The frustration I hear most often about self-employment is the instability. Moments when there’s too much work and you’re feeling stretched thin. And less ideally, the lulls when you’re between projects and your cash flow slows down or dries up.
Frequently referred to as the “feast or famine cycle,” it’s the trap many solopreneurs experience when their income changes unpredictably from season to season. It’s not just a feeling. The self-employed face income fluctuation two-and-a-half times that of employees.
While you can’t remove all variability from your business or prevent every slow period, you can structure a solo practice with greater intention for longer-lasting stability and resilience. Here’s how.
Map your bandwidth
Minimizing the cycle of too much work or not enough starts by clearly defining your financial goals. What is the annual salary you want and need to earn in the short term, and what do you want to be earning over the next five to 10 years?
With your milestones in mind, map out your bandwidth in terms of the ideal number of projects you’ll need to take on in a given moment to achieve your income ambitions.
This might mean you’re coaching 10 clients a month, working on two consulting projects a quarter, or leading a skills workshop for designers on a weekly basis.
Knowing your income requirements will help with decisions like which kinds of projects are worth taking on, and how you should price your offerings.
“My biggest tip is to have a monthly package that is a high enough rate that most people who work with you won’t be able to invest, but a single client can cover your monthly expenses,” says Jillian Richardson, a LinkedIn ghostwriter and author of Un-Lonely Planet.
You’re aiming to quantify the right amount of work for you, so you’re not chasing after too much or coming up short working on too little. This requires experimentation to grasp the time, energy, and resources you need to commit to each type of engagement.
Look for meaning in your work too, beyond the financial rewards, as research shows enjoyment of what you’re doing is an “important protective factor against stress.”
React more confidently with pipeline tracking
Knowing when you’re at full capacity or it’s time to bring on more work happens with pipeline tracking—monitoring revenue you’ll earn and are projected to earn.
You can set up a pipeline tracker with a dedicated tool like a CRM or a spreadsheet to map the status of various opportunities across different stages.
Start simply by listing on a monthly or quarterly basis what projects you’ve landed, with their associated revenue, and potential projects you’re in the process of winning, with projected revenue. Through this process you get a better view of what you’re definitively earning and what you’re potentially earning in a given period.
You’ll know more precisely what’s happening with the business at the moment and what’s likely to happen in the future so you can make more informed decisions. The clarity lets you decide whether to pass on a project, tell the client that you’d be able to take it on later, or accelerate your business development efforts to attract more work.
Always-on business development
A rhythm that’ll protect you is a twofold approach: delivering work for existing clients and in tandem, taking consistent actions that generate business for the future.
It’s common to hold off on business development tasks until you’re between client engagements. This leads to scrambling to bring on more work at the last minute.
That’s not ideal as you’re operating from immediate necessity and less likely to be selective about what work you’re going after.
Plus, landing new opportunities takes time, sometimes weeks, months, or quarters to materialize, which could lead to a longer gap without pay.
The more calculated approach is always-on business development, where you’re taking reasonable actions at a weekly cadence to acquire more clients.
Whether that’s touching base with past clients, investing in marketing to earn visibility, or pitching yourself to relevant prospects, use your pipeline tracker to calibrate your efforts.
Committing to business development on a frequent basis can help continually move a project closer to a deal, preferably bringing it to fruition sooner for when you need it.
Earn income from multiple sources
It’s risky to depend on a single client engagement. If it ends sooner than expected, your cash flow stalls with it. Diversification is a safer bet.
“Embrace the portfolio career model in a way that’s sustainable for you. That means not relying on one source of income (whether it be one client or one way of serving clients), but instead having one or two ‘anchor’ clients who are on long-term monthly contracts,” says Janel Abrahami, a career coach, speaker, and creator covering the future of work.
“This way, you at least have some sort of predictable monthly income and can experiment with ways to bring in the rest.”
A portfolio career, a term coined by Charles Handy in The Age of Unreason, is when you’ve got a mix of work commitments and clients as opposed to one focus or salary.
The upside of multiple income streams is you’re still getting paid even when a project drops off or if a certain type of service you offer has only seasonal demand.
You’re better protected when your compensation is spread across different sources, as it’s unlikely multiple projects will end simultaneously or be affected by the same circumstances.
Diversifying isn’t easy, though, as you want to avoid spreading yourself too thin or overcommitting to a new area before it’s proven to be a worthwhile investment.
Stability as a solopreneur is a practice of using your goals as a road map, monitoring your finances, prioritizing business development, and accounting for the risks.
