Before we begin, I want to clarify what I mean by “business model.” I’m referring to the basic structure of how your freelancing business operates, not the full-fledged business model that includes your target market, fixed cost, etc. etc.. If that’s what you’re looking for, check out this helpful page. Right now we’re just talking about whether you work alone, outsource work, and basically how you operate on a day-to-day basis.

That said, some of you freelancers do everything yourself, including sales, design, and coding. Others do just design and outsource the coding, or vice versa. Some of you probably operate as more of a manager, outsourcing everything and managing a team of other freelancers. Let’s talk about the pros and cons of each model. Feel free to comment on any tips or business models you use that might be useful to the rest of us.

1. The Lone Ranger

This freelancer is a Jack of all trades. He makes sales calls, strategizes, creates proposals, concepts, designs, codes, and delivers. If you can do this, more power to you. My passion is design. I code when I need to, but I’d rather pay someone else to do it and focus on what I love.

Pros

• You’re the boss! You make all the decisions.
• You have more control over the final product.
• You get to keep all payment (minus taxes).

Cons

• With so many skills to learn and maintain, it may be difficult to become an expert in every field.
• You will probably spend more time researching to keep up in every skill as technology develops.
• Some aspects of your work may suffer when in a time crunch, since you are doing everything.

2. The Partner

Some freelancers choose to partner with someone who complements their skills. For example, a designer may work with a developer under one business name. Sometimes partnerships lead to conflict: The partners may have different opinions about the way to do things, and no one is “the boss” who can make the final decision. This means that both partners must have the attitude of being willing to compromise and be open to new ideas.

Another way to handle this relationship is to decide that you will each make the final decisions in specific matters. For example, you might agree in writing that you will have the final say in all design decisions, and your partner will have the final say in all development decisions. This can still get sticky though, when it comes to matters of finances, your brand, etc. If you enter a partnership, be prepared to compromise! In my opinion, it’s better to have one person who’s the boss, whether it’s you or someone else.

Pros

• The partners can specialize in different skills, providing a more complete service for clients.
• Having another brain in the mix can be great for brainstorming!
• A second opinion can be valuable for critiquing designs, website testing, and trouble-shooting.

Cons

• A partnership has no boss with the final say, so decisions must be reached by consensus.
• If you ever choose to dissolve the partnership, you’ll have to figure out the smoothest way to do it (Do you split your clients? Can you both use your partnered work in your personal portfolios?).

3. The Manager

This is the guy who probably initiates relationships with clients and then contracts out most or all of the work to other freelancers. This is a good option if you enjoy developing relationships, sales, dealing with clients, and managing. If your passion is design and you’re not the greatest people person, this may not be for you.

Pros

• Very independent! Similar to a Lone Ranger, except that this person outsources the work.
• You can focus on one part of the business and let other experts handle the rest.
• Your skillset doesn’t need to adjust as much. While you should be familiar with new technologies, you don’t have to be an expert in every one.
• Having several people work on a project can be great for filtering through ideas and selecting the great ones. You are able to bounce ideas off of each other and brainstorm together to figure out solutions to problems.
• You get to interact with other great freelancers. This interaction is great for learning new things, networking, and developing friendships.

Cons

• You will need to find lots of business, since you are paying others to do the work. You will have more free time to find business, but your expenses will be higher as well.
• You may not be doing what you love, if your passion is design. You will sign off on work before it goes to the client, so you are the quality control, but you won’t be getting your hands dirty designing, unless you choose to do so.

4. The Mercenary

This is my personal favorite, and the model that I am trying to develop myself into. Historically, mercenaries were soldiers who worked for the highest bidder, rather than fighting out of allegiance to a certain king or country.

This freelancer has developed relationships with other design companies and developers, and simply works on projects that these companies outsource to him. Why am I such a fan of this method? Mainly because it supports long-term relationships with clients who are educated about design, and it reduces the amount of paperwork for you.

If you’ve got 5-10 other design companies who send you a few projects a month, that gives you a consistent flow of work (and income) without the hassle of trying to find new clients. Also, your client (the design company) already understands your business and is on your side.

Sometimes designers struggle in working with normal clients, because they don’t understand why it’s a bad idea to use a cute photo as the page background or rainbow text. It’s often necessary to educate your clients about design in order to give them the best possible final product. If you supply services to other design companies, hopefully they will already understand the principles of good design and will support your artistic decisions.

Pros

• More steady flow of work (and cash!).
• Eliminates the hassle of finding new clients.
• Less paperwork (contracts).
• Educated clients.
• Long-term relationships.
• Fewer non-billable hours.

Cons

• If one of these relationships dissolves, you may lose a significant chunk of income and have to find new clients.
• It’s easy to forget self-marketing when you have long-term clients. Don’t neglect to keep marketing yourself, or you’ll be out in the cold when you lose a client!
• Without practice, you may grow rusty in your new client-finding skills and sales pitch.
• If you’re the type that likes to do new things constantly, you may feel like you’re stuck in a rut, especially if your clients send you similar work regularly.

What business model do you use? What pros and cons have you found in your personal way of operating? I’m eager to hear how you do things and what you’ve learned.

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