Freelancing. That’s the life, isn’t it? Total control. Total freedom. Abject terror.
Don’t get me wrong. There’s a lot to be said for the freelance life. You’re in charge of your own time. You pick and choose the projects you’ll take on. You select your clients.
When it’s all working the way it’s supposed to, that is.
When you’re not breaking into a sweat as you open your checking account statement. When you’re not wondering how you’ll pay next month’s rent. When you’re not thinking, “Maybe a job with a salary wouldn’t be so bad …”
There’s a simple solution, though. One that will restore a feeling of stability to your freelance life.
It’s nothing you haven’t heard before. But you may not realize how important this solution can be for your freelance business. You may not be taking full advantage of the peace of mind and regular income it can provide.
Let’s get it working for you.
How to build an income foundation for your business
The solution to a freelancer’s unstable income problem is to take on a handful of retainer clients. Retainer clients pay you a set amount every month, and they provide a steady income you can count on. There are several ways to negotiate a retainer agreement, and we’ll cover them in this article.
For a freelancer, retainer clients are the closest thing to the stable income a salary provides.
The reliable income retainer clients provide is great, but if you don’t specify exactly what their retainer payments cover, you may find yourself selling your time for cheaper than you should.
Here’s what to aim for and what to avoid.
Why retainers rock (and why they sometimes suck)
Retainer clients have massive advantages:
- They provide a set income you can count on.
- You don’t have to spend as much time in the networking-prospecting-qualifying-selling cycle.
- Admin tasks are reduced because they’re predictable.
And there are some important retainer client minefields you should be aware of:
- You are “stuck” with your retainer clients: they’ve bought your time and you have to deliver on whatever they ask you to do (like it or not).
- Your projects may suffer from scope creep: clients feel a sense of ownership toward your time and may try to sneak in a few extra tasks here and there.
One way to minimize the risk associated with beginning a retainer relationship with a new client is to do a few “test projects” to see how you like working with them. These test projects would be one-off jobs you bid on, complete, and invoice individually.
As you work with the client, ask yourself:
- Is this client clear about her expectations?
- Does she understand the value my work contributes to her project?
- Is she easy to communicate with? Does she return my calls or emails?
- Does she pay on time?
Treat these one-off projects as a vetting process you’re putting the client through. When you find those client “gems” who are easy to work with, appreciate your contributions, and have ongoing projects, think about moving them to a retainer relationship.
How to protect your time, energy, and income with retainer clients
There are two primary ways to structure a retainer relationship.
The “Reserve Your Time” Retainer
- You’re paid a set amount for a specified number of hours that you reserve for that client every month.
- To make this attractive, you can offer your hours at a savings (but you don’t have to).
- Hours aren’t carried over to a new month: the client starts with a fresh chunk of your time each month.
Clients with ongoing needs like content creation, website maintenance, or social media management can be ideal for this type of retainer arrangement. You — the freelancer — need to find a way to carefully track the time you spend on the client’s work.
A note of caution: Be careful not to overbook your time. If you have several retainer clients who reserve your time and don’t use it fully, you may be tempted to book an extra client since you “always have time left over.” But if all your clients show up with heavy loads of work at the same time, you may find you don’t have the bandwidth to meet your commitments to them.
Solve this issue by either not overbooking your time or having a stable of reliable freelancer colleagues you can outsource the extra work to.
The “Handle These Ongoing Projects” Retainer
- Writers or professional content strategists can provide a set amount of content each month: for example, four blog posts, two email newsletters, two emails added to an autoresponder series.
- Designers may commit to handling specific ongoing design needs: website graphics, print material design, social media graphics.
Some freelancers prefer to handle specific projects and take their clients “off the clock.” This can be freeing: if you are able to get their project done in less time, all the time you save is your own.
This type of retainer relationship works best when you really know the client, their working style, and the projects they give you. When you can predict how much time it will take you to do their work consistently, you can take them off the clock and focus on delivering a result for a set fee.
2 easy ways to make retainer proposals irresistible
One easy way to make a retainer proposal extra attractive is to guarantee a set amount of time for a lower-than-usual hourly rate. The lower rate is only available if the client purchases the full block of your time for the month. And remember, hours don’t carry over from one month to the next.
Your normal hourly rate is $125/hour. Your retainer client asks for 20 hours/month of your time. Twenty hours of your time would normally be $2,500. For clients who pay you on a retainer basis, you can sell this time for $2,000, effectively reducing your hourly rate to $100/hour.
To protect yourself, ask the client to commit to a set period of time for the retainer relationship — perhaps six months. That will help you avoid clients who view your offer as a way to get one month’s worth of work for less.
Another way to make retainer agreements attractive is to bill on a quarterly — or even annual — basis.
I once had a client who had to jump through all sorts of administrative hoops when a vendor’s invoice was submitted. I suggested billing my retainer once per quarter so he’d only have to request four checks a year rather than twelve. He was thrilled, and it saved me administrative time, too.
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Share your retainer tips in the comments
If you have structured your freelance business to use retainers, please visit the comments below. I want to hear about:
- How you first proposed a retainer
- Both the positive and negative aspects of retainer clients
- Whether you still use retainers today
Let’s talk! Scroll down and share your thoughts.
The post A Simple Way Out of Your Precarious Freelance Income Problem appeared first on Copyblogger.