It’s common knowledge that freelancing can be a rocky road, not just to success but to survival. Not having a steady or guaranteed income can be a worrying thought and can be the reason why some people never go freelance or end up giving it up.
One way of making freelancing working in a sustainable way is to market well, another way it to set up multiple sources of income where ever possible.
Benefits of having different income sources
Allows for breathing space
Freelancing is no fun when you’re worrying about how you’re going to be paying the next bill. The whole reason you went freelance was likely because of the freedom it offers.
Well the good thing about working for yourself, you technically don’t have a limit on the amount you can earn. Unlike a job that largely has a fixed salary, you can earn as much as you work.
Diversifying your income will make it easier to reach untapped markets so that if work in one venture dries up and you won’t be left broke.
Strengthens your financial position
This will be important should you ever need to apply for credit or a mortgage. Lenders have been very wary since the financial crash of 2008 and now require much more proof that you are in a position to pay back your loans. This means they’re far less likely to approve you for a loan if you’re earnings are a little shaky.
Having multiple streams of income will make your position stronger both for yourself and for any potential lenders to see. If it looks like your earnings are stable enough to live on comfortably and that your business is growing, then you have a far better chance of being approved.
So how do you set up multiple streams of income?
Different business ventures
There’s nothing stopping you (except time and energy) from looking at different business interests. There might be completely different things you want to do that don’t relate to your main freelancing venture. If you have the will and the organisation skills, you can set up multiple ventures alongside each other.
The important thing here is to not get too carried away and take on too much at once. It’s best to start small and get good at doing one thing before you expand and overwhelm yourself.
Keep a day job
While keeping a day job might be seen as a starting point or even a step back for freelancers, some freelancers are happy to keep a day job as part of their long term plan.
Many freelancers keep their day job in the beginning and then plan to go full time but that’s not a necessity. Keeping a job either full or part time will give you a salary that will make your freelance life run a little smoother and more comfortable.
Keeping a job might also help those freelancers who would otherwise miss the work environment and the interaction with co-workers. Freelancing at home can get pretty lonely, so having a day job might take some of the edge off this.
Offer additional services
Once you’ve set up your freelance business and are going steadily, you will want to start thinking about how you can expand. One way of doing this is to then start to offer additional services (for additional prices of course.) For example, if you blog for businesses, you might want to add social media management to your services that can then promote the website you’re writing for.
Being able to offer additional services that your clients might need will also set you aside from the competition. Just make clear what your services are and how they relate and differ from each other so that you don’t end up confusing potential clients.
One of the best ways to set up new streams of income is to work on creating passive income. This is income that builds steadily over time without you having to regularly do anything to earn it. This could mean from property you rent out, returns on investments or from a book you wrote and can continue to sell. Have a think of what you could turn into an asset that will sit alongside your business interests.
How to make this work
Get organised! It probably goes without saying that having multiple sources of income are going to need some good organisation from you.
You’re going to have to work out a solid system in order to deal with the workload and variety. The first thing you need to do here is work out how much time you can realistically spend on your business and any other side ventures.
So if you’ve still got a day job, you’re going to have to get creative with your time management and probably suffer one or two sleepless nights in the beginning while you adjust to your new workload.
It’s important to be realistic with how much you can actually take on and also accept that at some point you’re probably going to need to hire someone to help. Whether it’s an accountant, a virtual assistant or a fellow freelancer to help with marketing, hiring someone else might seem like an expense at first but will pay off in the end when your time is freed up to make more money.
Have you been relying on one source of income? Or do you have a few and have some tips for freelancers looking to do the same? Let us know your thoughts and tips in the comments below.