Can you subcontract your way to a profitable freelance living?

There are much larger players in your field who need your help, so how can you ensure you're profiting from subcontracting?

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Here’s a common misconception; by subcontracting you limit your earning potential as your price is limited by what the client can pay at the top of the chain, with your rate the one that’s squeezed to accommodate.

What if I told you that I (both as a freelancer and from growing into 14 employee web agency Tone) am often able to bill more for my work as a subcontractor as I could as a direct supplier to the client.

Side note: When you’re a subcontractor the business side of freelancing is even more important. Here are the six traits you need to sharpen up to make that happen.

A client is a client

A crucial differentiation you need to make (and a realism you should get comfortable with) is that a client is a client.  You do the work.  You get paid.  Does it matter if they pass that work on?

The economics are the same:

  1. Receive a brief or instruction and have a good process for onboarding
  2. Agree a cost (for the project ideally – ideally not an hourly rate) and deliver a proposal
  3. Deliver on time and overdeliver where you can
  4. Enjoy the journey and open yourself up for more work or referrals

Another way to look at subcontracting is that you deliver your work into a management team (the subcontracting party), who pass that onto the real decision makers (the client).   If you were dealing with a large business who had a similar sort of structure it would be no different.

So it’s your job (and your job only) to ensure the client enjoys the experience, is delighted with the output and wants to work with you again.  Those points remain whether direct or subcontracting.

You still need to be selective

Here’s a sure fire way to fail; targeting other freelancers or very small agencies who are fighting the same battles you are.  Rather than work you’ll get platitudes, “I’ll let you know-s” and an expectation to return the favour if something does work out.

Who is the next tier up from you?

There is always somebody bigger and doing more, always somebody who was in your position 5 years ago and chances are they need help with overflow from time to time.

At Tone our largest subcontracted agreement is fast approaching $400,000 (around £280,000 to date) which is only possible the subcontracting design agency is much larger than we are (14 employees vs thousands).

Using it as a platform we’ve been able to replicate this model with 4 or 5 other large-scale agencies with similar results.  Key takeaways:

  1. You still need to qualify and narrow your audience.  It’s even more crucial when finding subcontracting partners to narrow the pool.
  2. You’ll O-N-L-Y get repeat work by delivering well; subcontractor clients need a partner not a laborer.
  3. Your justification on price needs to be extra sharp, so that your partner can pass on this argument to their client and win the deal for you by proxy.
  4. It’s down to you to build long-term, mutually beneficial relationships with these clients.

Keep them coming back

Do you manage projects well with the long-term partnership in mind or are you glad to see the back of clients once they’re complete? How much long-term client focus do you have?

It’s possible to build enough goodwill, enough recurring client revenue that you never have to find another client again. How much emphasis are you putting on improving that skill?  This is crucial for the business side of freelancing. 

Side benefits

Let me know in the comments if you’d like to see me talk more about subcontracting.

What I’ll leave you with is the point that you never know where the relationship might lead; the same agency passed a client directly to us who will be spend upwards of $25,000 this month.

Now tell me you can’t profitably work as a subcontractor :)

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  • Michael Merritt

    Always learn things when I read through your blogs, and this one did not disappoint. Would love o hear your thoughts on subcontracting as a way to improve skills or develop new ones.

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