As the old saying goes, “Don’t put all your eggs in one basket.” That is as true in business as it is in life.
For freelance web designers, this means not depending too much on one client or project. Doing so is dangerous. If something unexpected happens, you could find yourself without a major source of income.
The reality is that clients will come and go. And while losing a client could cost you significant income, the goal is to be able to survive and move on.
With that, it’s important to diversify your client roster and sources of income. This will help prevent a difficult situation from becoming a disastrous one. Your ability to stay in business may depend on it.
Thankfully there are many ways to distribute those proverbial eggs into multiple baskets. Let’s explore some ideas to help strengthen your web design business.
Find Out Where You Are Most Vulnerable
To get started, look at the big picture. How is your business doing? What are your sources of income?
Since you are likely to keep track of income for tax purposes, this information should be readily available. And it can tell you a lot about where you stand in terms of diversity.
For example, if you see that the majority of your cash flow is from one client – that should set off alarm bells. That’s not to say you shouldn’t have big clients. But if that gig suddenly went away, where would it leave you?
The importance of some clients will be clear. But you might be surprised at how much a particular project means to your bottom line. That’s why it’s worth taking the time to consider where your money is coming from.
The more information you have, the better you can prepare for an uncertain future.
Look for Opportunities to Increase Income Diversity
Now that you have an awareness of any clients that make up a disproportionate chunk of income, you can do something about it. However, the path you choose is a personal one.
It depends on what your goals are and the type of business you want to run. If you want to stay within the same niche, marketing to more potential clients may be the answer. Booking a few new projects could provide the balance you need.
But what if you don’t have enough time to take on new clients? This is a common problem with freelancing. We are limited in terms of time and resources. Therefore, adding to our to-do is not an effective solution.
In that case, recurring sources of income might be the answer. This could convert hourly paying clients to annual maintenance contracts. But there’s also regular cash in reselling third-party services like hosting, or creating a product and selling it yourself.
The idea is to add variety in a way that works for you. Think about what makes the most sense for your situation.
Create a Long Term Plan
If your client roster is heavily skewed in one direction, it will take time to make a significant change. So don’t expect to create more diversity overnight.
By creating a long-term plan, you will be able to work towards your goals within a specific time frame. For example, let’s say that your biggest client is 50% of your annual income. You could create a goal to reduce it to, say, 40% within a year.
From there, it’s about implementing a solution that will help you get there. No matter how you plan to do it, you’ll at least have some guidelines to follow. And you will also have a way to measure progress.
That said, the exact percentages are ultimately up to you. While it’s great to have as much balance as possible, none of us are likely to be perfect in this area. In the end, it’s all about finding numbers that make you feel comfortable.
Watch where you lay those eggs
When you started your freelance web design business, client diversity and income were probably not at the top of your mind. That makes sense, as the first goal is usually to find paying gigs.
But as your business grows, putting too much pressure on a large client can become overwhelming. If they go away, there’s always the chance that you’ll be left with too many bills and not enough money to pay them.
Instead of putting all your eggs in one basket – diversify. Find out how your income is divided. And, if you don’t have a balance, consider your options for adding new sources of money.
Finally, create a plan and implement it. If things are still not moving in the right direction, you can always adjust along the way. The beauty here is that nothing is set in stone. You can evolve according to your needs and industry trends.
Hopefully, you are prepared for long-term success and able to withstand those unexpected bumps in the road.
