It’s a common problem when you freelance/consult. You have a group of good paying clients. Life is rosy. Invoices and cash are coming in. Bills and expenses are paid on-time.
Until you reach the famine period. Where the work dries up. And you are stuck trying to figure out how to make rent/lights next month.
So you start “rainmaking”. You call evvvvvverrrryone and their brother. You spend hours on social media and jumping into groups to get a new client. You find one person willing to hire you. But they will only pay you half of your normal rate. Citing their own cash flow issues. You sense that you might need to spend a good deal of time working on the project. But at least it would be some cash in the bank.
What do you do?
Here are a few ways to help you decide:
Are you asking the right questions?
Most people tackle the cash flow crunch asking this question: Do I make money this month? But they miss other key considerations like:
Do I have a bigger vision for my company?
- Does this client fit into the vision – ie. type of client I want to work with, types of projects that will strengthen my experience?
- Does the testimonial help you land new business?
- Or is it just a chance to fill an immediate need?
Do I have a marketing strategy in place?
- Is this a one time opportunity?
- Or will I be scrambling next month when I finish this work?
- What can do I do now to better market my business for the future?
Am I investing time and money to work on my business?
Do I have metrics so I can measure what is working and what is not working?
- Do I have a marketing plan?
- Do I have a sale plan?
Do I have a financial plan?
- Did I know that this gap would occur?
- Or am I running daily on “Jesus take the wheel” prayers?
These questions are not a judgment call. Every business deals with cash flow challenges. But challenge yourself to think deeper than the surface “I gotta pay the bills”. No matter how pressing it may be.
One of the best things about being an entrepreneur is that you get to choose. It’s YOUR business. You decide what your goals are. You select how you want to market your company to highlight your strengths. You choose the business model that suits you best.
So take the reins and choose.
If you choose yes, get as much money up front. Be clear in your contract agreement
If you say yes, think about how to set favorable terms on this project. You want to develop this as stop-gap rather than starting a new long term client relationship. Because they might not be a good long term client. Which is often what happens when you lower your rate and are desperate.
So think through your terms. I’ve got 2 to get you started:
Negotiate as much money up front as possible.
While you typically might ask for a third or half deposit, I recommend you raise your percentage. Ask for 60%, 80% or even full payment in exchange for discounting your rate. Be clear that this is a one time opportunity and not your typical rate.
Have the client agree to terms that are favorable to you
You know what happens when a girl or a guy is “uber” desired by their mate? They dictate the relationship.
Even though you may feel the pressure, make sure that the agreement is favorable to you and your business. Make a few concessions to prove your commitment to working with the client. And of course, do an excellent job on the final submission.
But don’t be shy about laying specific terms that ensure your time and expertise are valued.
For example, you might put a limit to the number of meetings outside of regular project updates. Or you might offer only 1 or 2 revisions and outline your hourly rate for additional revisions.
If you have a few pennies stashed away, have a lawyer review your agreement/contract. Make sure there aren’t other areas that you are missing.
And if you need help thinking through these ideas, ask your mentor or coach. You want to make sure if you do the work that you don’t feel depleted or even more drained after you receive the check.
Finally, schedule marketing time on your calendar.
One of the best ways to prevent client famine in the future is marketing.
Build a standing appointment into your calendar that keep you honest. Draft a plan that is easy for you to follow – whether you are super busy or have a ton of time on your hands.If you are not sure what to do, hire a coach to get suggestions based on your personal strengths.
And be CONSISTENT.
Yes, marketing may not come easy to you. You might have make alot of mistakes to determine the best strategy.
But make it a regular part of your business. Make sure that it will allow you to showcase your wins, share what makes you different, and nurture leads.
These are a few ideas that you need to consider when you get presented with this tough question. I challenge you to talk with your business coach and mentor if you run into this challenge.