Working as a freelancer is a great first step in shifting your career focus or developing new skills. As time goes on, however, you may need to abandon your freelancing goals in favor of forming an actual company; one complete with employees who can help out with some of the regular roles and responsibilities. After all, it’s impossible to grow your customer base and service offerings when you’re bogged down in the details of daily operations.
Here are five signs that you have outgrown your freelancing position and need to hire a team to support you moving forward.
1. Your Clients Are Feeling Neglected
As a new freelancer, you likely have just a handful of clients vying for your attention at any given time. As a result, you can devote a great deal of time and energy to fulfilling their needs. As you gain experience and clout as a freelancer, however, your customer base is likely to expand.
If you don’t have time to meet with your clients—or even return their phone calls—it may be wise to consider hiring additional employees to ease the burden. Not only can additional employees take on some of the tasks that have fallen by the wayside to maintain customer satisfaction, but their very presence can add a touch of professionalism to your business. They can also handle last-minute emergencies and requests.
In the long run, you may even be able to increase prices to help counterbalance the cost of hiring your new teammates.
2. You’re Turning Business Away
Although new freelancers are often willing to accept any assignment that comes their way, more seasoned workers will find themselves turning away business from time to time. While some of these contracts are undesirable for various reasons, others would simply take up time that the freelancer doesn’t have.
If you’ve been turning away clients or projects regularly for the last several months, it may be time to abandon your freelance gig in favor of starting a company of your own. By hiring your own team, you can stop saying no to opportunities and start growing a lucrative, booming business.
3. You See an Opportunity in the Market for Expansion
As a freelancer, you often have a unique window into the current state of the marketplace. Not only does this view allow you to anticipate changes and developments, but it also enables you to take advantage of emerging opportunities.
For example, a freelancer who focuses on SEO may see a prospect for expanding her services to include social media marketing. Hence, she may want to hire an employee who specializes in this area. If you see an opportunity in your market, hiring team members can help you take advantage of it before someone else beats you to the punch.
4. You Can Handle the Legal Requirements
Hiring new employees offers a number of benefits, including the chance to expand your product and service offerings without current clients and endeavors paying the price. Unfortunately, expanding your team has some drawbacks as well, not the least of which is dealing with additional legal responsibilities and requirements.
If you don’t have one already, you’ll need a Registered Payroll Number (RP). You also need to comply with provincial and local hiring laws as well as any applicable WCB regulations.
Additionally, employers must find ways of handling payroll, which includes making the proper tax withholdings. If you don’t understand these requirements, it’s important to do your research lest you get hit with hefty tax penalties in the coming months.
5. You Can Afford a Short-Term Drop in Profits
Ultimately, adding employees to your business should increase future profitability. It allows you to take on more projects and clients while freeing yourself up for larger growth initiatives.
Still, freelancers who are thinking of taking on employees need to prepare for a brief hit to their profit levels. Along with the added costs of the workers’ salaries, businesses may find themselves on the hook for benefits, payroll taxes, office space and other expenses. Before taking on new team members, make sure you can afford to lose a little money until business ratchets up to match the capacity of your new workforce.
While there are various signs that you have outgrown freelancing and should consider hiring your own team, one of the biggest indicators is the way in which you spend most of your workday. If you are focusing on day-to-day tasks rather than overall business strategy and customer acquisitions, it’s probably time to get some help. By delegating less crucial assignments to your team members, you can concentrate on starting a business that you can grow for years.