As a startup, freelancers were essential to my success. Since 2003, I’ve built nine businesses using freelancers. My current business, True Blue Life Insurance, employs 16 freelancers. I also use additional freelancers for miscellaneous tasks based on my business needs.
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I firmly believe that any startup who overlooks the value of freelancers is operating at a disadvantage for a number of reasons. Skilled freelancers allow startups to keep costs down while providing services essential to operational success. When done correctly, using freelancers is a win-win for both parties.
Three considerations when hiring freelancers for your startup
Here are a few things to consider when hiring a freelancer for your startup:
Use individual freelancers, not agencies.
When hiring freelancers, you can choose to hire individual freelancers directly, or you can contract an agency. At first glance, agencies may seem like the way to go because they have a team already in place. Keep in mind that hiring an agency means you’re also paying for the agency to make money on top of their employees. They may charge you $125 – $250 an hour, but the freelancer that works on your project only earns $35 an hour.
Photo source: The Freelancer Generation: Why Startups And Enterprises Need To Pay Attention (Rampton, TechCrunch)
Instead, I recommend hiring a freelancer directly at $25 – $75 an hour. While this means more work for you at the outset, it’s worth the time and effort. In my experience, hiring an individual freelancer results in lower costs and better outcomes.
By using individuals, you communicate with the person who is doing the work. You save money and you’re more likely to establish a long-term relationship with someone who understands the needs of your business. The best freelancers are the ones who care deeply about the quality of work they deliver. They want their work to help you succeed as much as you do.
Hire the labor you need, as long as you need it.
The best startups do everything they can to stay lean in the beginning. In the early stage, a startup may only consist of two or three people with a narrow selection of skills. This is where hiring freelancers can help startups grow quickly.
For specialized tasks like websites and marketing materials, freelancers are an affordable and effective way to acquire these tools while keeping your time and your focus devoted to your original ideas. You don’t need to hire someone full-time to build and maintain these systems, especially if you’re a startup. Pay someone, build the relationship, and move on.
Don’t try to do those things yourself! You’re kidding yourself if you think you can do it that way. You’ll never get anything done. Learn the basics — enough to ask the right questions — and then hire freelancers to do it for you.
Use third-party platforms to hire and pay freelancers
Just because you’re hiring individuals doesn’t mean you have to transact with them directly. Using platforms like Upwork, Fiverr, or Toptal ensures that you have a method of recourse if the freelancer doesn’t deliver the work you need.
It also helps you avoid payroll and tax requirements. When you hire through a platform, you’re no longer responsible for any of that. The platform handles it, and that’s one less worry on your books at the end of the year.
When hiring, I recommend using small, fixed-price jobs up front. Only pay at the end of the project, and work within the platform. If a freelancer is asking for money up front or wants you to pay them outside of the platform, that’s a red flag. Work to avoid situations where you have no recourse or where you’ve paid for incomplete (or nonexistent!) work.
Be sure to check the work you’ve received before you deliver payment. At the end of the day, the buck ultimately stops with you. If your web developer delivers bad code and your website doesn’t work, it’s your fault. If the graphics the designer delivered result in a badly printed business card, it’s still your fault. If you’ve already released your funds, it may be impossible to get the freelancer to fix their mistakes.
Concluding thoughts on hiring freelancers for your startup
The first freelancer I hired was a disaster. I found someone who wanted to bill outside of a platform and wanted half the cost of the job up front. After two months the job fell apart and I was out for the money I’d already spent. My second experience — a freelancer I found through a friend — was much better.
I waited until the end to mention that so that I can point out one thing: Bad experiences can happen. Any CEO has to make careful decisions about who they hire onto their team, and finding great freelancers is no different.
Any startup or small business should consider using freelancers to grow their businesses. When done correctly, the positives far outweigh the negatives and can ultimately net more revenue for any company.
Brian Greenberg is a multi-faceted entrepreneur currently serving as vice-president, co-founder, and founder of multiple online businesses. His online insurance brokerage—True Blue Life Insurance—has grown steadily since 2003 and now sells insurance in all 50 U.S. states via his website: TrueBlueLifeInsurance.com. He is recognized as one of the most creative people in the insurance industry and serves as a member of the Million Dollar Round Table, a premier association that represents the top one percent of financial professionals.
