I just recently quit my 9-5 job to freelance full time and I’m already seeing how the freelancer feast or famine season can affect my business.
As a freelancer, sometimes the work is flowing to the point where you hardly have time to take a lunch break throughout the day while other times, things are so slow you start freaking out about how you’re going to pay bills at the end of the month.
Since freelance income is variable and sometimes you never know where your next project is coming from, it can be stressful especially if you crave stability.
If you’re trying to beat the feast or famine seasons of freelancing, here are a few ways to make your workflow and income more stable and predictable.
Establish Multiple Streams of Income
The best thing about freelancing is that you can establish multiple streams of income. You can do this by either obtaining several different clients or offering a range of services.
You can also take on side projects and develop passive streams of income like starting a blog in your niche and monetizing it. When you establish multiple streams of income, it actually makes freelancing seem more stable than a traditional job.
If you happen to lose your traditional job, you’ll probably lose all your income. If you lose a client or an income stream as a freelancer, it won’t wipe out all your income and you can always replace it.
Depending on the work you do and how you are paid, you can have income coming in every week or even every day as a freelancer.
Set Up Long-Term Contracts
If you want your workload and income to be more predictable, set up contracts with your clients and agree to the terms of service.
For example, if you’re doing a big project, make sure the client has specified how long they’ll need your service so you can work on lining up another client when the project is over.
You can also set up 6-month contracts for clients who require regular work from you. This can be beneficial not only to you but to your client who prefers to work with someone who is dependable and can deliver consistent work.
Save Up a Cash Buffer
While the feast part of the equation is great, the famine part is another story. It doesn’t feel good when you don’t have enough work for the month and it can negatively impact your cash flow.
Freelancers pay more taxes than employees and may have other additional business expenses to cover in addition to regular living costs.
Having a month where your expenses exceed your income is not unheard of and the only way to combat this without going into debt is to save up a cash buffer ahead of time. If you already have some cash socked away in your checking or savings account to act as a buffer during slow months, you won’t have to worry as much.
A cash buffer is not the same as an emergency fund and should be kept separate from your emergency money. During high-income months, I always set some additional money aside to add to my cash buffer and it comes in handy during the slow seasons like around the holidays.
Never Stop Marketing or Networking
About a month after I quit my job to freelance full time, my mom asked me how things were going. When I told her I lost three clients (one of which I had given up voluntarily), she was shocked.
She was concerned and asked me what I was going to do. I just shrugged my shoulders and told her I’d just find new clients. For freelancers, it’s common to lose and gain clients throughout the year.
That’s why I’m always marketing myself and looking for new work. It’s important to attend local networking events, conferences that interest you, online webinars and more in order to meet new people and make professional connections with them.
You never know where your next client will come from so it’s crucial that you are always networking and marketing yourself.
Summary: Embrace the Ups and Downs of Freelance Income
Freelancing may seem like feast or famine sometimes, but that doesn’t necessarily mean it’s a bad thing. It’s important to make the most of the feast season and prepare for the famine when it comes. Establishing multiple streams of income, long-term contracts and continuing to market yourself will all help smooth things out.