2 Ways To Achieve Income Stability As A Freelancer
Some suggestions for keeping your hair while freelance writing
One of the commonly cited pitfalls of freelancing is a wildly fluctuating income.
Never knowing what you’re going to be making from one month to the next — or even if you’re going to be making anything at all — can be extremely stressful. In fact, it can slowly gnaw at your sanity!
There are multiple ways to attempt to “solve” this problem. The following are a couple of my ideas.
Diversification and Pipeline Development
One way to stabilize your income as a freelancer is by diversifying your income to the fullest extent that you can.
I’ve written previously about the various ways that this can be achieved in practice. Those articles, also from this Medium publication, are below.
Freelance writers can diversify their income in several ways. You can:
- Split your income between various types of writing so that if there’s a general downfall in one sector your other income stream will be unaffected in the other. For instance, you could provide both freelance journalism and freelance content marketing services.
- Work across industries and geographies.
- Work with a wide variety of clients. The golden rule here: don’t let one client constitute a significant part of your income. Some freelancing experts recommend never letting one client constitute more than 33% of your income. Others say 20%. I don’t think anybody can cite an exact number. It’s the principal that counts.
I’ve made the point before that not only can diversifying your income make your business more resilient, if done properly it can theoretically make freelancing more secure than conventional salaried employment.
Think about it. An employee is dependent upon one source for income. As a freelancer, you can diversify your options to a far wider extent.
To diversify as far as possible you can also:
- Cultivate a mixture of active and passive income sources. For instance, you might write books in addition to client work.
- Work through various channels. For instance, working solely through Upwork is, in my opinion, a bad idea. You’re at the mercy of one platform. But working through direct clients and a marketplace could be smart.
Anchor Clients
The second way to attempt to stabilize your income as a freelancer — and a freelance writer is obviously just a specific case of that — is by ensuring that you have a basic core of income every month.
Freelance writing author Jennifer Gregory in her book The Freelance Content Marketing Writer refers to such clients as “anchor” clients. I think that it’s a decent descriptor.
The idea is that you’ll have one client — or a core of them — that allow you to take care of life’s basic expenses, like paying the rent/mortgage and electricity.
Personally, I think that this is a terrific idea.
It gives you a “worst case scenario” in which you can live very meagerly for one month but at least you won’t have to worry about things like not paying rent.
You can attempt to achieve a basic “core” income by:
- Signing up a client, or multiple clients, for a monthly retainer. This guarantees a fixed monthly amount so long as the contract remains in force.
- Working for clients who send you a predictable volume of work every month. Of course this isn’t quite as secure as the above, but many clients are wary about committing to monthly contracts.
Don’t forget: in freelancing you should expect the unexpected:
The ideal scenario (in my opinion): combine the two tips above:
- Diversify your income as far as possible by signing up a variety of clients in different industries.
- Try to ensure that you have at least one retainer / steady client in that mixture that covers rent and basic expenses.
