Making a lot of money from freelancing is always difficult task, especially in the beginning. You need to hit the balance between having lots of clients, charging enough and using your limited time wisely. Ideally charging more means you’ll have to work less to cover your costs, freeing you up to create more sources of income.
Around half of all businesses that start in the UK end up failing within the first five years. Another study from last year revealed that 8 in 10 businesses fail within the first year.
Findings like these make scary reading for anyone in business, whether you have a limited company or are a freelancer. How do you ensure you’re not one of those statistics?
The importance of having multiple sources of income
One of the most common mistakes that new business owners make is that they throw all their eggs into one basket. In order to achieve stability you need to make sure you’re covered if one source of income is disrupted for whatever reason.
For example, relying on one client either because they’re your only one or they simply pay most of your income is risky.
If that client has a budget restructure and suddenly decides it can’t pay you, then you’re left with nothing. That’s why it’s important to make sure you’ve got different clients and other possibilities for gaining income.
What is passive income?
One way you can protect your income is to set up passive income streams. This involves doing a bit of work initially but you’ll essentially be able to enjoy money coming in without the day-to-day work.
This is no replacement for your normal freelancing work, but it’s a nice stream of income on the side that can help boost your profits or cover quieter periods.
Here are some examples of passive income sources you can use:
Take a look at some of the big name freelancing websites out there. So many of them have ebooks you can download for free or for a small cost.
The best part is you only need to write that book once but you can sell your content to an endless amount of people without losing anything. If one book becomes successful then there’s always the option to write more if you think there’s a market for it, potentially building up a strong stream of income for years to come.
Alternatively, many people will release free eBooks in exchange for an email address that they can add to their newsletter which can increase your returns in other ways.
Have you been freelancing for a while? Think you’ve done well so far? People want your knowledge and expertise and some will be willing to pay for it. Depending on the amount of content or length of the course, you can sell these for much higher prices than an eBook.
You can do this in the form of a series of emails, course materials, through video or podcasts. Make sure that you’re providing value for money so that your students go away and shout about how great your course was.
There are a whole host of websites and courses created by freelancers to help out newbies. Take a look at something like Creative Revolt for inspiration.
If you’ve got a nice steady flow of traffic and have built up a name for yourself, you might be able to sell advertising space which can add a nice boost to your income. The downside is that you run the risk of cluttering your website with adverts which could be a bit off putting for visitors.
So choose wisely if you go down this route. Weigh up the potential damage a load of ads would have on your traffic first to try and work out whether the revenue coming in from adverts would be worth it.
People love personal recommendations and will often trust them over a traditional marketing campaign.
If you gain a big following on your blog and have people who would happily take your advice, look into affiliate links.
You can get money from companies for writing about/testing out their product or service. You’d generally get a commission every time someone clicks through to the affiliate link and makes a purchase. A good example of this is on Elna Cain’s blog, with this post on how to set up a freelancing website with Bluehost.
While some of these examples of passive income might not seem like the sort of thing you expected to be doing, there’s no harm in adapting. Anything you add to your skills and income sources is only going to strengthen your marketing efforts, your financial situation and your brand.
What passive income generator are you thinking about trying? Have you ever had any success with one in the past? We’d love to hear your thoughts!