Susan, a freelance web designer, came to me recently searching for a way off the freelance rollercoaster. Like many entrepreneurs, when it came to bringing in new work and lead generation it was either feast or famine for her.
At times she was overwhelmed by the amount of business coming in, and at other times there were weeks when nothing was happening. Revenue was so unpredictable she was worried that she couldn’t make a predictable living at what she loves to do.
The question was: Why was her business so scattershot?
When we talked about Susan’s business it became apparent that the unpredictability of her revenue started with her clients.
She had worked with many clients over the past three years, but for the most part each of those interactions had been one-time gigs. That meant that to keep the work coming in, she had to spend a lot of her time chasing the next lead—and when that deal didn’t manifest, her revenue stream ran dry.
The key to stabilizing her cash flow was to stop relying on one-off deals and find what I call ‘anchor’ clients — clients who provide predictable monthly work and income.
The key to stabilizing cash flow was to find what I call ‘anchor’ clients — clients who provide predictable monthly work and income.
As I explained to Susan the key to predictability is to diversify your client base and not just focus on generating leads but generating quality leads. Instead of relying on a carousel of one-time clients, work to find a more stable mix of ‘anchor’ clients, semi-regulars and a few one-offs.
In her case, an ideal mix would be three or four anchors, a handful of semi-regulars and the rest would be one-time jobs that she takes on when she can.
Susan’s obvious next question was, “Sounds great. But how do you get those anchors?”
The first step is to be clear about who you’re looking for. A one-person shop might not be able to land a major bank as an anchor. But there are firms with needs a freelancer can meet—the key is to be clear about what they look like.
In Susan’s case, her ideal clients were small tech firms with less than fifty employees who had no in-house design staff—but did have a marketing VP, a need for ongoing design for their digital marketing campaigns, and had the ability to afford her.
Now that you know what type of client you’re trying to attract, the next step is to build a portfolio that speaks to that specific market. That means showcasing examples of the type of work you have done that would solve the common problems your ideal clients face.
Susan reviewed all the work she had done over the previous three years and picked pieces that showed off her ability to create memorable, professional brands for small tech firms. Importantly, Susan also came up with a new pricing structure based on clients retaining her to do ongoing design work for a monthly fee and she communicated this new costing in all her marketing materials.
Find other freelancers in fields in which you work who can introduce you to their clients. And remember, introductions work both ways. Look for clients you have worked with who would benefit from working with other freelancers in your network. Your anchor client might be another freelancer’s one-and-done, and vice-versa!
Your anchor client might be another freelancer’s one-and-done, and vice-versa!
Susan reached out to experts she knew in SEO, content development and management and digital marketing. She described to them the type of ideal clients she was looking to work with and asked for introductions. In return she offered to introduce them to her clients who fit their ideal client profiles.
In many cases you can turn some of your previous clients into anchors by identifying clients you have already worked with who match your ideal client profile, and booking meetings with them to present your new approach. In those presentations make sure to offer concrete solutions to problems you know they have.
Susan reviewed her client base and compared each client she had worked with against her ideal client profile. She found five that were pretty good matches and booked meetings with them to share her new portfolio and suggest ways in which they could work together to meet their ongoing marketing needs on a retainer basis.
When I met Susan six months later she was thrilled. She’d turned two of her existing one-off clients into steady anchor clients. And, through introductions from her circle of contacts, she had found two more potential anchors.
Now her client mix was much closer to the ideal. She spent less time chasing new business, and she found that, not only were her workload and revenue much more predictable, but she was bringing in more income than ever.
Does your small business have anchor clients, or do you struggle with a constant revolving door of one-hit-wonders? While finding new clients and losing others is a reality all small business owners should prepare for, you can mitigate against any long term damage by nurturing and maintaining a stable roster of ‘anchor clients’.
How do you find yours? Let us know in the comments below!
This is an archived post from the FreshBooks Blog and was originally published in September 2015.