For all freelancers, the famine and feast cycle is a fact of life – or is it? You can take more control of the ebb and flow of your income if you make changes to how you run your business and, take steps to alter how you approach the relationships you have with your clients.
One of the questions I get asked the most often particularly by new freelancers is how to mitigate the famine and feast income cycle many freelancers suffer from.
The erratic income that has become the norm across the freelance community can be challenging to cope with. The good news is with some simple techniques you can reduce your famine and feast cycle and, begin to enjoy a much more reliable and regular income – yet still maintain the freedoms you want as a freelancer.
Freelancing has been moving through a testing period: According to the ONS (Office of National Statistics), almost a quarter of a million people in the UK have given up their ‘freelancer dream’ during the lockdown. Between April and June, there were 4.76 million self-employed people (14.5% of all people in employment), a record 238,000 fewer than the previous quarter.
As the world moves out of lockdown and new ways of working come into focus across a post-COVID-19 business landscape, the use of freelancer will increase once again. May employed workers will also move into freelancing for the first time, either because of necessity or, to fulfil an ambition to take more control over their working lives.
Payments across the freelance industry no matter which sector you work in has often come under fire as one of the most contentious issues established and new freelancers face. Late payments remain the scourge of the industry. According to the FSB (Federation of Small Businesses), The majority of small businesses (62%) have been subject to late or frozen payments in the wake of the COVID-19 outbreak, according to FSB’s latest study of more than 4,000 firms.
COVID-19 notwithstanding, can we take more control of our cash flow and reduce the impact of late payments and irregular payment cycles that have dogged freelancers for decades?
Speaking to several freelancers about the famine and feast cycle, the mechanisms and processes in use can be adopted by anyone. PR consultant, Stephanie Staszko, who has been freelance for 18 months advises:
“Accepting that peaks and troughs is to be expected with freelancing has actually helped me to mitigate the effects of feast and famine. This means that when I am going through a ‘feast’ period I save hard to cover potential future shortfall. Also, panicking during a famine period can cause you to start pitching for and accepting work for projects out of desperation. This is one of the worst things you can do as a freelancer.”
Stephanie continued: “You’re likely to compromise on your day rate, perhaps even accept a project you’re not completely comfortable with. Although at the time any old work might seem like a lifeline, it can be detrimental in the long run because you’ve committed to completing that project and may have to turn down more suitable, well-paid work. This ties into my saving money recommendation, because you’re less likely to panic during a famine period if your bank account looks healthy!”
Having a wide spread of clients is also the key to reducing the impact a famine period can have on your income. Try and spread your client base as wide as you can. Having too few clients can place your overall income in jeopardy. Having just one large client that pays well can seem ideal, but if that contract were to end abruptly – and it will at some point in the future – your income will be severely hit. Losing one client of several lessens the blow to your business and income.
“I’ve always thought freelancing is a bit like being a caveman (or woman),” says Julie Thompson Dredge, Founder, Frame PR. “When you wake up there is often no food and it is up to you to go and get it! And even if you have lucrative projects or good retained clients already, you’ll always have that ‘caveman mentality’ in your head which spurs you on to finding work for the months ahead.”
Being a freelancer will always have a level of unpredictability. Don’t see this as a disadvantage, but as a spur to ensure you are marketing and pitching your services every day. In a post-COVID economy, the mantra ‘content is king’ will be even more relevant than it is today.
Many freelancers lament the steady income employment bought them. But you don’t have to give this up and resign yourself to the inevitable famine and feast cycle to reap the rewards that the freelancing life delivers to you.
Fiona Thomas, author of Out of Office: Ditch the 9-5 and be your Own Boss, offers her advice: “I’ve consciously stepped away from one-to-one client work as it’s not particularly scalable. I began exchanging my time for an hourly rate, but that’s not a sustainable approach. Instead, I’ve started teaching online courses and webinars which can have unlimited attendees. This means I put in the same amount of work increase my revenue by selling more places. This has proved to be a really simple way for me bank some money to keep me going for a few months. I’ve only been able to do this after years of building up a loyal audience on Instagram, so having that platform to sell to has been a huge factor in my success.”
Moving your clients to retainer-based work and diversifying your income streams are proven techniques to reduce the impact that the famine and feast cycle can have on your cash flow.
Commenting, Lianne Robinson, a freelance content strategist told me: “Over the years I’ve also tried to move my clients onto a regular monthly retainer fee rather than just paying for projects. I’m lucky in my industry, my work with clients tends to be ongoing in one way or another so by agreeing a monthly fee we all know where we are.”
And Fiona Thomas concluded: “My advice would be to never stop marketing your services, especially when you’re in the ‘feast’ stage of the cycle. Build a loyal audience on social media or via an email list and you’ll have a group of people who are familiar with your services and interested in working with you.
“This means that when you naturally approach the ‘famine’ stage of the cycle you can start taking on new clients again without starting from scratch. Finding retainer work is another great way to create a more stable income, as is selling digital products like eBooks or courses. These can be sold repeatedly without much heavy lifting which can help give you additional income during those quieter spells.”
Follow these steps to create your own famine and feast vaccine:
- Never stop marketing your services
Even when you have a full order book, you must keep pitching. Freelancers that suffer from long periods of famine can trace this back to a lack of marketing during their last feast period. Have a pitching schedule to keep in touch with existing clients and to find a steady stream of new ones.
- Develop new revenue streams
Look closely at the customers you serve. Ask yourself what other services or products they would be interested in buying. Look at the challenges and pressure points they are feeling and, create products or services to relieve that stress. These evergreen services are a core component of reducing your famine and feast cycle.
- Move from time-based single job working
Many single, one-time jobs often characterise freelancing. Try and move your regular clients to a retainer-based payment model. This ensures your income is more reliable and stable, plus it provides your clients know precisely what they are buying from you and can budget accordingly.
- Save when you can
As Stephanie advises, when you are in a feast period, try and put as much cash aside as you can afford. Over time, this builds up contingency fund you can draw upon in times of famine. Look at the regular financial commitments you have to give you an indication of how much you need to save.
- Remember you can say no
In times of famine, it’s easy to take on any work to gain any income. However, try to remember the work you do is a reflection of you as a freelancer and your business. Jobs that are not a good fit may be outside of your comfort zone and lead to anxiety. Saying no is a powerful validation of your belief in your abilities.
Don’t forget why you are a freelancer. During a period of famine, it can be difficult to keep the faith. Just as a surfer rides a wave before crashing, try and remember the advantages you benefit from as a freelancer. The famine and feast cycle is a fact of freelance life, but one that does not define you or your freelance career.