Break the Freelancing Feast-or-Famine Cycle

Feelancing is either a feast or a famine. Right?

Wrong. Although this is a common belief, it’s not that hard to break out of the feast-or-famine cycle.

You don’t need to have been in business for years to achieve a more reliable freelancing income stream. You just need to focus on three key components: cashflow, project sourcing, and retainer structures.

If the mention of those words made your brain switch off, then I have bad news for you: you may not be able to avoid the feast-and-famine freelancing hamster wheel. Establishing a reliable and ongoing income does take some conscious effort.

The good news? You don’t need to be a born business mogul to make it happen. All you need to do is be conscious of these goals, and ensure that your approach to building your business actually supports them.

Cashflow

At heart, the feast-or-famine cycle is a cashflow issue: if you had a more regular cashflow, or an ongoing cashflow, you’d always have enough money to live.

So the first step towards getting out of the rut is to get a handle on your spending, and your cashflow. Don’t worry: you don’t need to be an accountant to get this train on the rails (although if you struggle with this stuff, an hour spent with a good accountant would probably be invaluable).

In practice, getting a handle on your cashflow means:

  • knowing what you need to make each week and month to cover your expenses
  • doing everything you can to establish a solid savings buffer so that the end of a project doesn’t bankrupt you immediately
  • keeping an eye on spending and income, to make sure that things are running smoothly: you’re getting sufficient money in the door to cover your costs.

Schedule an hour in the next week to work out what your expenditures are, and what your income for this month looks like. Plan a savings strategy; also, schedule a regular time to review expenditures and pending and outstanding invoices. A half-hour a week might be all you need.

Project sourcing

Next, look at your approach to project sourcing. The feast-or-famine cycle usually arises when you land a project, then need to dedicate all your time to getting it finished by the deadline.

This is a scheduling issue. If you can build time into your weekly schedule for sourcing work, and agree to client deliverables on the basis that you don’t have 40 hours a week to dedicate to their projects, you’ll be better able to smooth out the workflow peaks and troughs.

You might drop this time into your schedule in a couple of blocks each week, or you might allow an hour or so out of each day to source new jobs. Setting this time aside is also a good reminder that you need to make sourcing work a priority. If you get to Thursday and find you’ve only used half of the weekly time allocation for finding new jobs, you’ll know you need to focus on that over the next couple of days.

Retainers

It’s not exactly a newsflash that having clients on retainer is a good way to smooth out the feast-and-famine cycle. A retainer means you can count on a certain amount of work—and income—each week or month. It gives you some stability.

There are two ways you can go about finding retainer arrangements.

The first is to work out a retainer-based offering. To do this, you look at your skills and expertise, and find a way to commoditize them into a package that requires ongoing work to deliver growing value.

The second is to find a client, or clients, who need ongoing services, and put together a retainer package to suit them.

I’ve found the second approach more successful. It’s one thing to look at what you can offer, and conjure a package that reflects the best value you can deliver over time. It’s another to find a need first, and build a specific package from there. When I did this, I found that the package I put together was not one I’d have come up with on my own, for a researched “client type”. It was specifically targeted to the needs of one client, and sold on that basis.

You don’t need numerous clients to make retainers work—you can smooth out the feasts and famines with just one retainer client if you do it right.

How did you do it?

These are the three ways I’ve broken the feast-and-famine cycle of freelancing. But how did you do it? Share your advice with us in the comments.

Image by stock.xchng user JR3.

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  • http://freelancefunnel.com Jeff Schoolcraft

    Totally agree with your sourcing comments, having an efficient daily marketing routine is key to making sure you’re never lacking for leads.

    Follow up is the other half of the equation, client responses to leads sitting in your inbox don’t help you one bit and, like it or not, gives your competition an edge if they beat you in your reply.

  • http://freelancefunnel.com Jeff Schoolcraft

    Too quick on the submit button…

    Consistent efficient marketing on a daily basis and scheduled follow up is a sure way to smooth over the peaks/valleys.

    I actually built Freelance Funnel (http://freelancefunnel.com) to help me with lead collection. One of the biggest nightmares was sifting through job boards of varying quality, figuring out if they were even freelance gigs and keeping track of what I had and hadn’t seen before.

    FF does most of the mind numbing work for you, leaving you to spend even less time just following up on leads that make sense for your business.

    to the mods: I’d be happy to donate a lifetime membership to FF to one of the commenters you randomly select, if you’re interested.

  • http://vastgraphics.com/ Chris Ruggia

    Savings is huge. If you’re not having to chase cash from bill to bill, it makes things way less stressful.

    Stable client relationships is another key element for me. Most of my job satisfaction comes from providing genuine assistance to my clients. If you see them as friends rather than cash hoses and look after their interests, they will keep coming back. It helps that I deal mostly with very small sole proprietors. There’s less money there, but I get the benefit of seeing directly how much they appreciate the value I bring them.

    The diversity of bigger, new jobs (which pay large amounts, with large gaps in between) mixed with piece-work from a decent sized pool of long-term clients (paying small but frequent amounts) goes a long way on the cash flow front. It keeps me juggling every day, but it also keeps me fed.

    • Georgina Laidlaw

      Hey Chris, love your point about “clients as friends”. In fact, I just finished drafting my next post for SitePoint … on that very topic :)

  • http://www.ross.ws/ Michael

    As a freelance web developer, I would be quite interested in Freelance Funnel. I’ve never heard of it before, but it sounds like a time saver.

    @SitePoint: If you decide to run a contest as Jeff mentions, please add me to the list of candidates.

    @Jeff Schoolcraft: Feel free to contact me if you’d be interested in my doing some sort of review of the service.

  • http://www.bordaline.co.uk John Borda

    I’ve started to keep clients on a monthly maintenance basis, so I can be there for them if the unexpected happens (hacker, dispute with hosting co) or just to update any software I might have installed, SEO tweaks… It also shows my clients I’m serious about keeping them long-term, not just do a job and go. As a result, I don’t starve on a bad month! But make sure they go onto standing order- chasing monthly payers is a lot of work if it’s not automated.

  • http://webdesignbusinessbuilder.com Heath Howard

    Jeff, I like your comment about having a daily marketing routine. I think that is important to not be so fixated on your current project that you aren’t bringing in new clients. Developing some kind of sales funnel can help to bring in new leads. I will check out your website that looks promising.

  • Zane Mcdonald

    Whats up with sitepoint these days 11 flashing ads for a tiny article. Makes my head spin and not in a good way.

  • http://www.methodvsmadness.com Paul Foster

    Nice article Georgina, it’s good to see people writing about some unique topics.

    I’ve always found that too many freelancers rely way too much on getting paid by the hour or project and struggle from check to check.

    The answer isn’t working until you can jack your rates up and hire people to do the work for you.
    It’s about generating income that doesn’t rely on you doing anything, eg: referral, affiliates or creating a product you can sell.

  • http://karenshaykubiak.com Karen Kubiak

    Another way I smooth out cashflow is by requiring installment payments on projects over $1,000. Typically 30-50% deposit to get started, then remaining balance split into two payments, deliverable mid-project and at the end. Having 3-5 of these projects going at any one time means pretty steady income… a blessing!

    • Georgina

      Hey Karen, this is a great idea, although I’ve always found that the “mid-project/end-of-project” payment approach can leave you hanging if the client decides to have a go-slow, someone takes leave, etc.

      Of course, your approach could easily be applied to a monthly payment cycle—just ask for a percentage of the payment up-front to secure the contract, then invoice monthly thereafter.

  • http://www.bethzonderman.com Beth

    Good discussion and suggestions. I find the problem is as much cash flow as “time flow.” The economy has been so skittish the past ten years that the impulse is to take every gig that comes for fear of the work drying up. There aren’t enough hours in the day for that, but turn one down and the winning streak ends. I’m not usually superstitious, but I swear it happens – especially with agency work. Anyone else find that?