Back when we laid out our list of 10 Reasons Businesses Fail, we promised to talk a little more in-depth about some of the issues on that list and to possibly offer some suggestions.  So far, Tamara has shared how she manages to keep our business records in order (reason #6) and has talked about how she feels about competition (reason #3).  Today, I’d like to tackle the topic of dependence (reason #9). 

Landing your first big client has got to be one of the most thrilling moments a freelancer can experience.  It could have been as simple as writing a quick bid on an advertised project, or as complex as creating a multi-page proposal with sections and sub-sections.  Once you receive the acceptance, though, it’s time to party! 

It’s tempting to start spending the money in your head, long before it’s ever actually arrived.  Getting that big gig might mean that you’ll be able to catch up financially—or maybe even get ahead.  Visions of a computer desk that isn’t falling apart may begin to dance in your head.  (Oh, my.  The Holidays must be coming.) 

The next step, of course, is to actually start the project.  You may discover that it’s harder/bigger/boring-er than you expected it to be.  Still, those dollar signs can hopefully keep you motivated.  Whether it’s tons of fun, or you just have to slog through and get it done, you’re still most likely thrilled to reach the finish line and get that big, fat paycheck. 

So, what happens when the check never comes?  Actually, I’m not really offering advice on this one, as I’m currently in the process of trying to figure out what happens when the check never comes!  My situation, however, is based on previous employment and hasn’t been a result of working through Berry-Brewer Agency.  Still, I think it’s applicable, as I had plans for that money, just as you probably do for the money your clients have promised you.  Since hindsight is 20/20, I can at least offer some suggestions on how to make sure you don’t end up getting hosed:

• Make sure the client is “for real.”  If you’re on a bidding site, check and see if they have received feedback from other freelancers.  Ask them some questions to determine how serious they are. 

• Have a signed contract between you and the client.  We’re actually in the process of working with an attorney to develop some sort of company standard for ourselves in this area.

• Negotiate for a certain percentage up front, especially for bigger deals.  It’s fairly common for freelancers to require 50% up front and 50% upon completion.  I’ve also seen freelancers negotiate for three payments during a project.

• Don’t be afraid to say no.  If something just doesn’t feel right, there could be a reason for it.  It’s smarter to miss out on the occasional gig than to put in tons of work and still not get the money.

What about the client who is a dream to work with?  He sends you a nice, steady stream of projects and always pays on time.  He communicates clearly and always offers a pat on the back for a job well done.  If your freelance business was a teenaged girl, it would draw hearts around this client’s name on its notebook.  You’ve really hit the jackpot with this guy. 

First of all, good for you!  Enjoy.  Get as much out of him as you can.  Try to keep him happy and well-fed.  Never forget, though, that he isn’t obliged to support you.  His business may take a turn for the worse, or he might decide to work with someone else.  If this happens, then your freelance business will probably want to flop down on her fluffy bedspread and refuse to eat for three days.  You, on the other hand, have to be prepared to keep yourself afloat.  Some of the best ways to keep this one client from sinking the entire ship:

• Never let one client make up more than about 25% of your income.  If more than that comes from a single source, then losing that source can be devastating to your freelance business.

• Always be marketing.  It’s important to prepare for who will take this guy’s place if the need should arise.  If your customer base isn’t growing, your freelance business isn’t either.

• Offer great customer service so your client isn’t tempted to break up with you.  This does not mean that you should be a doormat, but the little touches really do matter.

Being overly dependent on one employer or one project is just too risky when you’re supporting yourself.  How can we be so sure?  Well, it is on the top ten list of reasons businesses fail . . .  

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