How to make more money as a freelancer
Part Four: The Ultimate Guide to Freelancer Finances
This is the last in a four-part guide to freelancer finances. From day-to-day cashflow management to thinking bigger and smarter about your money, it covers everything a freelancer needs to know to get on top of your finances.
In this guide, I outline the following four ways to make more money as a freelancer:
Diversify your income
Raise your rates
Get a retainer
Scale your business
Diversify your income
By now, you will have heard this from me ad nauseam, but a diversified income is a sustainable income.
From a financial point of view, there are two key reasons why it’s important to build multiple revenue streams. The first is to spread the risk – if you rely solely on one income source and something happens to it, you’re left vulnerable. So for example, if you only write articles for a couple of traditional media outlets and one of them closes, that’s a big chunk of your income gone.
Another reason to add additional income streams is to help regulate your salary. If at least one income stream is regular, that will mitigate for those that fluctuate. So for example, if you have a part-time teaching gig, that will take the pressure off freelancing ad hoc articles.
Put simply, put your eggs in lots of baskets. Here are a few baskets (revenue streams) freelancers can explore:
This is when your audience pays you directly. The big advantage of this model is that it gives you the full creative freedom to run a project exactly how you want to it. You don’t have to wait for a green light from a client to develop it, you just sell it directly to your audience. Platforms like Pateron, Substack, YouTube and Memberful all allow you to create an audience-funded revenue stream.
This model works well for content – newsletters (you’re reading an audience-funded newsletter right now!), videos and podcasts. And you don’t need a massive online following to launch an audience-funded creative project, you just need a great idea and an engaged audience.
Brand partnerships/sponsored content
When we think of brand partnerships, we typically think of influencers with huge followings doing Instagram paid partnerships, but brand deals can take lots of different forms. A brand partnership is really just a brand paying you to make content for them.
So a partnership might look like a company sponsoring an episode of a podcast, but it can also be a content creator making a piece of content for a brand that sits on their website or media channel. (As an example, I’ve written blogposts for Starling Bank in the past.) Again, you don’t actually need a huge following to do this work, especially if you do a brand deal that involves you making content for a brand’s channel rather than your own.
Speaking at events – particularly corporate ones – can be a very lucrative string to add to your bow. There are agencies who specialise in finding you speaking gigs, or you can approach events managers and companies directly with a proposal.
Public speaking might not be for everyone, but you also might be surprised to find you do actually enjoy it. Lots of journalists, writers and bloggers find that they do actually enjoy speaking at events because it’s really just a different medium for communicating a message.
Not enough writers take advantage of the many nonprofits and foundations out there who are willing to give you a lump sum to fund a project. While this revenue stream won’t be a regular one, it will give you an opportunity to undertake an ambitious project that might otherwise be hard to realise, such as a foreign reporting trip. You can look for grants on GrantsOnline.org.uk, the European Journalism Centre and JournoResources.
Creatives often forget how valuable their skills are and how willing people are to pay to learn them. Teaching can be a brilliant revenue stream to develop because often you can land a regular gig as a part-time or guest lecturer, which comes with a regular paycheque.
You can teach in educational institutions such as universities and colleges, but you can also teach peer-to-peer via industry or training bodies. While the latter requires you to proactively approach a company, universities often post part-time roles on their websites or on jobs boards.
For anyone who’s never worked in a corporate setting, consulting might sound like a very professional service beyond the capabilities of a creative person. However, consulting is really just a fancy way of saying “teaching” or “advising”. Rather than doing it in an academic setting for a student, you’re doing it for a client in a corporate setting.
If you’re wondering what you would consult in, the answer is any and all of the skills and expertise you already have. If you’re a journalist who specialises in women’s rights, you could consult for a company on their diversity policies. If you’re an editor, you can consult businesses on their content strategies. As with all of the above revenue streams, start by thinking about your existing skillset and then work out some ways to package them in a way you could sell to others.
Raise your rates
There are two ways to increase your rate as a freelancer – either you start charging your existing clients more, or you find high-paying clients.
Generally speaking, it’s a good idea to start with the latter. So how do you find better-paying clients? You have to proactively look for them – before you need them.
Where a lot of freelancers often fall down is that they wait until they need new clients before looking for them. The problem with doing this is that you are acting from a place of scarcity. You won’t be in a position to do full market research and make sure you’re targeting the highest calibre clients instead, you will end up taking whatever you can get.
Here are some ways to find new and better-paying clients:
Keep tabs on industry news so that you know what’s going on in your sector. You want to be the first to know which new companies are popping up and where the trends are heading so that you can get ahead of them. Start a running client of potential new clients and keep it updated
Once you’ve got a decent list of potential clients, start contacting them. Send them proposals, pitches or letters of introduction. And don’t just send one of these a month, send lots – you won’t get a reply from everyone, so send more than you think you have the capacity to deliver on to take account for that.
Make it easy for potential clients can find you. Make sure your LinkedIn, website and Twitter bio are all consistent with what you actually do. Emoji-filled Twitter bios are cool, but they won’t help an editor looking to commission a writer find you very easily.
Pay attention to where other freelancers are working – don’t waste your time being jealous of their commissions, instead try and figure out who is paying well and for what kind of project. And if you have that kind of relationship with them, ask them about the pay.
Doing the legwork to find better-paying clients will then have a knock-on effect in that it will give you leverage to raise your rates with your existing clients. In any pay negotiation, you need to have a clear reason why you’re asking for more money. If you’re able to say, my standard rate has increased and other clients are now paying me “X”, that gives you more power. Also, for you to know that you could take this work elsewhere and get more money for it, that puts you in the driving seat.
Get a retainer
A retainer is a golden goose for freelancers. This is because it’s an agreement for a client to pay you a fixed regular amount in exchange for ongoing work. Getting a retainer can be tricky because clients are reluctant to hand them out as they prefer to work with freelancers on much more flexible terms. That’s not to say it’s impossible to land one.
The best way to get a retainer is through a client you have an existing relationship with – it’s something to aim towards and build up to. A good rule of thumb is that if you’ve been working with a particular client for over six months on a regular basis, then you can introduce a conversation about a retainer. You will increase your chances of your client agreeing to put you on one if you have a good relationship with them and can talk comfortably about your payment arrangement.
When you approach them about the retainer, you want to frame it as a way for them to save money in the long term. Try to make a proposal that gives you the security of regular work, but the client also benefits financially (or at least, thinks they are benefitting financially).
Scale your business
There are only so many hours in a day. If you get to the point in your freelance career where you’ve maxed out the amount of work you can take on and you’ve recently raised your rates, you may want to think about scaling your business.
Here are three ways to scale a freelance writing business:
If your issue is that lots of work keeps coming your way and you’re having to begrudgingly turn it down, you could think about starting a mini-agency. This doesn’t have to mean leasing office space and hiring a 15-strong team. You can start a virtual agency, built on a flexible model.
So you would bring in work and agree on a project fee with a client. Then you would use a freelancer (or team of freelancers) to deliver the work, paying them a fee from the money the client paid you. If you’re a natural-born project manager who enjoys working with others and if you already have lots of client contacts, this might be a really interesting and lucrative avenue to explore.
Sell scalable products
As creatives, we tend to think of ourselves simply as service providers, but we can also make products. Digital products, in particular, can really help grow a business.
The idea is quite straightforward – a digital product can be made once and then sold multiple times. This is sometimes referred to as “passive income” but I personally find that a misleading term as you do need to put marketing effort into selling anything. If marketed well, however, it can be lucrative.
Products you can sell in this way include e-books, digital resources and online courses. You could also think of a traditional book as a scalable product. Anything you can make and then distribute on mass will help you scale.
Hire an assistant
The rise of virtual assistants has made it easier than ever to take someone on to help you run your business. You may want to start with an assistant who can help with admin tasks, which frees you up to work more on the higher-value projects.
There are also specialists virtual assistants out there who can do a lot more – such as help with research, social media and even business development. If you are thinking seriously about scaling your business but aren’t sure where to start, hiring an assistant might be the best place.