Freelancefolder

The Seven Deadly Sins of Freelancing Part 6 – Lack of Diversification

Posted July 17, 2008 in Uncategorized 7 Comments »

If you’re anything like me, you like getting paid, but you hate dealing with invoicing and collections. You’re a writer, designer, developer, etc… not an accountant.

This problem is multiplied when you’ve got a long list of clients with whom you’re working. It’s tempting, when a large gig comes along, to hitch your wagon to that star, and work almost exclusively for a single client.

There’s a problem with that, though. You’re ignoring one of the deadly freelancing sins.

Deadly Freelancing Sin #5: Lack of Diversification

When I worked in the Information Technology field, I worked for a contracting company. 80% of the employees for that particular contractor were assigned to a single client (a large pharmaceutical firm). The contracting company wasn’t small; there were something like 85 employees working onsite for that single client.

Things were going swimmingly until the pharmaceutical firm decided it needed to streamline some of its business processes. One of the ways it decided to do that was to limit their services vendors to six firms. This meant that every contracted function, from physical security to systems administration had to come from one of six companies.

Some of the contractors were set up to do this just fine. They were general employment type firms, and contracted everything from CPAs to CNAs. Our firm, however, was exclusively an Information Technology contracting firm. We waited in the lurch for eight weeks while the client decided which six firms, out of the two dozen they’d previously used, would make the cut.

Our firm didn’t make it. 85 people were out of a job with no immediate prospects because their employer failed to diversify. This happened just as I was leaving the company for another job, so I considered myself very lucky.

And that’s the same danger your freelance business faces. What happens if that one big client doesn’t need you anymore? Maybe you have a falling out. Maybe the client just runs out of work. Maybe the client finds someone better than you (they’re out there, I promise). Maybe they go out of business. Whatever the cause, if you’ve got just that one big client your freelancing career is in jeopardy. You’ve got to diversify.

How do you do that, though? It’s not as if you can turn down a large, long-term client. The prospect is too lucrative to leave it sitting on the table. To turn down such a gig would be akin to saying, “I’m not going to drive my car today. It might get a flat tire.”

How, then, do you maintain a diversified freelance business when you’ve got that one large client? I think there are several things you can do.

Continue your sales and marketing efforts

This is true, in general, when it comes to freelancing. It’s easy to find yourself in a cycle of success, where you spend all of your time doing good-paying work for clients and very little time on sales and marketing. That work dries up, and you find yourself scrambling to get some quotes out and knocking on virtual doors for weeks. This is a huge mistake. However you do it, you’ve got to keep building your brand, getting your name out there, and keeping on potential clients’ radar.

Consider subcontracting some of the work

If a gig is large enough and pays enough to where you could drop off your other clients, then it probably pays well enough that you could outsource some of the work. Be careful with this, of course. The client expects whatever quality or style you’ve delivered in the past. If it’s going out with your name on it, make sure your subcontractors are doing reliable work. After all, it’s your reputation, not theirs. In addition, you should let the client know that you’re subbing the work out, all the while assuring them that you’re going to act as a gatekeeper and make sure they get the quality they want.

Communicate effectively with other clients

If you do find yourself having to turn down work, make sure you let your other clients know what’s going on. Don’t drop the ball on a previous commitment. Work some overtime if you’ve got to, but meet all of your obligations. You want to be able to keep those other clients once your big gig is done.

So, what do you think? What’s ideal here? I know one freelancer who tries to make sure than no more than a third of her business is coming from a single source. Is that realistic, or even desirable?

Bob Younce

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About the author: Bob Younce is a full-time Internet writer and writing mentor living in Linwood, Michigan. He is dedicated to helping Internet writers to achieve their dreams. Visit Bob at The Writing Journey or follow him on Twitter.

The Seven Deadly Sins of Freelancing – 7-part Series:

• Part 1: Underestimating The Job
• Part 2: Overestimating Your Abilities
• Part 3: Failure To Plan Your Business
• Part 4: Ignoring Marketing And Sales
• Part 5: Accidental Branding
• Part 6: Lack of Diversification
• Part 7: Sacrificing Integrity

About the author: Bob Younce is a full-time Internet writer and writing mentor living in Linwood, Michigan. He is dedicated to helping Internet writers to achieve their dreams. Visit Bob at The Writing Journey or follow him on Twitter.