10 Things to Know (How to Do) If You Want to Be a Freelancer
A Single Service, a Single Customer = NO!
This may seem obvious but it’s worth repeating; as a business owner (which is exactly what you are as a freelancer), selling a single service to a single customer is a huge mistake. And yes, I’m talking to freelancers calling themselves consultants, working 40 hours a week with a unique customer and thinking they hit the jackpot because they earn more than an employee under similar conditions and don’t need to care about marketing, sales, fee negotiations, etc. Except the conditions aren’t the same, and I’d wager the Corona-induced economic hardships and related waves of lays off have made this abundantly clear; a self-employed consultant has no legal protection and will always be first in line when it’s time to cut down on staff expenses.
Always remember you’re running a business and must think in terms of customers, not employment. Anyone in that situation MUST diversify their customer-base, and even the services offered (or even better; offering several products/services in completely different industries and having a clientele that is varied and located all over the world). This is the prerequisite to guarantee income security.
At the very least, no single customer should be allowed to generate more than 50% of your turnover. And the smaller the portion of each customer, the more secure your income. Way beyond that of a regular employee by the way, since you no longer have all your eggs in the same basket, and you have the flexibility to do whatever you want to secure your income instead of depending on the decision of some director.
There will, of course, always be customers that are bigger than others, and depending on opportunities coming your way that imbalance may increase (especially in the beginning, when you should take on most projects that come up, even if they only come from a limited number of sources). What I’m trying to say is that you should always keep an eye on how much of your turnover each of your customer generates, and implement an action plan when some of them become too big. That action plan should, of course, rely primarily on increasing the revenue from other customers/finding new customers rather than decreasing the work you get from your big clients.