One of the most important tasks that you can do either as freelancer or small business owner is diversify your income. That means that you have multiple revenue streams that are independent from each other. The reason? If you lose one client, you still have several other ways, such as anchor clients, to supplement your income.
What is an Anchor Client?
The idea behind “anchor clients” comes from anchor stores. Those are the department stores, such as Nordstrom or Macy’s, that draw in customers when they visit a shopping mall, which in turn provides financial stability.
Alexis Grant, a career blogger, defines anchor clients as “a client that pays you a good chunk of what you need to earn every month, and on a recurring basis.” Just like anchor stores at your local mall, these clients are vital for freelancers and small business owners because they can help you gain exposure and keep the cash flowing.
Why Your Business Needs 2-3 Anchor Clients
Since you know what an anchor client is, let’s explain why having a couple of anchor clients under your belt is beneficial for your your business.
Stabilizes Your Cash Flow
Numerous studies throughout the years have determined that “cash flow problems can be one of the leading causes of failure for businesses.” And, that’s probably the main perk of anchor clients; they help stabilize your cash flow.
Recurring payments allow you to create an accurate monthly budget so that you can handle all of your expenses and overhead, as well as help you plan for future growth and alert you to any potential red flags.
Allows You to Focus on Your Work
Another benefit is that it frees up your time from constantly looking for work. Instead of trying hitting the freelance market, you can jump into a project and do what you’re great at.
If you’re a blogger, for example, wouldn’t you rather by writing for the same clients each month, and getting paid for your service, instead of marketing yourself to numerous one-off clients? Not only do you have that predictable income, you also have a predictable workload that you’re comfortable writing about.
Helps Attract More Clients
The final benefit of anchor clients is that they can help bring in additional clients. I’ve experienced this myself throughout my writing career. I’ve been able to network and gain exposure through my clients, which has lead to writing gigs for new clients. Without those them, I wouldn’t have been able to secure these opportunities because they gave me their stamp of approval.
And as a freelancer, those word-of-mouth referrals are one of the best ways to grow your business.
How to Land an Anchor Client
There’s no doubt that anchor clients are important for your business. But how can you go out and land them?
- Identify Your Ideal Anchor Clients. Who are the clients that specifically could use your product or service?
- Build Your Portfolio. If you want to attract top clients, make sure that you have online portfolio that showcases your best work.
- Use Your Existing Network. Whether it’s a fellow freelancer, a current client, or an industry thought leader, you want to use your current network to help you find an anchor client. For example, maybe your web designer friend just built a site for a company. That company is looking for a writer for their new site. Your friend could introduce you to their client and just like that you landed a client.
- Ask For Testimonials. Don’t hesitate to ask your satisfied clients for a testimonial that you can place on your website.
Once you have those 2 or 3 anchor clients, you should still look for a healthy mix of clients that includes your anchors, several semi-regular clients and one-time clients when you have the spare time.