Here’s the entire playbook I used every time I had a drop in my agency’s revenue:
The client reduced hours from 40h/w to 20h/w.
I found a new client with matching or above hourly rates to cover the missing hours.
In theory, this looked good: I minimized my time with reduced revenue.
However, by devoting 40h/w to client work, I never had time to grow my agency in other aspects that cannot be expressed as $/h.
This time the tech layoffs caught up to me.
The revenue from one of my clients dropped by 50%.
But I challenge myself to avoid going by the above playbook.
My instinctive compensation for the lost dollar per hour comes from the full-time employment mindset.
The paid-by-the-hour employment doesn’t scale because you, by yourself, will only be able to work one hour at a time.
So if you’re freelancing but working on per-hour projects, that’s closer to employment.
While this kind of employment gives you a steady paycheck, if you max out your weekly 40h, you’ll have no time left to scale beyond the paid-by-the-hour thing.
I have to sacrifice some of this steadiness to be able to grow.
So this time, I chose a different strategy to cover up for the lost revenue: fixed-price projects.
They have two potential upsides compared to the long-term hourly-based projects I picked while freelancing until 2016:
Fixed scope means foreseeable end-date
My longest freelancing contract (hourly based) lasted for more than a year. When it was about to end, I couldn’t do much because I was already working full-time in that position and wasn’t been looking for clients for more than a year.
With fixed price/scope projects, I know the project ends when I complete the objectives. If that’s next Friday, I can already start sending some offers and looking for the next gig.
More connections, more experiences, more luck
As I mentioned, in 2015, I worked with one client (we still work together, so it was a great collaboration that worth the time) for more than a year.
That’s still one client and one positive review.
We’re almost halfway into February, but I already have three contracts with two clients.
Both contracts are ending by the end of this month. I plan to find two new clients the following month, the two new ones again and again, and repeat this for a year.
In the best-case scenario, I work with 24 people I didn’t know. That’s 24 new connections with CEOs CTOs and companies that might want to work with me in the future. But even if I end up working for these two clients for the rest of the year, that’s already a 100% increase in new clients met per year compared to earlier.
Conclusion
Will these fixed-price projects make up for the lost revenue? They won’t fall far, but they won’t compensate or exceed my old revenue, at least not this year.
Luckily my full-time engagement in the past four years gave me enough room so that I don’t have to rely on a steady paycheck anymore, and I can experiment with alternative ways of growing my agency.
My Best Bookmarks
This is an entirely new section, and I hope you’ll like it.
I’ll share tweets, newsletters, or blog posts that have resonated with me since my last newsletter.
Dedicated Growth Time
Joe Private reinforces what I wrote above about having dedicated time to find new projects and clients to work with. He was laid off from his job, and he could allocate 100% of his time to interviews and landing his dream job:
Just think about what difference can make if you dedicate 0 hours besides your 40h work-week to finding new clients vs. when you have dedicated ten hours to do that.
How to brag
Michael gives you some great tips on how to showcase your abilities to clients without intimidating them and discouraging them from collaborating with you:
Be specific
Crafting some proposals by the end of January taught me one thing: be as specific as possible with your offer. If you don’t see how to solve someone’s problem, think twice about applying for that gig.
Erica summarizes this in her tweet nicely:
This is all for today’s newsletter.
As always, thank you for reading, and see you at the next one.
- Akos