It’s definitely not easy to set up your freelancing business. You have to do a lot to survive in the market and build your brand. To ensure that you don’t find your freelancing business struggling to stay afloat, you must strategize to maintain the cash flow. This is where recurring income plays a crucial role.
So what’s recurring income, and how can it benefit your freelancing business? To put it in simple words, recurrent revenue refers to your business income repeated from month to month. Your clients or customers pay monthly. Revenue generated via one-time purchases does not count.
You can adopt various business models for this purpose. For instance, you can ensure that your products and services are structured such that your clients have to pay a monthly subscription fee. Another option is to offer a retainer package or give your clients the opportunity to go for a more spread-out payment plan.
Importance of Recurring Income for Freelancing Business
Why should freelancers endeavor to make arrangements for recurring revenue? Let’s face it. Freelancing can be quite an unpredictable field. There are times when you will be flooded with work while you might also have to face situations wherein finding a single client becomes a challenge.
Naturally, no business can stay afloat with such unpredictability. Additionally, if you are a freelancer, you probably have lost a client at some point. This must have made you realize how crucial diversification of income is.
You can evade a lot of such financial crunches if you take measures to maintain your recurring income. By working on a strategy that enables you to earn recurring revenue, you can ensure you use your skills and clients to their best potential.
How To Strategize For Recurring Revenue For Your Freelancing Business
By now, it’s well established that if you want your freelancing business to transform into a brand and avoid financial problems, recurring income is of utmost importance. But the question is, what can you do for this purpose?
Prepare a Roadmap for Yourself
Firstly, you have to figure out how much money you need pouring in to continue your freelance business smoothly. You have to be clear about the needed cash flow, including your regular income and recurring revenue.
Don’t panic! It’s actually pretty easy to figure this out. All you have to do is ask yourself a few questions about your business. For instance, you must know the minimum amount you need every month to continue your job and pay your bill.
How much work can you handle in a month? You have to be realistic about this and decide how many hours you are willing to put in for your freelancing business.
Learn to Filter Your Clients
Keep in mind, even your freelancing work is a business. And profit is of utmost importance. You have to decide which of your clients is actually worth your efforts. You have to focus on your growth and build your brand.
Of course, this wouldn’t be possible without extensive marketing. However, since you want regular income to flourish, this time, your marketing strategy should be focused on attracting high-paying clients. Yes, it’s time to move on from the clients who pay you low rates.
This does not mean you let go of all your low-paying clients at once. Take one step at a time. Drop a low-paying client when you get someone who is willing to pay your asked price. Continue this until all your clients are replaced.
Yes, finding high-paying clients will not be easy. But you have a few options.
- You can discuss payment with your existing clients. Send them an email asking for a revision in the payment structure. Inquire if they are willing to pay you monthly. You can even offer them a discount to entice them.
- Go back to your one-time clients. If you have people you worked with once and never followed up again, now is the time to change it. If someone liked working with you once, they might be willing to do it again. And you can pitch your services and request them to consider paying you on a recurring basis.
- You can contact content agencies to get a steady flow of work and recurring income. Keep in mind that these content agencies have a variety of projects, and they are always on the lookout for quality freelancers.
- You can learn more about clients who are willing to pay monthly via your freelance colleagues.
Consider Subcontracting Your Business
As we have already mentioned, you must run your freelancing business like a company. And this means that sometimes you will have to pay other people to get a job done. So, there are a lot of big projects that you will not be able to do alone.
So does that mean you turn them away? Definitely not! Instead, you can hire other people to complete the project. Once you convince your clients that you are capable of undertaking any kind of project, they are more likely to consider you for long-term work. And become a source of your recurring income.
Prepare a Retainer Agreement
If you find a client willing to pay monthly, don’t hesitate to create a retainer agreement. This binds your clients to pay the agreed-upon price monthly.
Also, this works well for both parties. Your client does not have to worry about your availability. And you have a steady source of recurring income!
Let Your Freelancing Business Flourish
Keep in mind that no strategies or tricks will work if you compromise on the quality of your work. You must ensure that your clients get high-quality services. Only then will they be inclined to pay you according to your preferred model.
So ensure that you always give your best to every project, and retention of clients wouldn’t seem such a challenge.