Comments on: Freelancer’s Survival Guide: Money Part 5

By: Ryan

Ryan — Mon, 13 Jul 2009 13:33:28 +0000

Thanks for doing this guide Kris! It couldn’t come at a better time for me as I work on looking at writing as a business.

By: Kris

Kris — Fri, 10 Jul 2009 19:15:29 +0000

In reply to Mark Terry.

Glad you folks are enjoying the posts and finding the advice useful. You’re exactly right, Mark, and I forgot about the 80/20 rule because I don’t follow it. (Thank heavens) But so many folks do and that can be scary. Patrick, sounds like you’re making the right choices at the moment. It’s tough out there right now, and I don’t advise anyone to make risky changes right now, unless they have to. Planning is always the key–and I hope the Guide helps with that.

By: Mark Terry

Mark Terry — Fri, 10 Jul 2009 19:03:00 +0000

Excellent advice. Not only do I make sure I have multiple clients, I’m somewhat cautious about the so-called 80/20 rule, which for those who don’t know it, 80% of your revenue comes from 20% of your clients. (This rule can be applied to a lot of things, but in the case of revenue and freelancing, it tends to be true). It does apply, but it makes me nervous. 80% of my revenue is too much to lose, so I’m cautious. I would point out that one year I had a big client that earned me more than $60,000. Typically now it’s around $30,000, which isn’t pocket change, but, well, HALF of that great year. If that client were to ask me now why I have diversified, I’d say, well, it’s because although you’re a great client, I can’t count on how much money I’ll earn from you.

To that end, I’ve recently started a publishing company that will start publishing an e-newsletter to a niche market in my area of expertise. Will it take over my business? It could. Do I want it to? Hmmm. Back to diversification. On the basis of a single e-newsletter? Makes me nervous. But that e-newsletter with other clients? Sure. That e-newsletter with other e-newsletters? Possibly.

So I’m doing the same thing. Diversifying. Having multiple clients. (Because one thing I’ve learned in 5 years of full-time freelancing, it’s that things change). And taking a hard, hard look at changes in the industry and trying to adapt to it.

By: Robin Brande

Robin Brande — Fri, 10 Jul 2009 00:04:59 +0000

Kris, these posts are all so wonderful and informative. Thank you so much for doing them, and for all of your teaching time in general. Thanks for paying it forward. You set a great example.

By: Freelancer’s Survival Guide: Money Part 5 | Foreclosures For Profit

Freelancer’s Survival Guide: Money Part 5 | Foreclosures For Profit — Thu, 09 Jul 2009 21:24:12 +0000

[…] See the original post: Freelancer’s Survival Guide: Mon… […]

By: Patrick

Patrick — Thu, 09 Jul 2009 20:23:42 +0000

“Have more than one client.”

This is the primary reason I am not a freelancer. I am a software consultant for a large company. I am an employee. My company outsources a significant percentage of the work that I do to partners and freelancers. The rates that they outsource are 2-4 times my salary(including insurance, 401K match, and other benefits)

I have the relationship and reputation to go independent, and even though I would be working for different companies at each engagement, my ‘customer’ would be my current company.

I could get the work direct, but I wouldn’t be able to charge the same rates that my company does or even the rates that my company would outsource at, and then I would probably need to account for time for sales – finding new customers.

It’s been a debate for me for a few years now. If I was able to stay busy for two years and build up two additional years of savings for a cushion, I could then cut back to working 50% of the time –

If it wasn’t for that only 1 customer issue…

I learned this lesson from one of my early jobs. The owner had 95% of his business tied up in one customer. They kept buying more computers and consulting from him. Each year the contract grew and he hired more staff. It went on long enough that he never even really considered it a risk to lose it. One year it went out to bid – and he just assumed he would get it again – and someone underbid him. Well, I forget the exact scenario but that has the same effect. He might have even forgot to put in his bid or something like that.

He had to lay off 32 people. Said it was the worst day of his life, but he had hired that many people for that one customer and basically had to rebuild his business from scratch.

Basically, I’m just saying – This is a brilliant post! Excellent!