Smooth out the feast or famine cycle
One of the biggest issues I’ve seen that consistently holds creative business owners back (and plenty of other businesses for that matter) is the Feast or Famine cycle.
Most creatives have experienced the feast or famine cycle in some capacity or another: too many projects happening at once, or crickets chirping which makes us nervous, so we take on projects that don’t really make sense for our business out of financial desperation.
Conquering the feast or famine cycle doesn’t happen overnight, but here are a few ways you can start to smooth out that cycle, and reduce the extreme highs and lows.
1. Raise Your Rates
I see a lot of creatives who are operating their business at a loss, but they aren’t even aware. They have money come in, and money goes out, but they haven’t truly crunched the numbers to figure out how much they need to earn at a minimum to pay their bills, pay themselves, and leave some equity in their business.
They’re undercharging on projects, and their business is taking a hit because they aren’t accurately tracking things like administrative time, trouble-shooting, new business development, and marketing.
I’ll be the first to admit that a lot of my business decisions tend to be based on what feels good, but in order to make smart decisions about your business, you have to have all the information first.
If you’re feeling the “feast or famine” in your business currently, it’s likely that you aren’t charging enough to leave a buffer for when work slows down. If your pricing is based on an hourly rate that assumes you’ll be working an 8hr day, you’re going to be stretching yourself too thin. (Most people forget to factor in vacation time and holidays as well!)
- Is there room to increase your current rates? (Whether project-based, hourly, or value-based?)
- Is there room to shift the way you charge your clients?
- How could you provide more value to your clients, to make it easier for them to pay your new rates?
- Could you increase your rates and reduce your workload so you earn a little more while working a little less? With that free time you can now start to work on your own business operations, marketing, etc, and not be making business decisions out of scarcity.
This leads us to:
You want to diversify your clients, revenue, income streams, and marketing.
If all of your business comes from one type of work, one type of client, and through one type of marketing, you’re taking a big risk. If one client disappears, one social media platform changes its algorithms, or one source of income dries up, you’re starting from scratch every time.
Consider how diversifying your payment methods can make things easier for you in the long-run. For example, I have some clients that pay me a monthly retainer, others pay a project fee, some pay hourly, and some pay based on a revenue share of product sales. There is also affiliate income, joint ventures, and product sales.
Monthly retainers allow me to project my income over a longer period of time, which makes it easier to allocate my time and resources.
Project rates allow me to experiment with my process and speed of delivery (aka, work faster without being penalized financially).
Value-based pricing models allow me to price based on the return on investment I believe I can get for my client instead of charging for hours spent. If you play your cards right, this can be a mutually beneficial situation for both you and your client.
Affiliate income allows you to earn money on products/services that you recommend with minimal effort. I do this for hosting and a number of other small products and software, and with minimal effort I’m able to get multiple services for free, and still make a few hundred dollars a month.
Products like ebooks and courses can be a great way to introduce people to your expertise and earn some extra cash.
Joint ventures can help you grow your audience by tapping into someone else’s. I’ve done work in exchange for a share of product sales, which can be a creative way to earn more revenue if you believe in the success of a person/product. (Could you pitch a client that doesn’t have a large budget on paying a % of the project up front in cash, and the remainder in the form of revenue share?) How about running a joint webinar? Get creative!
Consulting can be a quick/easy way to make money without a long-term commitment.
Could you take all the questions you receive from your clients and turn it into a product? A course? A guide?
Can you leverage that information and training to establish yourself as an expert in your field?
Make your content and time spent training do double duty for you, by using it in different ways (blog posts, guides, freebies, training libraries, etc).
Participate in Gumroad’s Small Product Lab if you need an extra kick in the pants. It helped me finally launch my ebook, Think Like a Digital Strategist (in 10 days!!), which won an honourable mention. Even a handful of Digital Strategy School students who hadn’t previously thought they had anything to offer were able to launch their first digital products this way! (helloooo, extra cash!) Curious about what they were able to create? I wrote about that here.
Another thing to diversify is how people find you.
Are you relying on one method?
There’s search engines, word of mouth, directories, strategic partnerships, content marketing, one on one connections, social media, in-person events, guest posting and interviews to name a few. What works for one person won’t be what works for the next, so be willing to experiment, diversify, and track the results.
3. Streamline your processes
Most creative business owners are great at doing the creative work, but they haven’t streamlined their business operations. When work slows down, consider using that time to clean up your workflow and admin/operations.
The easiest way to give yourself a raise? Get 5 – 10% faster at what you do (assuming you aren’t charging hourly!). That means using keyboard shortcuts, templates, canned responses, scheduling software, Photoshop actions, and software that simplifies your workflow, to name a few, depending on your services and products.
I see creatives answering the same questions over and over again for their clients (and with great frustration). Start compiling your answers in one place, whether it be your Welcome document, an FAQ page, blog posts etc. Don’t write the information only once via email. If you get asked the same question more than once, it’s time to start creating some documentation.
Tons of processes can be automated using IFTTT and Zapier; are you taking advantage of them? Contracts that automatically redirect to a scheduling link and Paypal payments that result in an automatic email with a welcome document are just a few things you can begin to streamline. When work is slow, take the time to start building more ease into your processes.
4. Improve your marketing/outreach efforts
Often people are so afraid to reach out when work is slow, but the best source of new work is other creatives. Most creatives I know either have waaaay too much work on their plate, or way too little! I see very few people somewhere in between. Sometimes all it takes is letting your peers know that you have availability.
This can even include getting in touch with past clients, which is one of the most overlooked aspects of client services. Do you have a follow-up process for your clients? Do you offer your clients a way to continue working with you after a project has wrapped? What would make it easy for them to do so?
There are so many creative ways to offer services to your clients post-project: monthly check-ins, strategy sessions, SEO insights and reports, social media training or assessments, and even monthly curation of resources. What ways are you potentially overlooking new possibilities? It’s much easier to work with existing clients than to find new clients month after month.
My personal approach? Always delight my current clients so they want to find ways to keep working with me!
5. Offer a better return on investment for your clients
When you can demonstrate to your clients how they will get a return on their investment from working with you, it makes it much easier to command higher rates.
If you’re new to providing more strategic advice to your clients, practice with your current or past clients. Let them know that you’re building up new services, and would be willing to offer them a discounted rate in exchange for a case study or testimonial.
Or go out of your way to provide them with some additional insight. Even the smallest effort (with a little documentation) can go a long way, especially when they aren’t expecting it. You gain experience, they gain strategic insight; it’s win/win.
You don’t just want to sell “website design,” to your clients, you want to sell revenue generating tools (and yes, a website can be one way to do that!).
Can you show them a simple social media strategy to help them make more traction?
What about ideas for an email auto-responder series?
Could you help them identify new marketing opportunities, or even product/service ideas?
These sorts of activities were things that allowed me to start moving beyond website design, and into being more of a strategic partner for my clients. They saw that I had their best interests at hand, and their success reflected upon my success. It has allowed me to start commanding much higher rates on my projects, because I’ve earned my clients’ trust with tangible results. (This is also the reason I created Digital Strategy School!)
SO, which of these resonate most with you?
Are you seeing some opportunities in your own business for improving your cash flow?
Or perhaps you’ve already found ways that have helped you create more income stability. If so, I’d love to hear!
Digital Strategy School Retreat is happening Oct 23-25th in Vancouver BC. Curious? Learn more.