Freelancer’s Guide to Surviving the Famine Cycle

If you haven’t started freelancing yet, or you’re still quiet new to freelancing, it’s pretty much well-known that most will have feast or famine cycles. With 12 years under my belt as a freelancer here’s what I’ve done to survive slow seasons.

Save 6+ months of living expenses

This is the number one thing that’ll make or break you. Don’t get complacent when it’s raining money. I repeat. Don’t get complacent when it’s raining money. That’s the time that you should be stocking up to at least 6 months savings and if you could save more even better. Keep your expenses in check (more about that later). Once you get to 6 months of savings, pretend it doesn’t even exist. That is your emergency fund and you shouldn’t touch it unless it’s an emergency. So if you know how much you absolutely need to spend every month, multiple that by 6 months and you’ll have your savings goal calculated.

Having an emergency fund will give you a ton of leverage over having to pick up a crappy project during the slow season just to pay the bills. It’ll help you keep cool so that you don’t come off desperate when you’re talking to a prospect and believe me they can smell the stench of desperation easily.

Raise your value, then raise your rates

Something that a lot of people say is to raise your rates, but it’s not just that simple. Yes, in some situations you could raise your rates without having to change anything else at all. In order to raise your rates, you need to raise your value. Why should someone pay you more? You need a very valid reason. You should be in your client’s head because they’ll be thinking, “What’s in it for me?”. Can you do something faster than most? Do you have special information that gives you a huge advantage? Can you help your client avoid huge headaches? Can you help their team become more efficient? Always try to frame the value you are delivering over just the deliverables and don’t be afraid to make suggestions to your client that you think would help them.

Try to separate yourself from being dispensable, a commodity. Here are some ways of doing that:

• raise your confidence level and always have something to back it up
• your value raises if you come in recommended by someone else so nurture relationships. Networking/referrals give huge returns.
• are your clients needing desperate help in an area that you could help with? Ask to help there.
• try to move up to a more strategic role or a hard-to-find specialized technician. What’s your unique selling proposition? Remember, there’s a ton of people that could probably do the same thing that you do in terms of technical work so you need to find what separates you from the crowd. Not only that, it needs to be something that your clients actually care about and want to pay you for, not what you think they care about.
• build up social proof that you are as valuable as you say you are: testimonials, case studies, mentions in the press, notable work, relevant work (for instance, working with a different client in the same industry)

Spend less than what you earn

This ones self-explanatory, but the difficulty is following through with it. If you spend less than what you earn you’ll always be guaranteed to have surplus money. It’s simple math. Ideally you want to be using only a small percentage of what you earn. Granted, this is difficult in the beginning because you won’t be earning as much in your freelancing career, but definitely strive to have that as a goal. Now, there’s obviously some exceptions to this rule. True emergencies such as medical emergencies or life emergencies (your house burned down), you may have to spend more than you earn. Also if you’re making investments (spending money on marketing, personal/business development, etc) those are generally okay to spend more than you earn if you see they’ll have a positive return on the investment.

Regularly prune your expenses

If you’re in a dry spell, “trim the fat” and regularly remove expenses that you don’t need. You could use a tool like mint.com to input all of your bank accounts, credit cards, loans, etc to see where all your money is going and quickly identify any unnecessary expenses. If you have credit cards, treat is as a debit card. In other words, if you don’t have money in the bank, don’t use your credit card. The interests will kill you. So when the statement comes in at the end of the month you’ll pay it off in full. To put the icing on the top, get some good credit cards with cash back rewards while you’re making the most money. Credit card companies give you the best credit cards when you have a good annual income to report and you’ll be able to get a high credit limit. You could use that to your advantage by lowering your credit card usage which will boost your credit score. In other words, if you spend $1000 on your credit card per month and your credit limit is $5000, you’re usage is 20%, but if your credit limit is $12000, it’s only 8%. Anything between 0 and 9% usage will boost your credit scores significantly. Better credit scores allow you to get better interest rates which will help you lower expenses (auto loan, personal loans, good credit cards, special zero-interest credit cards, mortgages, etc). Pro-tip: call your credit card issuer every 6 months to raise your credit limit. Sometimes it’ll get denied, but the higher the credit limit you have the more your credit score will go up as long as you don’t spend more and keep spending the same amount as usual.

When work is slow your job is to not become stale

Is easy to get down when the work is slow. You could get lazy and stop working on things that’ll help you get future work. Now, taking time to decompress is not a bad thing. It’s actually healthy to do, but if you take a significant amount of time off, having a specific goal is beneficial.

There are plenty of things you could do to avoid becoming stale during slow season:

• get in touch with previous good clients and network with your acquaintances
• cold email/message/call potential clients after researching them
• work on being more knowledgeable in your particular area of skills
• research what’s hot and learn it
• write articles around your expertise and publish it in multiple places
• teach others
• attend local meetups
• search for partnerships (if you’re a designer maybe with a marketer, if you’re a programmer maybe with another programmer, if you’re a video animator with a video editor or director, if you’re a copywriter maybe someone that works in PR)
• if you’re in an industry that contributes to open source, get involved

There’s plenty to do to weather out a dry season, but planning it ahead of time will help you so that you aren’t thrown off guard.