where there was enough work happening in your agency and so imagine a scenario like this. Let’s say you get um, 4 clients just for easy math 4 clients at $2500 a month. Okay, and.

25:10.61
Sarah Russell
And.

25:14.50
Preston Lee
And I know sometimes like in branding it can be tough to get like a monthly client but let’s just I’m I’m sort of trying to take a high level here and not get too down in the weeds yet. So just imagine with me for a minute and see if this sparks any ideas for your particular business. So let’s say you can charge a client $2500 a month you can get 4 of those clients that’s $10000 a month. With that $10000 let’s say you can hire um, a designer again all contractors right? Same same as you’re doing now but you hire a designer for $2000 a month a videographer for $2000 a month and a project person for $2000 a month. that’s that’s $6000

25:52.16
Sarah Russell
A hole.

25:53.10
Preston Lee
Ah month. So Now you’ve got someone to interact with the clients you got someone to do the work. Um, and you’re helping with the creative process and sort of all the pieces running the business and you’re netting for yourself depending on what you pay yourself. Maybe you pay yourself another 2 out of that or or maybe you take before whatever it is. Um, and now you’re basically you’ve basically got predictable cash flow that you can say it doesn’t matter where we build this to. We’re just going to service our clients and we’re going to pay our contractors to do the work that’s needed when it’s needed. And and that’s a bit of ah a mindset shift from traditional agency work. Um, and certainly certainly I’m not saying that would work with every business but I’m wondering if that sparks any ideas for your particular model and and if there’s any opportunity to sort of make your revenue more predictable because I think when you can make it more. Your revenue more predictable then you can make your hiring process and your um employing freelancers process more predictable as well, right? and you don’t have to say well I can’t hire this person because there’s no client to to attribute their cost back to um, you just say like well I’ve got this big pool of.

27:03.29
Sarah Russell
Um.

27:06.69
Preston Lee
Revenue from all my clients and I’m going to take a portion of that because I know a business development or a client relationships person is really important I can take a portion of that and allocate it to that person I don’t know any any thoughts coming from all that. Okay.

27:18.84
Sarah Russell
Yeah I’ll be honest I have a really hard time kind of wrapping my mind around it. Um, and for it’s for 2 reasons one and and this is probably just it may be more of an excuse. But I think I have a harder time selling in and a monthly cost. To the clients that we’ve been working with you know? Um, so sometimes that can be a little bit of a harder sell versus like we do like project-based work. So it’s like we need a new website or we need to develop. Ah you know a logo and brand um foundations for this new company that we’re going to launch.

27:56.28
Preston Lee
Ah.

27:56.50
Sarah Russell
Kind of engage on that level because they they’re like they don’t know enough about marketing to know what they’re going to need next month or the month after to be like oh yeah I would spend x amount on that you know the other piece of it is like.

28:07.65
Preston Lee
Right? yeah.

28:13.39
Sarah Russell
The example where we’re working with a client and this is kind of what gets us back to doing the hourly stuff and I’m I’m not I’m not pro hourly at by any means I think like in ah in a lot of ways when you have a team who’s really good at what they do and you charge hourly. You end up. Underselling because you get when you’re when you’re good at something you’re faster at it right? So um, you’re not you kind of start. Um you know, um, disservicing yourself when you just charge So I’m I’m definitely not pro Hourly. But.

28:34.84
Preston Lee
Right? yep.

28:42.90
Preston Lee
Absolutely yep.

28:47.86
Sarah Russell
What happens is like a client will say okay, let’s say I need a logo design and I’m just throw out some numbers like okay, we’ll we’ll create this logo for you. You get 2 revisions. Um, it’s $5000 um, but ultimately you kind of have to know. Um. At what point do you start? What? at what point does the scope creep right? because the client could always come back and be like I don’t like those 2 options. So do you charge like okay for additional revisions. It’s another It’s x amount hourly that we work on. You know it’s just like. Um, it kind of helps protect the scope of the project so that they can’t keep going round and round because it’s like if it’s a deliverable and you value base it like we’ll deliver you a logo designed for $5000 and you go round and round and round in revisions. You spend 50 hours on it. You know and all of a sudden. You’re not making any money because you’re making $10 you know what? I mean like.

29:48.52
Preston Lee
Right? Yeah, yeah, yeah, yeah completely I think I think that’s why there’s a huge ah um, community around the idea of productizing your service and if you don’t want to go so far as to productize your service meaning like.

29:59.75
Sarah Russell
Um, the whole.

30:04.82
Preston Lee
We charge $5000 for a logo take it or leave. It is kind of is kind of the productized model. Um I think though there there could be like a hybrid or a middle ground between what you’re explaining the traditional agency model and this productized model and that is like. Let’s say you know a client calls up. They want a logo you say it’s going to be $5000, we’re going to deliver 2 options to you? Um, then I mean that seems pretty cut and dry to me. So so you know you bring back to let’s say they don’t like it any so to to sort of mimic. Your.

30:29.97
Sarah Russell
So.

30:38.92
Preston Lee
Scenario like we don’t like either of these and you say okay we understand ah these 2 concepts is what you paid for? Um, if you want more concepts here’s how much it’s going to be and I know that those are hard conversations to have but I think if you upfront.

30:39.31
Sarah Russell
Yeah, yeah.

30:51.42
Sarah Russell
Hoped.

30:56.46
Preston Lee
Answer all those questions and say well. What if I don’t like it well then we’re going to have to tack on some extra. We’re going to have to revisit the scope you know it may not be an additional 5000 to get 2 more because we’ve already done sort of this this front-end work of researching the brand and ideating some things and. Probably have some things in the wings that we ended up not using that we could pull out and so maybe it’s another you know two Thousand or twenty five hundred or something again, just sort of making up numbers. But um, you know I think I think there’s maybe ways around that. but but I wonder if.

31:22.48
Sarah Russell
Um, yeah.

31:28.57
Preston Lee
I wonder if maybe so if this if this idea of like recurring revenue doesn’t work for your business model which I understand Clay and I we always push this on people is this recurring model and I completely can appreciate that there’s that not all business models have a recurring element to them. They just can’t um. So if you have clients that are calling you up and they need a logo They’re not going to need that every month. So so I can appreciate that. So I wonder though if there’s if there’s ways you can look more closely at the money side of things and still do something similar where it’s like we are. We’re going to set a target again back to my original math. We’re going to set a target for. $10000 in a month and whether that comes from 1 client or whether that comes from 10 clients or a hundred clients. You know our target is to make $10000 to bring in $10000 in client revenue this month when you have those targets then you can budget out for a person. That we’re talking about here. Um that that you can then hire for client acquisition client management and it is tough because they don’t always directly translate back to an exact client that you can that you can do billable. You know you can assign those those billable hours to that client. But.

32:39.84
Sarah Russell
Um, yeah.

32:42.94
Preston Lee
But just because you can’t doesn’t mean you know that that person shouldn’t be a part of your team.

32:48.82
Sarah Russell
Right? Yeah for sure. Yeah I think it’s part of just like making the mental leap to you know I’ve been so cautious with what I’ve invested in to try to you know maintain. Um.

32:57.12
Preston Lee
Oh.

33:02.76
Sarah Russell
Really good financial numbers and and minimize risk and in a way I kind of feel like I’ve reached sort of ah a critical mass in terms of like what I can do and if I were to ah you know it’s like I Invest 10 I’m getting back 20 Well if I invest. 30 and bring someone else on and and pay for that like does that get me to 50 You know, um, you know what? I mean.

33:25.74
Preston Lee
Yeah, yeah I mean those those kind of risks That’s that is what’s challenging and it sounds like you and I are maybe similar I’m I’m fairly risk averse I’ve probably missed on opportunities in my business because of my aversion to risk.

33:41.95
Sarah Russell
You know.

33:44.39
Preston Lee
Um, not probably I for sure have um but I have a great runway right? I have a like if my business were at a tank we could figure it out because we have plenty of time to to completely change up the business model and that has also helped me over the last however, many years six years I’ve been doing this full time. So.

34:04.39
Preston Lee
Um, you know it’s risk is tough. We all have different risk tolerance to me. It sounds like you’re in a good financial place where you could test this with someone part-time and slowly um you know coming back to like if there was someone who maybe came to mind who might just be a good trustworthy.

34:14.35
Sarah Russell
Yeah.

34:23.90
Preston Lee
Person that could test this out a little bit. Um and there may not be a direct roi right? You kind of you almost as an entrepreneur as a business owner you almost have to also do like a gut check and just say like is it worth having this person on the team. Even though I can’t attribute them directly to to billable hours. Um.

34:41.28
Sarah Russell
Yeah, for sure.

34:43.77
Preston Lee
And you know and sometimes you have to just rely on on your gut for that I don’t know any thoughts.

34:47.17
Sarah Russell
Yeah, no I think it makes sense I think for this to go. You know if you think about I Guess how I just to be candid like how I feel right now is that I’m kind of just keeping my head above water in terms of being able to. Go out and seek those new opportunities to bring in new clients that will you know grow the agency um and and push us towards the vision that I have versus keeping up with the work that I’m trying to do too. You know on the creative director side and it’s like this constant.

35:21.12
Preston Lee
Now.

35:25.41
Sarah Russell
Um, you know Tug of war battle right? and I think ultimately I’ve got to let go of some of that control and bring someone in who can focus on that entirely. You know I’m like when you try to do everything you do nothing well kind of and so it’s like.

35:40.23
Preston Lee
Yeah, yeah, yep.

35:44.76
Sarah Russell
I Think in order for me to really take this to the next step and really push it towards where I ultimately want to see the agency go um I’m going to need someone to step in and help with some of that outside you know, business development and client work and and then I can focus more on you know. Creative work and the things that we’re doing for the clients too which is what I’m good at you know so that makes sense.

36:05.47
Preston Lee
Aha.

36:12.92
Preston Lee
Yeah I think it makes a ton of sense and it it is challenging right? Um, to me that seems like the best path and of course I’m not as familiar with your business as you are, but. Yeah, to me that seems like the the best way is to like and even you don’t have to hire someone full time. They don’t have to be you know $80000 a year like it doesn’t have to be this huge investment just like you did with your contractors your your creatives I should say like you can go find someone who might just need. Some side revenue. Maybe they do this full time for for something similar obviously like if they’re doing it for an agency that would be a problem but you know maybe they’re doing client relationships in a completely different industry and um and they just seem like a good trustworthy hardworking person like that would be the kind of person I would maybe look for at this stage is just like.

36:46.92
Sarah Russell
Yeah, right.

37:00.71
Preston Lee
Just to test the the whole process. Um, yeah.

37:03.17
Sarah Russell
Yeah, know, Honestly, that’s like really exciting to think about that I’m like almost giddy about like oh my God I could spend doing design I love that and being on a you know client calls all day long. Which yeah.

37:16.74
Preston Lee
Ah, yeah.

37:19.48
Preston Lee
Yeah, yeah.

37:22.80
Sarah Russell
And me wrong I Love our clients of course. But it’s just like I like you said it’s you know this when you when you branch out and you want to like do your you know, follow your passion and follow the things that you are um, really good at and really passionate about and then you start a business and you’re like oh like paperwork.

37:41.64
Preston Lee
Ah, right, admin work I have to yeah I have to do all this stuff. The thing is though I think what we sometimes forget is there are people in this world who are passionate about that. There are people in this world who who would hate to do the creative work but who like wake up in the morning. Just excited to go.

37:42.50
Sarah Russell
With what. Um, yeah, yeah, yeah, yeah, yeah.

37:59.64
Preston Lee
Go talk with a client or meet with a client or organize the report for the client or or figure out you know which hours go where like all that stuff that you hate or or not hate but that you’d rather be doing creative work right? Someone’s really excited about doing that work and and it is harder to find those people most definitely. But I I think they do exist.

38:07.51
Sarah Russell
Yeah, yep, yeah yeah.

38:18.21
Preston Lee
And certainly where you’ve had maybe ah ah I think you said 12 years or something in in in agency life like maybe you can even think of someone who has moved on to non-agency work or who yeah could somehow fit the bill as a trial. Think too if it’s okay with you I I want to riff on just a couple other quick ideas. Um, if that doesn’t work out or or if you need other ideas in the interim. Um I think there could be opportunities depending on who your contractors are you could sort of enlist their help.

38:50.44
Sarah Russell
Are.

38:51.83
Preston Lee
On finding new clients. You would still have to do a lot of the client management but in terms of like new business development. You could say like any freelancer on our team any contractor on our team who brings a new client to the larger group. Um, they get a certain percentage maybe or they or whatever that could be really interesting.

38:57.76
Sarah Russell
Um, yeah.

39:06.68
Sarah Russell
Um, yes.

39:10.66
Preston Lee
So It’s like if I’m if I’m the copywriter and then I find out that one of my copywriting clients needs video work. You say actually I’m I’m a part of this agency that offers even more services I’d love to connect you. We have a videographer. He does great work or or whatever. Um, I think that could be really interesting in terms of generating new business. Ah um I think Also you know sales people are so hard to find but in terms of generating new Business. You could also find someone who might work on commission I think that I have tried that so many times and it is very very very difficult I’ve never been successful with it.

39:27.98
Sarah Russell
For sure. Yeah.

39:45.82
Sarah Russell
Um, oral.

39:46.25
Preston Lee
But I have this dream that someone might be able to do it one day where they start a business the size of our businesses and and they hire a commission salesperson who it’s like every new client that you bring in. We’re going to give you a commission of of the work that we do for them and then.

39:57.85
Sarah Russell
Oh interest. Yeah.

40:01.56
Preston Lee
Yeah, and then the last idea that I have I’m not super familiar with this but it could be worth researching yourself and seeing if this would be a fit but I know upwork has an agency model where you can actually have all of your freelancers sign up on upwork and then you can create. They call it an agency and it’s basically like you become the head of the agency on upwork and then um, you can automatically or manually bid for jobs as an agency so you would say like um hey I’m Sarah I run alloy we’ve got freelancers of all kinds working within this agency. Um, so that could be an interesting way to generate some new business if you’re if you’re open to working on. You know, marketplaces like that I know some people are some people aren’t but they could be an option so. There’s maybe just some some rapid fire options I don’t know if that opens any more questions or brings any more thoughts to mind on your side.

40:45.97
Sarah Russell
1

40:55.91
Sarah Russell
Yeah, no I mean I’ve I’ve definitely familiar with upwork. But um I didn’t know about that agency capability. So that’s that’s interesting I could check that out for sure.

41:05.71
Preston Lee
Yeah, and I wish I knew a little more about that. You’ll have to you’ll have to dig into that and and find some information about it. But as ah as a client who’s hired on that work before I know there’s been people who reach out and they say I’m actually an agent’s and upwork agency and we have. You know? So so many client or so many freelancers on staff quote unquote on staff and and so yeah, that could be a really really? ah, good opportunity for generating some some new business too. I don’t know.

41:29.70
Sarah Russell
Yeah, for sure for sure I know it’s It’s hard to be competitive on upwork with the pricing. But yeah, it’s definitely something to look at for sure. So.

41:36.27
Preston Lee
Definitely definitely yeah particularly in design and and more creative work I know some people who are really successful in Upwork but they do really niche like data work and spreadsheets and stuff that maybe fewer people. Try their hand out So but maybe worth a shot I don’t know maybe worth at least learning a little bit more about.

41:55.24
Sarah Russell
Yeah, for sure. Yeah, definitely definitely. Yeah, we’ve done. We do have the referral ah option with the partners. It’s been a little bit harder to kind of.

42:11.93
Sarah Russell
Um, I guess I haven’t seen any results from that yet. But it’s still you know and still early and hopefully that will you know help. But um, it’s definitely.

42:16.53
Preston Lee
Yeah. Yeah, and well I’m glad to hear you have that in in that it exists I Wonder if you could offer some training or some marketing material or something like. Here are some trigger phrases your client might say that might be a good opportunity to say actually we offer these services too. You know like I mean there’s the obvious there’s the obvious stuff like hey do you know a videographer like that’s really easy.

42:43.14
Sarah Russell
Yeah, for sure. Well.

42:50.41
Preston Lee
But but then there’s like maybe some other phrases that you could train them to pick up on or I don’t know it’s tough when they’re not like your full-time employees offering training or whatever. But but you could maybe find a way to do that and and that could be interesting to sort of really focus on that as ah as a client intake method.

42:52.85
Sarah Russell
Um, yeah.

42:57.90
Sarah Russell
Um, right.

43:06.11
Sarah Russell
Yeah, or even like sending them. Ah maybe ah, a script or a template email that they could send out their client like hey you can just copy and paste this to your clients if you you know and that kind of tells them that they’re a part of alloyed and here’s here’s what else.

43:09.51
Preston Lee
Yeah.

43:21.49
Sarah Russell
They have to offer and see what happens there. That’s that’s an that’d be an interesting way to go to.

43:24.62
Preston Lee
Yeah, yeah I love that or if they’d be open to it like having having a tiny little link in their email signature that says I also work with alloid if you need other services like um, you know.

43:36.72
Sarah Russell
Yeah, for sure.

43:39.84
Preston Lee
Everyone would have to balance how much they want to expose themselves as as also working for an agency but where it’s a sort of different model I don’t know they might be open to it and and a lot of times in my experience contractors are open to anything that will that will get them more business and more revenue. So um.

43:55.17
Sarah Russell
Yeah, for sure. That’s a good That’s a good thought I think there’s probably a lot of untapped opportunity there yet. So.

43:58.58
Preston Lee
Yeah.

44:02.64
Preston Lee
Yeah, and the more the more you sort of make your agency feel like this cool community that they’re a part of and this exclusive group the more they’ll they’ll feel like it’s It’s part of them like our so our team is all contractors like I mentioned but we are a team like we act like a team you Know. We Um, we make plans together. We set goals together like we function. As like if you walked in I mean we don’t all meet in the same room. We’re all over the world just like yours. But if we were all in the same room and you walked in, you’d think that we we were just you know a traditional.

44:38.00
Preston Lee
W 2 employees all in a room working together. That’s that’s just how we work. It’s just that legally on paper. They’re contractors and so if you can sort of build this community this camaraderie and and this thing where it feels like everyone’s looking out for everyone else like that can become really really special. So.

44:43.10
Sarah Russell
What.

44:51.24
Sarah Russell
Do you have like the top 3 quick hit things that you did to kind of help bring that to life because that’s definitely something that’s part of the vision that I have for alloyed. It’s just how do you make that happen. You know or kind of like.

45:06.15
Preston Lee
Yeah.

45:10.54
Sarah Russell
You know, maybe a little more cautious about giving their time to it and it’s new and um, what is how does that look for you when you were kind of getting this started.

45:18.69
Preston Lee
Yeah, great. Great question I’m so glad you asked? Um I think a couple things I did is ah so I I give these are these these are little things but but over time or. They sort of add up or once you know altogether they sort of add up to feeling like oh I’m a part of this team. So I Give everyone an email address at our domain. Um, so that they can communicate with clients and sponsors and customers all from the.

45:40.16
Sarah Russell
E stop.

45:50.20
Preston Lee
Company email address right? and when you have an email address for a company now. It’s like oh I’m part of this thing. Um, so we we do that we I gave everyone a title so they’re not just like Adam the freelancer on the team. It’s like Adam is our digital product manager right? and um, and. He doesn’t manage any people his particular role but he manages all the processes around our digital products and so so I gave them titles. So I think that that is helpful because it’s kind of like you know I’m this is my role on the team. Um I put I i.

46:22.91
Sarah Russell
Oh yeah.

46:26.83
Preston Lee
Put everyone in the same slack channel so we have a company slack channel and asked everyone to to join that and most of our work happens there and then on clickup which is our project management software and I added them there as well. So I really just I did a lot of things that felt like very traditional office work like as if I were hiring them as full-time employees. Ah you know you wouldn’t often give a freelancer working for you an email address and it sounds like a little thing but it but it really really makes it feel like they’re part of the team. So and then and then. Those are maybe the the beginning things. But I think what really um drives at home is just the the culture the way you talk together like um, the amount of trust I show my team right? They’ll ask me questions and I’ll say here’s here’s kind of what I think but I trust you go ahead, make it you know move forward make a decision and um. And so not micromanaging them things like that make them feel like they’re a valued member of a team instead of ah, an asset that we pay hourly. Oh that was the other thing is I pay them all a fixed rate. Um so it feels a little bit more like a job and like I’m also committed right? I. I pay them a monthly fixed rate and I and I in some cases I’ve had like a deal where it’s like we’re going to try this for twelve months but in most cases I just say I’d like to pay you this much a month um and and you can decide how many hours that needs to make sense in your mind here’s the work that I think needs to get done.

47:56.70
Preston Lee
But because they’re on like a recurring monthly fixed basis. They again it it feels more like a like a job like or like a responsibility like I’m on this team and I have to perform month over month. So those are a few things I don’t know if that sparks any ideas on your end but that’s kind of those are a few things I’ve done on my team.

48:10.12
Sarah Russell
Yeah I Love that I Love slack. We are. We’re all on slack. But I think I haven’t taken it to that next level where I’ve actually you know given them a company email address and things like that and I definitely think that could be a cool way to. Bring them in a little closer you know and make them feel a little more like they’re part of something. So.

48:33.15
Preston Lee
Yeah, um, sorry more ideas that are coming to mind but like an about page on your website where they all have their photos and you know link to their link to their personal freelancing site or whatever you know they Love. They’ll love that kind of thing and this isn’t I don’t mean to say this thing these. Things as like ways to manipulate people into thinking they’re part of a team. This is just like you know you think about what what you would want if you were on someone’s team you know and and having an about page like we have an about page that has all the members of our team. A nice photo. A nice bio. A nice link to their own stuff and and um.

48:55.65
Sarah Russell
Yeah, yeah.

49:08.25
Preston Lee
Yeah, there’s just ways of like saying like yes, you’re on the team. You know so.

49:10.17
Sarah Russell
For sure. Yeah, no I mean I definitely I agree. It’s not. It’s not to manipulate it’s to create like a community um of people that you know hopefully like to work together. So yeah, yeah.

49:18.22
Preston Lee
Yeah. Yeah, exactly exactly? yeah, well good I think we’re coming up on the end of our time here. Are there any other questions I can answer for you or or any other thoughts that you might have.

49:28.77
Sarah Russell
Awesome.

49:35.86
Sarah Russell
Um, no I don’t think so this has been really helpful and I think a good mindset shift for me. Um, in terms of the type of support I bring on not always needing to be ah you know, tied back to Roi. There can be um, there can be. Support that I bring on that’s ah you know an investment into the company. So. That’s that’s a good shift for me. Um, and I think kind of the aha moment I’m taking away from this.

50:02.93
Preston Lee
I love it I think I think that’s a perfect way to think of it. You know there’s always going to be that directly attributable roi and then there’s just going to be sort of gut Roi where it’s just like no, it’s worth having this person even though I can’t on paper trace every penny back to the work that they’re doing and so good.

50:13.17
Sarah Russell
Um, now.

50:19.00
Sarah Russell
Yeah, yeah, like.

50:22.52
Preston Lee
Well why don’t you ah you know what I would love and we should have brought this up earlier in the show I would love it if someone was listening and they’re like oh I would be the perfect client relationships project manager person for Sarah so why don’t you why don’t you um, remind everyone where they can find you how they can contact you maybe the perfect person you need to hire is listening right now.

50:33.24
Sarah Russell
Um, yeah.

50:40.55
Preston Lee
And that would be just amazing If we could make that connection for you but in any in any case will you just remind people how to get in touch with you.

50:47.15
Sarah Russell
Yeah, no, that would be that would be really awesome. Um, so if you’re listening ah come on over to alloy a l o I d e dot com and you can get in touch with us there or you can email me at SarahSARAH.

51:04.36
Sarah Russell
Russell r u s s e l l at alloy.com um would love to you know, make some new connections and see what what people are out there that maybe I I don’t know about yet.

51:16.69
Preston Lee
I love it. Sarah thank you so much for taking the time to jump on a call today. It’s been a lot of fun. Absolutely take care.

51:21.27
Sarah Russell
Yeah, awesome. Thanks for having me appreciate it. Yep Bye bye.

 

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Written by Preston Lee

Editor at Millo.co

Preston Lee is the founder of Millo where he and his team have been helping freelancers thrive for over a decade. His advice has been featured by Entrepreneur, Inc, Forbes, Adobe, and many more.

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Reviewed & edited by Mateo Melgar, Editor at Millo.

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