November 1 marks my two-year anniversary as a freelancer. Well, technically. See, I also freelanced for 7 years prior to this, but I took a day job in-between those self-employed stints, so this is more like my freelance sequel.
My first year back on my own was fun, but challenging. Despite having done this all before, I still found myself making a lot of the same mistakes I did the first time around.
But wait… didn’t I know better?
Wasn’t I older, wiser, and better prepared?
Yes, maybe, and evidently not.
If old habits die hard, and bad habits die ugly, then bad old habits are like the villains in horror franchises — every time you think you’ve killed them for good, they show up again to wreak more havoc on your idyllic new life. This means you (and I) have to work even harder to overcome them and establish positive habits while racing one step ahead of our own worst instincts.
In the spirit of all those common sense tropes that help you survive a horror film — like “don’t split up,” “don’t investigate that weird noise,” and “never say I’ll be right back” — here are six seemingly obvious freelance survival lessons that became even more true during my second year of working for myself.
Don’t Go Alone
Yes, you’re a freelancer… but that doesn’t mean you actually have to do everything alone.
When you’re self-employed, you’re a one-person business in charge of marketing, sales, execution, delivery, and customer support. That’s a lot of pressure, and it can feel like you’re isolated. You also don’t want to seem like you’re cracking under that pressure, so you put on a brave face and convince everyone you meet that you’re on top of the world… when really you may be paddling furiously just to stay afloat.
You know who else feels that way?
Every other freelancer and entrepreneur out there. (And lots of full-time salaried employees, too. But at least they have the security of a guaranteed check every two weeks, which you sacrificed for “freedom.” Ah, bravery…)
The good news is: not only are you not alone in this struggle, but you’re actually stronger together.
Find fellow freelancers who offer services that are complementary to yours. If you’re a designer, make friends with programmers, writers, PR pros, consultants, etc. That way, every time you meet someone else who has a problem, you’ll be able to recommend someone you know as a possible solution. If that problem is big enough, you may be able to pitch an entire team project.
And if you’re each looking out for each other, that’s like having a dozen sources of new business for your services instead of just relying on your own individual ability to make contacts and sell yourself.
This is huge, because…
Referrals Are Everything
I’ve said this before, but it bears repeating: your network is the key to your future.
The new clients I picked up this year all came to me as referrals from clients (current or past) who liked working with me and who believed I could help someone they knew get better at doing what they loved.
If these people hadn’t enjoyed their experience of working with me, and if they hadn’t seen positive results, they wouldn’t have felt confident referring me to their colleagues. A referral is all about trust: the person doing the referring trusts you, and the person they’re talking to trusts them. This puts the referrer in a vulnerable position, because if you don’t deliver, that could affect your referrer’s relationship with the person they recommended you to. So when you’re following up on a referral, you’re not only trying to deliver good business results but you’re also trying to ensure that the person who referred you doesn’t look like a bad judge of character for having done so.
Referrals are vital, so don’t screw them up.
Now, here’s the twist: every future referral begins with the job you’re doing now.
If your clients are happy with you now, they’ll tell other people about you later. This means your current work generates future work, which is good because you can’t spend all day searching for new work or you’ll starve. The less time you have to spend finding new work, the more time you can spend delivering results and delighting clients — which leads to more referrals.
Don’t Budget Against Phantom Invoices
When you’re a freelancer, nothing is guaranteed.
Earlier this year, I picked up a new client through an agency I work with. The relationship was working well. The client even contacted the agency to tell them how happy they were that we’d been connected, and that they loved my work.
One month later, that same client cancelled the contract.
It had nothing to do with me, or with the agency. The client just decided they didn’t want to be in business anymore. They saw the work we were doing together, they saw the benefits, and they saw all the steps involved in getting from here to there… and they realized this wasn’t a life they wanted to pursue after all.
All of a sudden, my monthly budget looked a lot more sparse.
Luckily, I hasn’t made any expensive plans that relied on this recurring revenue stream. But that’s the point: when your entire income is based on the presumption of future work, your entire future is written in pencil. (Not that everyone’s isn’t, but that’s a philosophical discussion for another post.)
Which leads us to another mathematical principle of freelance survival:
Diversify Your Revenue Streams
If you only have one client, you’re not a freelancer; you’re an uninsured employee whose financial eggs are all in one very uncontrollable basket. And that’s terrifying.
The more clients you have, and the less you rely on any one of them for your livelihood, the more insulation you have against losing any client at any time.
If any single client is responsible for more than 40% of your income, your red flags should be flying. That’s a sign that you’re over-relying on a golden goose who could fly away at any moment.
Ideally, you should have at least one more client or contract than you need to make a living. That bonus job is your sanity buffer. By all means, take on even more jobs if you can, and if you want to. Just don’t take on such a high volume of work that the quality of your output suffers. If you do, your clients are going to notice — and there go your future referrals.
Speaking of time…
Don’t Rely on Hourly Work
Billing hourly will be the death of your sanity, your spirit, or both.
You’re not running an assembly line where your output is identical from hour to hour. If you were, that would establish a direct correlation between your time and your value to the company. But you’re not making widgets; you’re a specialist who’s solving complex problems for clients who need an expert to figure them out.
As such, not every aspect of the work you do will be identical in complexity, difficulty, or the time it takes to execute it well. In addition, you can solve some complicated problems more easily than others simply because you have past experience in that particular scenario. Why should you earn less money because your expertise helps you accomplish your work faster? That makes zero sense. Why would you ever charge as though your time is a generic commodity?
When you do that, you’re in a race to the bottom with other freelancers who are willing to charge juuuuust a little less in order to land more work. And while you don’t want to fight for clients whose main concern is saving a few dollars, you’re going to lose work this way, and those losses are going to make you think you’re doing something wrong.
Stop thinking of yourself as a machine instead of a person.
Instead, structure your pricing based on projects instead of hours. When you do this, you’re asking your clients to invest in the results you deliver, not in the tally of individual hours that go into executing the associated tasks.
And speaking of execution…
It’s All About Your Process (or Lack Thereof)
The way you spend your time will determine whether you float, sink, or swim. (This is true not just in freelance, but in life.)
If you spend too much time actually working, you won’t be able to spend time networking and expanding your circle of potential clients and collaborators.
If you take on projects that require a lot of problem-solving and learning new techniques in order to deliver results, the time you spend on those projects will balloon well beyond your expected scope.
If you sign retainer contracts for a fixed price, be conscious of how many hours those gigs are adding up to each month. Track your time and make sure you’re not spending so much time on a flat fee that it translates to a laughable hourly rate.
Perhaps most importantly, make sure you’re scheduling time for yourself to do all the intangible things that make you a valuable freelancer in the first place: time to learn, time to experiment, time to practice and hone your skills, and time to take care of yourself mentally and physically so you don’t burn out.
When you’re a freelancer, there are no sick days and no golden parachutes. You must see your time as your most precious resource, and then act in such a way that you can maximize the value you derive from each hour you spend working.
The better you get at this over time, the fewer hours you’ll need to spend working and the more hours you can spend living and enjoying this new life you built for yourself.
And isn’t that the whole reason you set yourself free in the first place?
If You Liked This Post
… then you may also enjoy this post about 5 freelances mistakes to avoid, or this post about why a traditional career path just doesn’t work anymore.
1 Comment
Genuine Jobs · November 3, 2016 at 6:09 pm
My God, I am pretty much guilty of almost all of these bad habits and I still haven’t got rid of some of them, like relying too much on phantom invoices, those can be really dangerous for your budget (and finances too)!