Joe Freelancer (JF) has spent the last few years as a service provider for his clients.šØāš»
It was a struggle at first, but over time heās become increasingly competent and confident in his skills.
His clients are happy and getting good resultsā¦ š
And heās even getting lots of referrals.
JF is making more money than at any point before in his career.
So, youād think life would be goodā¦
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 wifeās birthday, or during a vacation in Mexicoā¦
A time where he āshouldā be enjoying himself
But where, insteadā¦
Or, heās actually working nonstopā¦
Even though itās the last thing in the world he wants to be doing.
Itās wildly frustratingā¦š±
JF had told himself that this vacation/birthday/whatever was going to be differentā¦
That heād be able to truly enjoy the momentā¦
But instead, there he is, plugging awayā¦
So he says to himself, āsomethingās gotta changeāā¦
And thatās when it hits him.
JF has what seems to be a revelation:
āWhy am I the one doing all of this work anyways?ā JF asks himself.
āWhat 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 Iām tired of doing).ā
And once he has this glorious āinsightāā¦
Thereās this moment of elation.
JF has figured it out!Ā
And he almost canāt help but laugh at himselfā¦
Because itās so obvious now, why didnāt 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, heās got a ārealā business now!)ā¦
And he starts hiring other freelancers either locallyā¦
Then, the next time he talks to a prospective clientā¦
He explains that heās the owner of a boutique agency that provides XYZ service(s) to clientsā¦
His language is all about āusā and āweāā¦
And heās feeling really proud of himselfā¦
Because now heās leveled up big time in his life.
The End.
ā¦
ā¦
ā¦
ā¦
Yeah. F***ing. Right.
Hereās what happens next:Ā
He quickly finds himself in over his head.
Suddenly, he goes from being the technician (or artist, if youād 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 youāre a good copywriter, doesnāt mean you understand how to run a successful copywriting agency.
Just because youāre a good media buyer, doesnāt mean you understand how to run a successful media buying agency.
Just because youāre a good real estate agent, doesnāt mean you understand how to run a successful real estate agency.
Just because youāre a good lawyer/doctor/yoga instructor/roofer/plumber/electrician/personal trainer/whateverā¦
Doesnāt mean that youāll 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.
Heās never read The E-Mythā¦
And thatās 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 arenāt nearly as good at the technical/creative work as he thought theyād 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, āitāll 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 isnāt just reworking one or two projectsā¦
Thereās 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 didnāt feel like he had enough hours in the day beforeā¦
Now he REALLY doesnāt have any time.
And heās more stressed than ever, unhappier than ever, and itās taking a toll on his relationships and his health.
Plus, to make matters WORSE STILLā¦
As JF spends more and more time revising other peopleās workā¦
He finds himself taking shortcuts or settling for āgood enough.ā
Deadlines start getting missed regularlyā¦
His reputation starts to sufferā¦
And before he knows itā¦
Is now having trouble getting new customers.
MAN! It doesnāt get much worse than that, right?
Well, actually it doesā¦
Because soon, JF is dismayed to discover that heās actually not making any more money than he was as a freelancer.
Why?
Overhead, for one thing.
Heās hired several people to help fulfill the promises heās made to clientsā¦
And since most of them underdeliveredā¦
Heās been spending all of his time fixing or redoing their work, instead of prospecting for new business.
As a result, his agencyās effective āhourly rateā has actually dropped dramaticallyā¦
Because a project that once took JF 10 hours soloā¦
Now takes one of his āhiresā 40 hoursā¦
And then he still spends 5-10 hours revising or reviewing the hireās 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.
Itās HIS fault that he canāt 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, āwell, 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 wasnāt good at hiring the first time, why would he become great at hiring the second time around?Ā
And more to do with how he trains them (or, more appropriately, how he doesnāt train them).
Turns out, JF doesnāt 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¦
āOkay, well obviously Iām 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. Thatās 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¦
Well, following JFās 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 heās out on the golf courseā¦
And realizes that his Operations Manager is completely overwhelmed and has no idea what sheās supposed to be doing.
Turns out, the Operations Manager has no idea how to hire or train technicians eitherā¦
And the OM certainly doesnāt know much about business development.
So, to JFās 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.
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 thereās a HUGE caveat hereā¦
Which is that JF needs to learn how to charge way more money for his work.
Thatās 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
Itās 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 theyād spent hundreds-of-thousandsā¦
Or even millions of dollarsā¦
Failing and screwing up.
And youāve been thinking about starting an agencyā¦
Hopefully this helps you to think more deeply about that decision.
And if youāre an agency owner right now who feels stuck in their businessā¦
Donāt fall into the trap of thinking you canāt get outā¦
Because itās never too late to pivot.
ā
Okay, thatās it for now.
On my end, I'm about to start my dayā¦
ā SPG
P.S. Seriously, read The E-Myth if you havenāt already. I canāt 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.