In common with most freelancers and entrepreneurs, I’m a risk-taker.
It’s risky to run your own business. It’s risky when you have bills to pay, but no guarantee that you will be picking up new projects next month.
But that’s the nature of being a freelance writer or copywriter.
We take risks because we like the freelance lifestyle, and because we hope to earn more than we would as an employee.
But…
I am also very, very careful and cautious when it comes to balancing my sources of income. I’m probably right up there at the edge of being paranoid. As soon as one client looks like accounting for more than 25% of my total income, I grow nervous.
Why? Because if I lose that client, my income drops by 25%.
So I make sure that my freelance copywriting income is spread across a number of different clients.
This doesn’t mean I look for a lot of small clients. I don’t. Dealing with too many small clients is a very inefficient use of my time. I find myself spending too many unbilled hours on administration.
So I aim to have four or five good-size clients.
In addition, I don’t put all my income in the “freelance copywriting” basket. I also publish and sell information products. I have a coaching business. I make some money through affiliate relationships.
In other words, I maximize my income and minimize my risks by ensuring that my income is flowing in through multiple sources.
If one source of income slows or fails, the impact on my total income is not significant.
This approach makes perfect sense to me.
But it isn’t how everyone works.
The more coaching work I do, the more freelancers I encounter who depend on just one or two clients for the bulk of their income.
That would scare me half to death.
When most of your income is coming from a single client relationship, you’re not really a freelancer at all. You’re simply an employee working from your home, with no benefits.
I can see and understand the temptation.
When a company comes to you with a huge volume of work, it’s tempting to say yes. You get a ton of work from a single source, you don’t have to worry about finding new clients and projects each month, and you spend very little unbilled time on administration.
But you also put yourself at enormous risk.
If you lose that one client, your business fails.
This is why I always advise freelancers to spread their risk by working with multiple clients, even if it means saying no to one client.
One of the key skills to running a successful freelance business is to manage your risks.
Depending on just one or two large clients is just too risky.
NOTE: If you are risking your own freelance business because you have too few clients or streams of income, talk to me about my coaching service. I will help you achieve a better balance in your business, reducing your risks and increasing your opportunities for growth.