#316: Contracting Is For Suckers | There’s A Better Way To Freelance
Jul 9, 2024
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The podcast discusses the drawbacks of freelancers working as contractors and offers solutions for stability and income diversification. It highlights the importance of narrowing down client base to businesses in the $1 to 20-25 million range. Additionally, it explores diversifying income streams and providing personalized freelancer assistance.
Contracting gigs lack stability and benefits, leading to stress and uncertainty.
Diversifying income streams and implementing flat-rate pricing can enhance freelancer profitability.
Deep dives
Contractors vs. Freelancers: The Pitfalls of Long-Term Contracts
Some freelancers find themselves in long-term contractor roles that lack stability and benefits. While the immediate pay may seem attractive, the absence of benefits, job security, and control over their work leads to stress and uncertainty. Contracting for big companies like Dropbox can be lucrative, but the constant need to seek new projects every few months can disrupt workflow and financial planning.
The Importance of Diversification and the 10% Rule for Freelancers
To maintain stability, freelancers should adhere to the 10% rule, ensuring that no single client represents more than 10% of their income or time. Diversifying income sources across multiple clients prevents over-reliance on a single source and reduces financial risk. This approach promotes financial stability and allows freelancers to weather fluctuations in their client base more effectively.
Productized Services and Efficient Pricing for Increased Freelancer Profitability
Implementing productized services and flat rate pricing can enhance freelancer profitability. By offering well-defined services with clear deliverables, freelancers can improve efficiency and benefit from time-saving processes. Charging flat rates aligns incentives between freelancer and client, leading to increased revenue as freelancers become more efficient in service delivery.
Understanding the Spectrum of 'Nice to Have' vs. 'Need to Have' Services in Freelancing
Recognizing where a service falls on the 'nice to have' versus 'need to have' spectrum helps freelancers target clients effectively. Services deemed closer to the money, such as those addressing essential needs or solving high-value problems, tend to command higher fees and attract more lucrative clients. Understanding this spectrum enables freelancers to align their offerings with client needs and enhance their earning potential.
Ever been offered a gig where a company or agency is hiring you on as a contractor (or subcontractor)?
To anyone desperate for work it an sound like a dream, but here's the catch – it's actually a trap.
In our latest podcast episode, I break down why contracting can seem like a godsend for freelancers desperate for gigs, but it often becomes a nightmare that's impossible to escape.
So, what’s the alternative? This week I dive into:
The 10% rule every freelancer should follow.
The illusion of security in contracting gigs
A stable freelancing model with diversified income streams, stackable projects, and flat-rate pricing
For anyone who's currently contracting under another company, I hope by the end of this episode, you get away from the "dark side" and learn how much better a stable freelancing model can work for you.