For many freelancers, there are already many factors to juggle to keep the bills paid every month. You have to manage your time, schedule your jobs, chase after new ones, and, at the same time, try to manage the work-life balance. You could, theoretically, just work all the time, and build up that nest egg, but would be courting disaster for your health and sanity in the long run.
That’s why for many freelancers, it’s understandable why getting in some bigger, regular clients is always a relief. When you have someone that likes your work, pays a decent amount, and keeps coming back, that brings in some of the stability that salaried employees take for granted in exchange for their “freedom.”
However, there’s a real risk here, and it’s one that no freelancer likes to think about, but must always keep in the back of their minds. That reliance on a big client might not last. All freelancers should keep an eye out for these warning signs:
If a formerly diligent client is now, regularly, having trouble keeping up with payments, this should raise a red flag. One of the first signs of a business in trouble is that they start folding in their financial resources, in an attempt to stave off the bleeding, and outside vendors—like freelancers—are usually the first to feel the pinch.
It’s one thing if a business has an off month, and they trip on you once or twice. It’s a big warning that things may be trouble if they are falling behind more and more.
A New Department Head Comes In
This might be one of the reasons you quit a salaried job in the first place, but when a new manager moves into a department, it’s not unusual to start “marking territory” by cleaning up the house, necessary or not. Sometimes new department heads will already have their preferred team or vendor, and to make sure that everyone knows this is a new “dynasty” in the managerial empire, leftovers from previous management—such as regular freelancers—will be phased out.
Hiring Starts Up
If the big client you work for goes on a hiring spree, that can be very good. Unless the hiring spree is for the service you are providing, in which case that should be a loud siren to you that you may be redundant soon. Sometimes you can do too good a job, and help a company grow to the point where they find it cheaper to bring your services in-house, but rather than hire you, they bring in someone else.
Try To Diversify
The best thing freelancers can do, as troublesome as it may appear on the surface, is making an effort to not rely too much on a big client or two. If you find that over 60% of your income, for example, is all just one client, that puts you in a very vulnerable situation if your services are no longer required.
If you’d like to know more about how you can keep your freelance business resilient and agile, we can help. Just contact the Smart Business Doctor LLC, and we can help to keep you in the black every month.