Discussing Agencies.

I’d like to talk about agencies because I’ve been running one for a while, and I have also worked in an agency, have worked for agencies as a freelancer, and I am generally interested in the reason for their existence.

I studied economics and business, so I know the theoretical points, but I will not write about theories. Although, there is a sense of theory in my explanation.

From an economic standpoint, everything has a specific reason for being there, people are willing to pay for something, meaning that is has value. Value for people, means value for the economy.

So we can ask ourselves, what is the reason for the existence of agencies? Why do people pay money to have agencies to do their work? What distinguishes agencies from freelancers or when a company has employees that do the work?

Of course, some answers can be considered trivial, but I think they matter, because it also comes to the core of the motivation for being an agency owner.

Service Oriented

Agencies are about delivering services. Services can be marketing, web development, graphic design, anything that involves people actually dedicating time to achieve a specific customer need. Specific, because the work is usually custom —it fulfills customer specific wishes and needs.

Often times, customers can do those services in-house too, but they have a lack of time, skills, or the time to get those skills in-house (recruiting). And sometimes the shortage is only temporarily. It is easier and therefore more cost-effective to get those skills from an agency. Nevertheless, we haven’t excluded the possibility of selecting freelancers to do the work then, right? They are most suitable for fitting in those requirements.

Why not hire a freelancer instead of an agency?

A freelancer can provide most of the services that an agency can deliver as well, but it cannot always provide the additional value that customers also need. That is because freelancers are often specialized in one thing. Some can, I’ve read about modern freelancers that are jack-of-all-trades — handling marketing, as well as developer projects.

Nevertheless, to have the skill to come up with a concept for a marketing campaign — to shoot and edit videos — and to develop a website that displays those videos —will be difficult to do effectively. Freelancers are better when there are specific needs.

On another note, I’ve seen situations when companies did not want to hire freelancers because they fear that freelancers will not be available all the time. There is a high chance that a freelancer gets sick or jumps off a project due to personal reasons.

This, we have experienced in our agency too, because an important developer that was working a freelancer suddenly disappeared — he decided for personal reasons to move to another country — without letting us know or giving the time to find someone else. It is therefore a high business risk.

What are the benefits of an agency compared to freelancers?

Many freelancers that we’ve worked with do not have the business orientation that agencies have. What I mean is, that agencies have developed a highly effective process including multiple people that work in tandem to delivery good quality work in a short amount of time.

Agencies can deliver a whole set of services, they do not always have the manpower in-house, but they have the processes and knowledge to get the right people for the job, and they can manage them.

Also, from a communication perspective, usually clients don’t talk directly to developers or designers in an agency. They talk to someone who knows the process and streamlines the communication to not overflow the workers with information. It’s a need-to-know basis — therefore they also don’t get distracted by clients not paying bills or making a fuss about small things.

What to do next?

As always, it depends on the situation, both freelancers and agencies have it’s benefits. In some cases, the project is to small and specific for an agency — consider for example a developing a one-pager website for a service or product.

The amount of communication between the client, the project manager, and the actual developer hardly weighs in on the actual work that needs to be done. Communicating with a freelancer on a product can give the client more control, but the client needs to be aware that he is responsible for guiding the work.

So, analyze your situation and consider the above options to come to a conclusion. For sure there are more factors, let me know in the comments what you think.

Also posted on Medium.