Ask HN: How to grow, evolve a freelance business • Hacker News Board

Post by aboutsimon » Thu, Apr 05, 2018, 9:19 AM UTC

I've a freelance/consultancy business for almost 2 years now. With my strong Linux Sysadmin and back-end dev background I specialized on the hole "DevOps" theme and basically help customers to migrate their classic on-prem/basic cloud infrastructure to a more modern approach. Containers, CI/CD, metrics monitoring, centralized logging, deployment strategies, all of that stuff.

The positioning works great, because the topic is kind of hyped now with tech like Docker, Kubernetes, Prometheus etc. and people offering these services with a decent level of experience are still rare. I never had trouble finding new customers and the business is doing great.

Still, facing the facts, as long as the business solely depends on me, my growth has a hard cap. I will not overcome my limited time, I can only do a few projects at the same time and the market will only accept a certain rate for my services. Also getting ill or more free time for family has direct implications on the business performance. It just doesn't scale.

To overcome this situation I need to evolve my business into something that scales. The easy answer would be just hire some people. This would introduce a lot of fix costs I'm trying to avoid. Also the investment from my side (time + money) is something I can't really define. Before new people benefit the business in any way they would need training, which has direct implications on the time I can spend in projects. I would also face the risk of employees leaving the company for whatever reasons, which would have quiet an impact.

I wonder if you maybe tackled a similar situation or have a tip how overcoming this scalability issue could look like. Do I maybe need to accept that substantial growth requires a substantial investment?

Post by brudgers » Thu, Apr 05, 2018, 1:47 PM UTC

There's no overcoming the limitations other than the options you mention. That's the structural nature of your business...it scales linearly with available billable hours (or its equivalent). It's why business models that scale linearly are usually unattractive to Silicon Valley venture capital. In a sense, scaling nonlinearly is what separates a startup from an ordinary new business.

Traditionally, one way to (linearly) scale a consulting business is by partnership with other consulting principals. Doe Consulting, Inc becomes Doe, Moe, & Joe Consulting Group, LLC. This distributes management of sales, technical leadership, and staff management among several people and makes adding employees and feeding the project pipeline more manageable because they can execute simultaneously among Doe, Moe, and Joe.

One way to scale revenue without expanding is to raise your rates. Higher rates screen for better paying clients. Good consultants are not fungible with bad consultants and clients who want you to compete with free are either bluffing or don't have critical problems that need solving.

Good luck.