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When I first started my full-time freelance business, I was operating under several assumptions that no longer seem to apply in this economic climate.
I assumed, for example, that it was better to work for larger clients because they had bigger budgets, and as a result, would be more likely to pay me on time. I assumed that certain big-name clients would never go out of business or be decimated by layoffs. And I guess I thought that trusted regular-paying clients would continue to pay on time.
I’m here to tell you that every one of these assumptions has been smashed—either due to my own experiences or by observing what’s happened to some of my fellow freelancers in recent months.
In this climate, things are changing so rapidly. And what was true even six months ago, may not be true today. If you’re not careful, and your business model is based on some old assumptions, you might be on your way out of business if you’re not careful.
Here are some assumptions that will get you in trouble:
Myth #1: If I work for well-known, well-established companies, I’ll get paid. These days, even big well-established companies are struggling and folding. Witness all the recent cuts at Gannett and the financial trouble brewing at The New York Times. Magazines and other publications are folding, leaving some freelancers without pay for stories they’ve already written.
Myth #2: If I continue to do good work and turn it in on time, I’ll get paid. This may apply in a regular salaried, office job. But the rule doesn’t hold true for freelancers. Even if you continue to do a standout job for a publication or client, there’s no guarantee that you’re going to get paid on time—or compensated at all—for your work. Businesses are struggling right now, and just because someone continues to hand you assignments doesn’t mean that they intend to pay you on time—or for that matter, at all.
Myth #3: If I accept lower pay now, my client will eventually increase my rate when times get better. Dream on. If a publication cuts your rate now and you accept it, you probably will not see that higher rate again—unless you go work for another client.
Myth #4: My trusted longtime clients have always paid on time, so I shouldn’t have any problems getting paid now. The current business climate is making even the most trusted clients and publications hold onto their money longer. Even if a client has always paid on time, you can’t assume that will continue in this economic climate.
Myth #5: The clients who are supplying the bulk of my income today, will be there tomorrow. I had two anchor clients who supplied the bulk of my income during my first year of business (lack of diversity is not a recommended business model). Today, I no longer work for one of those clients—due in large part to budget constraints on their end. And the second client I still work for, but I do half as much work and get half as much pay—also due to budget constraints. Clients may love your work, but it doesn’t mean that they’ll always be able to hand you more assignments or at the same level you’re receiving from them today.
Myth #6: I’ve always made money as a [fill in the blank with your speciality], so I’m not worried about making money in the future. This is a deadly assumption. With so many magazines and newspapers struggling these days, if you’ve always made your living as a magazine writer, you might not be able to continue making a living doing that kind of work exclusively in the future.
I believe that you have to challenge your own assumptions about your business and the way you’re operating it in order to survive this economic climate. And then once you identify what those are, you can develop self-defensive strategies to move forward and ensure that your business stays afloat.
Here are some questions to ask yourself:
- What are my assumptions about my business and the way I operate it?
- Are there any assumptions that I continue to operate under that no longer appear to be true today?
- What will happen to my business if I hold onto these assumptions?
- What are the new realities I’ve been denying as a result of holding onto these assumptions?
- How are these assumptions impacting my business right now?
- Now that I’ve identified my assumptions, what am I going to do about them?
Tomorrow, I’ll discuss some additional ways to protect yourself and your business in this current economic climate.
In the meantime, what are some of your assumptions about this industry and your business that are impacting you today? Drop me a line and tell me about it!
-Jenny
Here here.. I have to line up on the side of every comment made in this post.. Freelance for 18 years now as a television photographer and now doubling as a still photographer and a pretty good one at that if I may say so myself.. How far has good to great work gotten me over the years ? About “THIS” far.. The “clicks,” or small groups of pros who get the bulk of the work in big markets have each others back, do not allow others to get anywhere near, and have a stake in every corner that they lay claim to. You had better know someone. You had better keep that someone you know in close proximately so you can grease them, and keep them in good stead NO MATTER what type of person they are or how you feel about them. One slip up either of the tongue, or otherwise, and you are OUT. The one thing I found most hard to accept was that hard work, on time delivery, and being creative, DOES NOT keep YOU at the top of anyone’s list. In fact, those are the expected rules of thumb, and it’s the greased wheel that takes up the number one spot. No matter how offensive that is to swallow or handle, it IS, the way things work and the way YOU work. If you find yourself on the outside of those parameters, you are going to have to fight for every morsel and crumb you find, and you not likely to survive.
1170 days ago
[...] Deadly Freelance Assumptions (Or How To Go Out of Business) [...]
True to form, I used an alias here out of fear that what clients I have left will discover my current plight. For the past few weeks I have thrown myself into the idea that the business I created 16 years ago may very well be on the fast track to a memory. I fell onto this blog quite by chance. I googled “I am about to go out of business,” and this blog popped up. I am a freelance television, and still photographer. News, sports, newspapers, magazines, Television camera-man for local, and network and corporations. 16 years this business has taken me around the world several times and afforded me opportunities that I wouldn’t have ever dreamed of. I’ll make this story short. I too am having slow pays like most of you, however I am far more concerned over the phone not ringing at all, than I am about people owing me money. I am not your average “shutter bug bob,” and thus have with television AND still gear about $200 grand in equipment, and 16 years of experience that is slowly and almost surely going to waste in this economic calamity. Being the pro-active type rather than re-active woe is me type, I have shared my current experience even with competitors and I too feel that efforts like this blog between others in similar situations even between competitors are necessary to save ourselves and our business. I do not intend on giving up my efforts to survive and I hope just knowing others are in the same boat gives people the hope and determination to save themselves from the curse of giving up. By the way, I would not be doing myself, or any of you justice if I didn’t offer my photography skills to any of you who may need it regardless of your ability to pay. In the end it’s people, good people helping each other, that is going to turn our individual situations around one step at a time. If there is anything I can do for any of you, my email is straightupmedia@gmail.com
Never give up, and God bless.
1216 days ago
[...] Golden Pencil have a very good article this week on Deadly Freelance Assumptions (or how to go out of business) Some excellent freelance myths debunked in this article and a must read for all [...]
amen… I identified with every single one! I’m chuckling and remembering my many false starts.
Thanks
Anne Wayman, now blogging at http://www.aboutfreelancewriting.com
1217 days ago
[...] Deadly Freelance Assumptions (Or How To Go Out of Business) – The article lists 6 myths. Believe them and you’ll be guaranteed not to make money as a freelancer. [...]
All so very true. This is really an eggs in one basket senario. One of the main problems with large corporations is they are constantly changing, re-organizing, shifting budget holders and even countries of where the budget sits and marketing departments are the worst for being unstable.
They are also far more demanding in my experience and less appreciative.
Give me small to medium sized businesses any day. Not only can you see the difference you are making in real terms, but the gratitude for helping them increase revenue makes it so worth while.
Thank you for a great post.
Assumptions can turn into bad habits when you start thinking in terms that your clients are always going to be there for you. Just because you did an ecellent job, doesn’t mean that they will be excellent back with a load of money to see you through the next month.
I agree with another opinion on here that this doesn’t just apply to freelancers, your article covers an array of businesses out there that go through the same emotional drama. :-)
Plenty to reflect on in this post. Thanks. I have to get a pad out and start writing down all my assumptions. I had not realized I had this many.
Very interesting take. I have indeed been getting paid more slowly by pretty much all clients, even though I’m getting lots of work, and I believe 2008 was actually my best earning year, oddly enough.
(Probably because, given the economy and a couple of previous lean years, I went after work more aggressively than in the past. Which proves that if you do good work, and are willing to hunt for work, it’s out there!)
But–there’s the eternal dilemma: If you’re very busy today (even if pay may be slow) how do you make the time to hunt for new work for tomorrow?
Hi Jenny:Got a retweet from @Loreen72 via @problogger re: your 8 Ways to Tick Off Twitterverse. I’m new to Twitter. Very much appreciate your excellent advise. Thanks – Bruce
This is all so true, especially #3. People get used to paying you a certain rate–and almost expect to never pay you more. Some advice for that, though. Ask for raises periodically. I’ve done this with long term clients as my rate has increased. I’ve known that asking for more $ might result in losing them as a client, but that was ok with me. I actually only have ever lost one client that way, and it was worth it!
The best assumption in this modern world is that there is no assumption. I have been earning my livelihood for the last three years through blogging. I have seen some bloggers becoming very successful while many others were forced to leave the field. In any field, you have to adjust to the changing reality and the reality is constantly changing.
Very interesting post, thanks! I recently left my translation management/content manager job in corporate America to run my own translation/copywriting business with my twin after years of doing it part-time. Of course, the timing is a challenge, but as you say, you must question everything and not take anything for granted. I am always looking for new clients, networking, writing, blogging, etc., even when I am so busy I have to turn work down (or gladly refer colleagues): you never know what’s around the corner.
I especially like Myth #3. Just like freelance writing, translation is a very price-competitive business, which does no one any good (lower prices usually mean quicker turnaround, lack of editing/quality assurance/sloppier quality; client doesn’t speak the language, can’t tell, and realizes translation was poor when new advertising campaign is the laughing stock of say, China). I have always been a proponent of setting a price that adequately compensates the professional service that’s being provided and sticking with it. We are on the very high end of the spectrum (we are the Porsche of translations!), and we frequently price ourselves out of the market for certain jobs. However, once you compete on price you become a commodity, and that’s bad news. And I completely agree with you: once you accept a lower price, why would anyone pay you more later on? It’s not a good negotiation tactic. When we do lose clients because they want to pay significantly less than we charge, we spend that time on marketing, search engine optimization, etc.
Looking forward to tomorrow’s post. It would be sad if litigation were the only answer.
Thanks Adrianne! And now that you put it that way, I guess I’d have to agree. The questions and myths can really apply to any business.
Business owners really need to tune into their assumptions, and make sure they’re not operating on ones that are no longer true.
I’d argue that your article applies to more than freelancers – it applies to every business today. We all need to wake up to this new reality, and understand that the rules have changed.
Great post!
Adrianne Machina
Tornado Marketing, Inc.