"And here begins a journey..."

[Freelancier]

Like a lot of us out here, I have a one-person consulting shop, have had it for most of the past 20 years. Most years, I'm able to book between 1200 and 1500 hours, the last two have been about 1450, and that's kept me very busy, busy enough that this year I raised my rates 10% hoping to push one or two clients out...

Didn't work. My backlog at the beginning of the year was 2 months and growing. Then I landed two new clients in the same week with two good sized projects. I initially estimated the projects to each be 4 months long, so about 800 total hours; I've since discovered that they will likely push the total closer to 1000 hours.

Now I've gone the subcontracting route in the past. Pushed part of a huge project to another great developer, but I found that I couldn't effectively manage someone while still working on my own projects. Just a character flaw on my end; I can do one or the other, but I suck at doing both at the same time. And I'm not overly happy doing it either. And I get control-freakish about my projects, thinking no one can do it as well as I can... so there's that internal battle to fight.

So my first reaction on getting the extra customers was to shut down all marketing and prepared my family that I was going to be working weekends for a long while to keep up with the demands on my time. Which, as my wife said: "That's just what they taught you in business school, right?" Uh, no.

So I'm expanding my business. But doing it in baby steps.

I already knew someone who I had worked with in the past -- who had been a project manager, VP of IT, good skill set for managing projects and people -- and who was available, and he's now a project manager for me. And he went and got a developer who he had worked with for years and who is supposedly excellent (don't know yet, but I'm hoping it's true). So now I have a couple of extra people, working as subcontractors, not quite ready yet for real employees and I definitely didn't consider making them partners at this stage. Too early. I seeded them with the two new clients and I have another couple of good-sized projects from existing clients that I'm happy to let them take on. So that basically gets them to the 1000+ hours that I targeted for them for this year. My role with the team is to be quality control and to help manage the client.

So I have a mini-team, one project manager, one developer. The hope is that the demands on me for managing them will be less with this configuration than with a developer I'm directly managing. I also have tasked the project manager to get on the phone with his extensive business and personal contacts and find his team more work.

And I'm still fighting with my control-freakish tendencies by saying "it'll be good enough if the work is good enough." We'll see.

I'm compensating them with a percentage of the work (a bigger percentage if they find the customer), but still keeping enough that it'll be very profitable for my company and help me fund the stage that comes after this. The plan is that they bill 1000 hours this year, 2000 next year (by adding another developer), and then we try to get them to 4000 hours the year after that and everyone who wants becomes an employee and we take the next step in our growth that way. Good to set goals, right? Well, they agree that they can accomplish those goals and are working on what they need to do to make it happen.

Meanwhile, my backlog is still 2 months and growing for work I'm not handing off. My plan for me is to decrease my billable hours to 1200 this year. Don't know if that will happen, but it's my plan.

I find that now I'm hunting harder for new jobs as well. In the past, I was pretty lackadaisical about hunting for jobs, mostly just using Google ads to get customers to call me instead of trying to drum up more work from my contacts.

So... it's good now. New clients are happy they're going to get faster response than if I hadn't decided to expand, current customers are happier that they aren't suddenly on the backside of an 8-month backlog. And I'm happy that I don't have to worry about an 8-month backlog. And the two guys I brought on are happy that they have something fun to work on without the pressure of having to start a new business without any work in hand. So far: win, win, win.

But the journey is long. And there will be potholes along the way.

A year ago, I didn't expect that I'd ever grow the business past what I could handle. At that time, that was just me. We'll see if that's still true with what I'm attempting.

[CCAdamson]

Congrats on the growth and success

[Freelancier]

Thanks. Not a success yet, not even close. Just the first steps of a journey.

I didn't write the above as a "humble brag", if I want to brag, I can do that much more directly. I figured there were other people out here running one-person businesses, who were afraid of growing too much, afraid of that "next step" beyond having a single-person company. I was at the point where the amount of work coming in was either going to kill me or push me out of my comfort zone. Others will get to that same spot. Can you manage others effectively while still doing your own work? Can you stay on top of more clients than you're used to handling? How do you handle "too much success" and keep the values you used to guide your business to this point? All questions that hopefully everyone will get a chance to answer sometime in their future.

I think I've found a way to make this work, but won't know for probably 4-6 months or so, once we get the first project delivered. And I'm scared that this will blow up in my face and damage my business. So there's that.

[CCAdamson]

Success is a relative term of course but whether meant to be a brag or not it still merits congratulations as you are moving forward doing something you love to do and experience growth, probably professionally and personally, as you do it.

It is very good to know, as someone who hopes to be in your same boat soon, that there are other going through this as well.

[jaijai]

Nice job! It's stories like these I love reading. Although it seems like you've got an expansion plan down, have you thought about arranging a meeting with a company specializing in making businesses scalable?

[Freelancier]

a meeting with a company specializing in making businesses scalable?Not yet. Going from 1 to 3 people isn't what they call "scaling" usually. And the project manager I got is a 6-sigma black belt, so he's going to help bring repeat-ability to my existing processes. Once we're to that point and comfortable that we have it under control, we'll go to the next step and start scaling and then I think having a scalability consultant on hand might be a good idea. Did you have any companies in mind?

[Freelancier]

So we hit the first hiccup this week. The team was working with a client on a spec for a new project. While we're in the meetings with the customer, the project feels to me like a $60K project, which is perfect sized. Then the team gets back, starts analyzing the requirements and comes up with a $100K project. Ooooops. I check their work and we can pull maybe $10K out of it, but I it's really a $100K project when all is said and done. Ruh-roh! Hard to sell that to a client.

Where did the numbers go wrong? Turns out that the size was exactly what I thought, but my math was wrong. I was picturing the number of hours the way I figure it for me and I'm usually high, so in my budgetary quotes to clients I can declare that an "hour" costs about 25% less than it really does and the numbers work. But now the other team is working on it and I don't have that luxury, because I don't know if an hour really costs my hourly rate or something more or something less. Adds uncertainty into the quote that wasn't there before.

On top of that, the team wanted to work together to create the spec, so instead of what I'd have before -- one person producing a spec in the allotted time -- I had two people for about half the allotted time and one person for the rest of the time. Made the spec phase come in high -- not high for a $100K project, but high for a $60K project. So I had to eat some of that cost. And I couldn't bill my time helping them either. I'll break even on this phase, but it's definitely a learning experience.

In case anyone wants to know how we dealt with the client: as soon as we detected the issue, I explained it to the client who then went back and talked about it and they have scaled back the initial phase of the project to about half the overall scope, which then leaves us a little wiggle room later to add more features back in. Customer wasn't happy with the changing numbers, but they were happy I brought the problem to them early enough they could adjust (instead of getting 3/4 of the way through the project and then telling them they need to come up with another $25K to finish it). So we're still good, but it was a bit stressful until the client agreed to cut the scope.

Meanwhile, their other project had a "prove it" mini-project that completed on time and on budget and we're demonstrating it to the client next week and expect they'll be thrilled. That client handed us the project after spending over $100K with an overseas consulting team who probably gave them $40K of actual value, so we're going to be doing a lot of "prove it" steps with this client until the client gets comfortable. And that's fine, because it keeps the team focused on what's important. And the first "prove it" step was a piece that the other consultants couldn't figure out at all; we proved we could do it in 16 hours. A nice win there.

Growing pains.... We're discussing adding a third person to their team. I'm sooooo not ready for that, but may not have a choice if we land another big project this year.

[Business Attorney]

There are always hiccups along the way, but it sounds like you have effectively dealt with them this time. Yes, it is challenging to move from a one-person shop to managing a team, but as you noted in your first post, the benefits hopefully outweigh the burdens.

Good luck!

[Freelancier]

Year 2 of the experiment. Scheduling has been an ongoing issue. The other team's developer hasn't been able to bill more than 25 hours a week, I normally hit 30-35. So projects fell behind, we had to juggle my schedule to take on more of their work, which eventually was ok, but it made one project later than the customer wanted it. Not fatal, but stressful. We increased revenue last year by 30%, which was nice, but below the desired target. About to land another large project for that team to add to their pipeline and the customers they're currently working keep coming back for more, so that's a good basis to start the new year.

We just finally got to the point where we've had to beef up infrastructure to handle multiple people working on the same project. I hate infrastructure stuff, but it falls to me, so we're making it work. Slowly.

All-in-all, a successful experiment so far... with caveats.

And, yes, in general, I only have time to check on that team about once a week or so. So I'm glad my project manager is someone I trust. If I have to replace him some day, that'll be a YUUUUUGE issue for me.

[BobOlmstead]

It sounds to me, you are self aware enough to know your own darkside but perhaps struggling to truly overcome it. Growth, not growth, none of it matters in my view, if you're not enjoying the ride along the way. So are you? Are you enjoying the ride along the way? I think you have a ton to feel great about in the here and now but it seems, you dont feel that way. Why? If you have not read the book, The Emyth Revisisted by Michael Gerber, I strongly recommend doing so. And congratulations on your success because the reality, you have already achieved a great deal.

[Freelancier]

The business part of what I do is a means to an end. Parts of the business are fun and engaging, parts are pure drudgery, but it all serves as a means to an end. Growing my business may or may not serve those ends -- won't know until I get closer to that end. Having the business at all definitely serves my needs.

So, short-term stress, potential for longer-term gain, it's a trade-off. In my world, not everything in life is supposed to be fun, especially once you have lots of commitments to keep every single day. Sometimes you put up with what happens today because tomorrow will be much better if you handle today well.