How To Survive “The Dip”
“The Dip” happens to everyone sooner or later and learning how to avoid it can single handedly save your freelance career! What is the dip? Well it could mean a couple of things:
1. You have no incoming projects at this time and it may be awhile before you have more
2. You have many projects, none of which are completed, and have no cash coming in within the near future!
Sometimes as freelancers our projects come in waves. We can take on 5 – 10 projects one week but by the time we complete them, we have nothing else lined up! Or quite possibly we have those 5 – 10 projects half-finished and the rest of our income relies on the completion of those projects… all of which could take 2 more weeks! On top of that, we’re broke!
This could spell certain disaster for some freelancers, especially those committed to so many financial strains that just can’t handle a week or more of no income! Learning to avoid this is one skill all freelancers should learn if they want to survive this line of work. Its no joke as I’ve witnessed many freelancers having to abandon they’re entire freelancing career to go back to the steady pay of that other line of work.
If this hasn’t happened to you yet, it will! Even those at the top of their field find themselves in the dip, usually do to poor planning! Below you will find some steps and precautions to take to better avoid this problem.
Plan Your Projects Wisely!
The most obvious solution to this problem is to plan your projects wisely. Instead of accepting 5 projects in one day and giving them all the same turnaround date… tell them you can start their project in X number of days, or next week! Always consult with each client as you don’t want to loose a project either. If they want this started right away then consult with the next client and see what type of rush they are in. You then ask for the deposit on the start date… and you can also get that first project completed faster. This allows certain projects to end in the middle of another project. Here is a simple example of how this situation might work:
Project #1 starts tomorrow
Project #2 starts in 3 days
Project #3 starts 1 week
Tomorrow, you will receive the deposit for project #1. This will give you 3 days of work which will get it (wishfully) 50% complete. At that time you will be taking on project #2, and receiving the deposit from project #2 in the middle of project #1. By the time your 50% complete with project #2, you can also be complete with project #1 and receiving the income from that. Then you will beginning project #3, and half way through that project you could be complete with project #2… and so on…
Of course all your projects might not all take the same amount of time depending on the individual complexity of each project… but hopefully this dumbed down example will give you the general idea.
For some people this happens naturally, and for others it happens all in one week or even one day! If you are the latter then simply plan out your workload the best you can. This will space out your work, your income, and possibly your referrals from other clients. Which might be the beginning of steady work, not work overload!
Start a Partnership!
This might not be the most obvious choice but this is an ingenues way to get more steady clients. By starting a partnership with another freelancer in your field you will gain more clients… and even if they are shared clients where you only get 50% of the income from that project… you are still only doing half of the work! Refer to the Vinn diagram below for a visual representation:
This is how many legitimate design firms get started. You have your personal freelancing business driven by your online portfolio, your partner has the same. You work together and create a new service based on a partnership. Each client you get from your partnership is a new client all together and more income for you (as well as your partner!).
Diversify your income!
As a freelancer your income is probably not the most steady or predictable thing in the world. You will most likely find yourself in a financial dip sometime in your freelancing career… maybe more often then you might want to admit! I will tell you what I tell every beginning freelancer… diversify!!
Do not rely only on your main product or service! Learn to create passive income. It may not start out as much but it will build up steadily in most cases. You can accomplish this is any number of ways. Many popular options are:
1. Selling Stock Photography
2. Selling Ads on one or all of your websites
3. Affiliate Marketing
4. Sell your “scrap” work online
5. Write and Sell an ebook
And so on… all of these would provide income that might be on a much more constant flow. Some of these might provide surprising results over time. Many people have made thousands monthly by selling their ebooks. The best part about it all, is you don’t have to leave your couch to do so!
Use a different payment system!
First of all, if you are not requiring a deposit on all of your client projects (what are you thinking???) then its time to start right… NOW. If you do however require a deposit but still find yourself broke before you’re even half way complete then its time to set up a different payment / deposit system.
For example, you require 50% up front, and 50% when complete. You do this religiously but somehow you’ve spent the money before you’re anywhere near complete! First off, you need not spend their deposit before you know they’re satisfied with your work 100% (what if they want their money back??) but if you are positive that they are, then you are in need of reconfiguring the way the client pays you.
Instead of 50% up front, you can also request 25% up front, 25% when half way complete, and then the last 50% when the project is complete. This will not only give you more constant income on this project and maybe teach you how to handle cash flow, but it might also provide you with more motivation to get the project complete!
This can also be configured other ways. Some clients have no problem paying weekly, or setting shorter milestones (10% every time they see enough progress) but consult with the client first! Usually they are more then happy to do so but some might have restrictions of their own!
Have any more ideas?
Know something I don’t? Let me know and leave a comment!