Ah, the feast or famine cycle. Freelancers around the globe are all too familiar with the ebbs and flows that can come with the contractor lifestyle. One minute you’re drowning in work and the next you’re scrounging for anything to help bring in a little cash.
If you’re a digital nomad, a freelancer, or a contractor of any kind that struggles with the feast or famine cycle from month to month, you’re not alone. Fortunately, you also don’t have to surrender to the whims of your clients in order to keep your work steady and your income predictable.
Here are a few tips and tricks to help you break out of that nasty cycle and find a new level of comfort and success with your freelance work.
Adjust Your Expectations
The first thing to do, before you begin strategizing or changing your business tactics, is check your expectations. If you’re freelancing with the desire to bring in a predictable full-time income, you’re going to be severely disappointed. No matter how successful you are, your pay won’t look quite like a traditional 9 to 5 paycheck — and that’s okay.
Getting funky paydays is part of the flexible nature of freelance work. It’s part and parcel of the lifestyle itself. That’s why it’s crucial that you begin the process by setting proper expectations.
Make sure that you truly understand that, no matter how well you can improve the consistency of your paycheck, it will never match a typical full-time payroll operation. Knowing this frees you up to focus on finding the best form of compensation that fits your particular needs.
Separate Your Business and Personal Expenses
Next up, take some time to tend to some logistical items. Freelancers often find it all too easy to combine their personal and professional finances as they go along. You may not start that way, but as your clients come and go, your income fluctuates, and you begin to get paid in a plethora of different formats, you can quickly lose track of what’s personal and what’s business.
This makes it that much harder to truly bring a sense of constancy to your personal payroll endeavors. Instead, take some time to invest in separating your business and personal activities. This can be as simple as opening up two separate bank accounts so that you can track what your business makes and what you pay yourself.
If you want to get more serious, you can also incorporate your solopreneurship — i.e. create an LLC or an S corp. This way your freelancing is legally done under a different entity and is isolated from your personal life.
Live Below Your Means
This other bit of housekeeping has to do with your personal finances. If you always live based on what’s in your checking account, you’re going to run into feast or famine issues on a regular basis.
Instead, it’s wise to do your best to live below the threshold of income you know you can make. For example, if you’re a freelance writer and you know you can make around $60,000 a year, try to live on $45,000 instead.
That means, when you go to create your budget, you should operate under the mentality that you have $3,750 per month to work with instead of a full $5,000. This may feel unnecessary, but it ensures you’ll be okay, even if some of your work falls through. It also means that if you bring in $5,000 a month for the first three months of the year and then bring in nothing for the fourth month, you’ll still have enough to cover your basic budget in all four months.
Set Up Lines of Emergency Funding
The biggest issue with a feast or famine situation is often treating the famine as the only problem. The truth is, though, often it’s the feasting periods of time that are just as difficult to manage.
This is why you want to use times when things are flush to create an emergency funding plan for when finances dry up down the road. There are many ways that you can set up safety nets while things are financially solid, such as:
Saving up an emergency fund to help bridge the gap during times of drought.
Setting up a HELOC or other line of credit that you can tap into if you’re short of cash.
Finding activities like other freelancing gigs, mowing the neighbors’ lawns, or even having a yard sale when things are slow.
However you do it, always do your best to set up safety measures when things are going well.
Put a Premium on the Right Clients
It’s hard to find good clients. That’s why, when you do find them, you want to put a premium on them. Every freelancing activity and each freelancer has their own preferences and ideal scenarios. Nevertheless, a few factors that quality clients tend to share include:
They provide a steady flow of work.
They are invested in you and treat you as part of the team.
They want to collaborate with you rather than merely offload unwanted work.
They pay well and on time.
It’s important to identify your top clients and then do your best to preserve those relationships. Prioritize them and go above and beyond to keep them happy.
If you don’t have enough quality clients, don’t sit on your hands waiting for things to get desperate before you start looking. If you want stability as a freelancer, you have to act like a shark. Never stop moving. Even when things are solid, try to quietly, steadily, and confidently stay on the lookout for new clients.
Be Consistent on Your End, Too
Along with looking for quality clients, it’s important that you operate as a quality freelancer. If you offer a subpar or inconsistent amount of work, it’s difficult to expect clients to keep you around. This can lead to a higher turnover rate, which only exacerbates that feast or famine cycle.
If you want to avoid time spent panicking as you look for new clients, always make sure to put your best foot forward. Obviously, work to prioritize your best clients, but make sure that you deliver spectacularly for everyone you work with. This can improve your personal brand and professional reputation. It can also help generate more referrals. Both of these can help you maintain consistent work.
It’s the job of a business to keep its freelancers happy. But it’s just as important for freelancers to keep their businesses happy as well. Make sure to invest in developing long-term relationships and becoming a part of your client’s success. Be communicative, upfront, and honest. Always invoice on time. If you can do that, you can create happy clients that want to funnel as much steady work as possible to you and who will be willing to work with you on deadlines when things get tight.
Finding Financial Stability as a Freelancer
Freelancing is infamous for its instability. But that doesn’t have to be the case. If you’re proactive, smart, and diligent, you can create a solid system that doesn’t fluctuate along with your workload.
So consider your current setup and identify where things can improve. Then take steps to address those areas as soon as possible in the name of a solid, stress-free freelancing future.