How To Create Multiple Income Streams
What do you do if you have one main client and for some reason the work from that client dries up? Perhaps the client goes out of business or goes in a different direction or just has a lull in business?
Your main source of income is then gone. Which is why it's crucial for anyone who relies on their freelance revenues to have multiple streams of income.
That's easier said than done, of course, as many freelancers have two or three main clients and are happy to focus on those alone. But as many experienced freelancers will tell you, that's a mistake.
Today we'll look at a few different ways to set up multiple streams of income to make your freelancing business more stable and ensure that you're living the freelancing good life for years to come. Please note that the following are just different options you can choose -- I'm not recommending you do all of them.
Editorial Note: A few times a month we revisit some of our reader’s favorite posts from throughout the history of FreelanceSwitch. This article was first published in September of 2007, yet is just as relevant and full of useful information today.
1. Have multiple clients. If you rely on one main client, slowly start branching out to new clients. That doesn't mean to add a bunch of new clients willy-nilly, but to gradually add good clients, one at a time. You need to ensure that these clients fit with you, that you work well with them, that they don't give you too many headaches. If the client fits those criteria, keep them. If not, dump them (professionally and nicely) and move on. But aim to have a wider variety of clients as well, as you don't want a single unfortunate event (say the collapse of an industry) to wipe you out too.
2. Have a full-time job. You may already have a full-time job, and if so, my recommendation is not to quit outright. You might downsize your job, if you don't really need the income anymore, but it's often smart to keep the full-time job in some capacity just to ensure that you have that regular paycheck coming in. You could cut back on your pay and responsibilities, though, and work from home if possible.
3. Have a part-time job. If you don't have a full-time job, and don't think getting one will work for you, consider a part-time job. If you have valuable skills, often a part-time job can pay good money and offer you the flexibility you want so you can continue to freelance.
4. Get a contract. This may seem the same as freelancing, but I'm talking about a different kind of contract from freelancing. Freelancing tends to be on a per-assignment basis, while other contract options could be on a monthly rate for performing certain services, for example. I'm working on a contract with a non-profit organization to do some work for them on a monthly contract. The good thing is that you can do contracts and freelancing at the same time.
5. Start a blog. I've done this, as have many others of course, as a way to market my writing and to share my knowledge with others. And I make some decent cash from it, from ads, that adds another revenue stream. It can take awhile for a blog to make any money, as with any business, but I think it's worth the effort.
6. Create a product. If you currently provide a service as a freelancer, you provide the service once and get paid once. Then you have to provide the service again to get paid again. However, if you can turn your service into a product, you can do that once and get paid many times. For example, you could create a DVD or podcast explaining how to do something (design a web page, for example), or a workbook or other kind of instruction manual. If you have a popular blog (like Freelance Switch), you may be able to sell merchandise. Set it up once, and collect an income stream thereafter.
7. Teach a class. If you have valuable knowledge or skills, teaching that to others can pay well. Teach at a community college, set up a series of seminars, or create your own classes at your business, home or community center.
8. Offer coaching or consulting. Instead of teaching an entire class, you can coach people one-on-one (or in small groups) or teach them how to set something up through consulting contracts. For example, if you do design, you can work with a bunch of new designers to show them how to set up their business, buy the software, bill clients, etc. Or you might teach them how to be better designers.
9. Start a small business. Many of the above examples are also small businesses, of course, but I'm talking about a more traditional type of business. One that sells a product or service in the real world or online, for example. You could get involved with a few others in creating a business where you do work in the beginning and then do very little afterward except collect checks. I know someone who set up a vending machine business, for example, where he made the initial outlay of cash, and then hired employees to restock the vending machines and collect his coins. He makes a good side income from it, and his small business loan for the initial outlay is paid off. There are many opportunities like this to create a passive stream of income.
10. Write a book. Write a book once, and you're done. It's not always easy to get it published, of course, but it's not impossible. I'm writing a book right now, actually, although I haven't tried to sell it yet. Books can be a long shot, but if they pay off, they can pay off big. They also help your credentials, which help with the other items on this list.
11. Affiliate marketing. If you have a blog or other kind of website, you can set up affiliate links to different services on the web. Darren Rowse of ProBlogger.com, for example, recently revealed that he's made more than a quarter of a million dollars through signing people up on the Chitika advertising service. When someone signs up through his affiliate link, he gets a small cut of their advertising revenue. That can add up if you get a lot of affiliate sales, and you don't have to do any work.
12. Sell an e-book. If publishing a book in the traditional way is a long shot, publishing an e-book is relatively easy. Many people publish them for free, but many sell them as well. And it's not hard to set up a website to sell an e-book, perhaps buy some Google ads to market it, and then have a small source of revenue from then on.