Warriors

No person, trying to take responsibility for her or his identity, should have to be so alone. There must be those among whom we can sit down and weep, and still be counted as warriors.

Adrienne Rich, Sources

Expectations

I’m not in this world to live up to your expectations and you’re not in this world to live up to mine.

Bruce Lee

Recurring revenue: a path to sustainability in your solo freelancing firm

Becoming independent is easy; remaining independent is difficult.

Some of my low years have been so deep that I arguably really should not have continued my solo practice. While the high years generally made up for it, that wasn’t helpful when in the middle of those low points …when I really needed to pay myself a living wage (not to mention my overhead).

There are numerous ways to maintain a baseline of revenue. One way I’ve found sustainable income is retainer arrangements, which work well for the types of clients which benefit from being able to periodically access me for advice and small requests, and which desire priority access to me when something important and urgent arises.

I happen to like recurring revenue because it reduces my ongoing sales and marketing needs (to an extent) and makes my short-term cash flow more predictable. This frees me up to serve my clients, to pursue newer (more risky or less predictable) business opportunities if I so choose, and helps stabilize my income in a way that I haven’t been able to meet through any other technique.

I also personally prefer it because I like to work with the same clients over long periods of time, and retainers focus my energy on those types of clients.

Retainer arrangements are like Membership offerings — Only Better

I view retainer arrangements essentially like a paid membership offering — only better. Membership has its privileges (that is, after all, why someone joins) and in and of itself — with some creative thinking — you can create something valuable to your types of clients.

But even more interesting — each individual arrangement can be customized — one can tune the specific benefits and specify other perks that are appropriate and valued by each individual client in question. Costco can’t do this. You can.

This increases value to the client. This, in turn, increases conversions of proposals into sales, better retention (renewals, which decrease time devoted to sales and marketing and increase your operating profitability), and boosts what you can charge. Win-win!

Payment Terms

My retainer arrangements are typically one of monthly, quarterly, or annual. I automatically invoice at an appropriate point near the end of the current period for renewal. I also require a heads up a reasonable period prior to renewal if the client won’t be renewing.

One difference between retainers and other types of work, is that full payment is always required prior to each period — not during or after. This is important, as it’s helps justify the discount you’re effectively offering in exchange for your receiving prepaid guaranteed income; this goes away if you bill after the period is over.

How to start offering retainers

I got my feet wet with retainers by offering them as an optional add-on to existing client projects at proposal time. I spent time thinking about each project and determining where there was value-add to ongoing follow-up of some sort. Not everyone went for it, and some projects were better fits than others, but enough did… until it donned on me I could make this a central part of my practice not just a small revenue bumper tool.

I suggest this route because it allows one expand their comfort zone in a low risk manner, without scaring off clients or cannibalizing existing business. And, over time, it’ll give you a better idea of which opportunities make the most sense to explore and which clients really see the value in this sort of arrangement (many clients won’t and that’s fine).

What to include in retainers

This is really something that you will know best as you know your specific types of clients best and your market. Here are some suggested places to look for ideas that worked for me:

  • Look at past project proposals and ponder what types of add-on or ongoing value-add offerings might have been appropriate
  • Look at existing projects in progress and do the same
  • Chat with clients about their ongoing non-project needs.
  • Brainstorm ideas, even ones that sound far-fetched and commit to selecting one or more of them to tack on your next few proposals as optional add-on offerings. Ask for feedback after proposal acceptance, from those who did not opt for it.

Should project work ever be included in retainer arrangements?

Should project work ever be completed as part of a retainer arrangement? That depends on your goals. Some of my retainer arrangements have been about establishing predictable income and basically are designed to be cash cows for me, albeit heavily discounted versus if I’d performed the same duties on a project by project basis. I was willing to accept this because my priorities were different at the time. There’s nothing wrong with this, but know why you’re doing it if you do it.

Most of my retainers include a discounted rate for project work, applied either to my hourly rate or to my quoted fee for any future projects we do together during the term of the retainer arrangement. The client will still be paying separately for the project work, but gets a discount in recognition of their membership status.

Final thoughts

I think retainer arrangements are a good component of a well rounded solo practice. They bring additional value to clients, encourage long-term client relations (leading to more project work), often can make project work more successful (by incorporating ongoing maintenance and adjustments), can reduce firefighting (by encouraging reaching out for advice and assistance with small tasks), and can bring stability to our cash flow and income.

How to immediately start closing more freelancing deals

One of the biggest reasons prospective clients don’t proceed with a project after having you provide a thorough proposal is because they are concerned about their options if you mess up. Take that risk away: Offer a strong guarantee. Here’s how I do it in my consulting practice.

Something like this will do:

The quality of my work is guaranteed. If you do not believe I have met the mutually established objectives for this arrangement, I will continue to work toward those goals with you for no additional fee. If, after such an additional attempt, you still believe I have not met your objectives, I will refund your fees in total.

I borrowed this idea from Alan Weiss years ago, include it as boilerplate in every proposal letter, and haven’t looked back.

Is the above scary? Are you taking on more of the risk? Yes. That’s why it’s powerful.

Do you have to use exactly this language if it makes you too uncomfortable? No. But make sure you pick something that makes you a little uncomfortable. Otherwise it’s meaningless and not compelling. And therefore not of value.

(Also, you’ll have to adjust the language if your projects aren’t fixed fee — like mine predominantly are — but the spirit can be similar.)

Not incidentally, offering a compelling guarantee is also justification for charging higher fees. Accepting risk — taking it away for the client — has value. Clients aren’t simply paying you for your advice or your labor, but everything you bring to the table.

If accepting this level of responsibility for your work isn’t acceptable to you, that’s fine. Just expect to close fewer, smaller, and less profitable deals. Which is fine if it helps you sleep better.

But I sleep better doing things this way[1].

[1] You don’t have to go crazy. Try it on a proposal or two and see what happens.

Why Marketing Really Matters for Solo Professionals

What getting good at marketing can do for the individual is to help him or her find the clients they could care about and be eager to help, and the types of work that would be truly stimulating. The better you are at marketing, the more truly professional you can be, because you are not forced to take money from anyone and everyone just because you need the cash.

— David Maister in “Doing It For The Money

A business does marketing and sales for the money, but that’s not the sole reason to get good at it.

David’s original article is a bit long, but there are some other tidbits wrapped around this quote if you feel inclined to dig them up. I also recommend two of his books, “The Trusted Advisor” and “Strategy and the Fat Smoker“ and/or spending a morning with your coffee in hand while perusing his articles and blog archive.

Amateurs Get Angry With Clients. Professionals Educate Them.

Paul Jarvis, writing for 99U:

As most experienced freelancers know, sometimes we have to fire our clients, for their benefit and ours. But it doesn’t have to be this way.

I used to think dealing with frustrating clients was just part of being a creative. But then I realized while, yes, there are frustrating parts of any relationship, frustration should be the exception rather than the rule.

There are certainly times when we want to turn into the freelance version of Donald Trump, screaming “You’re Fired!” at everyone we disagree with. But the truth is, we deserve the clients we get. Bad clients aren’t the result of some cosmic force working against us, they’re more likely the result of our own actions.

Frustrating clients are the result of some misstep we’ve made along the way. To do our best work and work with the best people, we need to be diligent in our relationship with our clients.

Read his suggestions on how to accomplish this.