There isn’t a general rule of creating an individual profile or an agency profile on Upwork. It depends on your needs based on the 3 scenario
New individual developer freelancers have a dilemma as to why a client will prefer an individual over an agency on freelancing marketplace like Upwork. With agencies, they can get more people to work for them who have more experience.
The statement may look to true that clients will hire only companies. So individual freelancers may have an issue getting their share of work.
However, the ground reality is entirely the opposite.
I am an individual freelancer on Upwork and has delivered more than $100l work on Upwork.
Lifetime earnings may not be that important. Here is my Upwork’s certificate of earnings for the amount I made in the last 3, 6, and 12 months as on 8th Feb 2017.
Note: Upwork is not the only source of clients for me.
So individual developers don’t have any future amongst big companies on freelancing marketplace sites like Upwork is a myth. Individual developers have many advantages over companies.
Why Client Prefer Individual Developers over Agencies on Upwork?
For developers, I can be sure why clients on Upwork prefers individuals over agencies. However, in other niches, I am sure most of the points I mention do apply.
So, here are some of the critical advantages that individual developers have over companies and so the clients prefer to hire an individual over companies and agencies.
1. Low Cost Due to Less Overhead
The cost of hiring an individual developer will always be lower than utilizing the same quality of developers in a company. The reason for the low price is not because of low quality but other expenses that a company has to borne that individual freelancers don’t have. The biggest of them all is the rent expense.
Rent is a significant portion of the total expense that a company has to pay for the employees’ workplace. At the same time, individual freelancers working from home don’t have this expense lowering the cost clients.
Rent isn’t the only additional expense for companies—the cost of extra people like a team leader or project manager or HR people. Even if the company is small and doesn’t have those team leaders and project managers, it has the cost for owners’ profit that clients need to pay.
The cost scenario is highly in favor of individual freelancers and companies competing with such individual freelancer only on the price front, has a very high chance of running out of business due to low-profit margins.
2. Requirement Explanation is Easy
We are talking about developers and development projects where a critical aspect is to understand the client’s requirements.
Companies have a disadvantage when trying to understand clients’ requirements. Often the person in discussion with the client is either the owner of the company or a business development executive.
Usually, the business development person handles clients to understand the requirement. The requirements are then passed to the project manager or the team leader to work on it. So many people are involved makes it hard for clients to get the requirement communicated. Often it leads to projects delay.
For individual developers, there aren’t many layers of communication. So explaining the requirement of what they need is easier for clients. Requirements that aren’t feasible within the client budget get eliminated very early in the project discussions setting the right kind of expectation of clients.
So clients on Upwork prefer to prefer an individual over an agency.
3. Clarity of Experience
Clients prefer individual developers because they know what the expertise of the person they are dealing with is.
If someone hires me at $XX per hour, they know the person working has a decade of experience and has worked on so many projects. For companies, you never know what the overall experience of the person working on the project is.
Experience in the field of development matters the most. The reason being, it can eventually make or break the project based on the quality of code.
However, it may not be accurate for another branch of freelancing where the final output is good enough to judge the quality.
As an example, a designer, no matter who is doing the design, the satisfaction of the client for design means it is good design.
But for development, the client may be satisfied with the functional aspect of the code. However, the security aspect of a code or the architectural design can’t be judged based on the final output.
4. Brain Drain from Companies
There are no reasons for a developer to leave the job.
When an employee knows the source of projects for a company is through Upwork, they will try their hands on.
Employees are that smart for sure will eventually become freelancers. It can mean intelligent people will eventually move out of such companies and become freelance developers.
Those who cannot manage projects from Upwork will be the ones who continue doing the job in the company. A very happening phenomenon in small web development companies in India.
Should You Create an Individual or an Agency Upwork Profile?
If I search for WordPress developer, I see we have over a hundred thousand individual developers and only fifteen thousand companies. Individual freelancers outnumbering companies by such a big ratio isn’t a coincidence.
Individual freelance developers have an edge over companies.
Upwork works, and there is no denying it!
Otherwise, it wouldn’t have 1.7 million actively individual freelancers and agencies combined available for hire.
And if I do a job search, there are more than 100k open jobs by millions of registered clients.
So the question is, how can you make it work.
Should one create an individual freelancer profile or an agency profile?
There are advantages and disadvantages to both, but mainly it depends on your goals. And even if you’ve already created one, there is an option to switch.
Freelancing on sites like Upwork is one of the best things that has ever happened. It has given freelancers like me advantages like the freedom of time (Work anytime), freedom of location (work from anywhere), and freedom of choice (You choose clients).
There are many agencies on Upwork doing more than a million dollars in revenue every year. Likewise, many individual freelancers generate better revenue than the top paid Indian CEOs.
3 Scenarios for Easy Decision Making
So there can’t be a general statement like should one be creating an individual profile or an agency profile. It all depends on your need.
Still, we have three common scenarios:
- Starting as an Individual – If you are an individual who wishes to work for clients, don’t go for an agency profile to begin with. Once you have a sufficient number of clients to form a company, convert the individual profile into an agency profile.
- Starting as a team but one individual is prima facie clients – If you are a team of people starting as co-founder or partners (Here is my guide on how one should and when one shouldn’t partner), agency profile is the right way to start. If only one person is prima facie the client, an individual profile won’t be a bad idea either.
- Starting as a team – If more than one person will be interacting with the clients, it is a better choice to start as an agency in Upwork.
Choose the one that best suits your needs and use a template for all your Upwork proposals to get more responses from clients.
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