No one prepared me for how it felt to go through the dreaded earnings lull as a freelancer. I’d heard about it from other freelancers and thought that I understood what could happen when your projects slowed down-but until you actually experience an earnings lull you have no idea. No idea of the uncertainty that comes with freelancing, how to manage it and the importance of managing your freelancing workflow so that you can avoid (as much as possible) experiencing the stress that earnings lulls bring. I’m going to specifically talk about freelance writing but we could be talking about any freelancing area of focus.
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Why Earnings Lulls are Important
I bet you didn’t expect me to start from this angle. Hear me out. It’s really important for freelancers to experience a lull or two in their business because it gives them the opportunity to do a few of the following things.
- Reevaluate whether or not freelance work is right for them-Nothing like having no customers or cash coming in to make a person question everything that they’re doing.
- Get a feel for the seasonality of the content that you’re creating-As a freelance writer who focuses heavily on personal finance content there are times of year where that content is NOT in demand. The demand for saving money content (for example) drops quite a bit during the holiday season-people want to spend their money on gifts and experiences. Maybe they are looking for tips on how to find deals, but that’s not what I write about. Knowing the seasonality of the content that you create can help you plan better.
- Review your finances-Earnings lulls force you to reevaluate your income. You will end up asking yourself (hopefully) a number of really important questions.
- Are you earning enough?
- Do you have enough clients?
- What is the average pay per project that you’re looking for?
- Should you diversify the content verticals that you’re writing in?
- Is your emergency fund substantial enough?
- Have you accidentally tipped your earnings to one main client vs. many? What happens if you lose that main client?
- Do you have systems in place to bring in money quickly?
- Do you have diversified income streams? Even as a freelancer?
- A side-hustle-yes, I said what I said. A side-hustle which can be a powerful way to help you work on projects that grow your portfolio without harming your income.
- Running workshops or 1 hour webinars that cover a specific topic of interest that you cover. You would get paid to do that.
- Creating unique content that others would pay for or sponsor.
Earnings lulls should have you questioning everything about how you’re running your freelancing business. Recently, I meetup virtually with some high earning freelancer friends and they confirmed what I’d been thinking for awhile in observing conversations around the internet, etc. that freelancers were having about their business.
Most freelancers don’t have enough clients.
So, I thought I would share some of the strategies that my friends shared with me and a few other people and I hope that this will help to manage and avoid the earnings lull.
5 Strategies to Avoid Earnings Lulls
- Always be pitching-Think of pitching as planting seeds for future work vs. a stressful thing to do. The more you pitch, the more you build a resilience around the idea of being rejected, etc. You likely need fewer “yeses” to get you to your financial goals than you think. Set aside 2-3 hours a week on the same day for pitching. It’s just a regular part of your schedule.
- Diversify your writing niches-I write in 4 different content niches. This helps keep me engaged intellectually, smooths out the lulls that happen throughout the year. When one area of content isn’t in demand, typically another one is.
- Set your payment terms-I do not work on projects that pay beyond net30. The only way I would say “yes” to a project that pays outside of those terms is if I’m contracted on a one time unique project that I have decided would be great for my portfolio. I check the payment terms before moving forward. But, as a rule, I avoid any projects that pay outside of Net30 payment terms. It’s too annoying to keep track of and makes it harder to generate predictable income.
- Work with companies that have clear payment processes-I’ve been very lucky to work with organizations that have established best practices when working with freelancers. What this means is that I’m always paid on time. You should be able to figure this out right away.
- Does the organization pay via direct deposit?
- Does the company pay upon completion?
- Work with a larger number of clients but with a per client maximum-What am I saying here? You want to avoid having one client accidentally become your primary customer. You avoid this because if you lose that client you will have problems and could lose your business. If you have 5 clients and each one you work with on a maximum of 2-6 projects a month and then are pitching weekly to add in new clients, then if you lose a client, you’ll be fine. If you allow a client to become THE client-they have all the power in your business relationship
3 Bonus Tips
- Always spend time evaluating your business. Even if it’s once a quarter.
- Build in raises by adding in new clients that pay more. I literally quiet fade from old clients by not pitching for new projects if they don’t pay enough. I had one very well known client that everyone has heard of in the financial space. They are easy to write for BUT they were only paying $250 a post. Yes, it was easy work. But, I would rather phase in a project that pays $400 a piece. So, that’s what I did. Very rarely do I raise rates on my clients. Either they raise the rates or I just replace them. It’s business.
- Diversify Your Income-I make money in a number of different ways. Having income come in that is separate from freelancing has been HUGE. Income diversification has taken a lot of the pressure off of me and allowed me to step away from bad clients faster, pause working on projects throughout the year and be a lot pickier about what I say “yes” to in my business.
At the end of the day, I’m pushing freelancers, including myself, to be a lot more proactive behind the scenes in their businesses. Don’t just let things happen. Ask the following questions at the end of each week:
- What actions did I take to bring in cash into my business?
- How can I work more efficiently?
- Where do I work best from? I typically need to be away from home in order to do my best work. So, I go to co-working spaces or a coffee shop to get things done.
- What’s a distraction and how do I avoid them.
- What are the numbers behind the scenes of my business? Pay per word, pay per project and average hourly pay when you break the numbers down.
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