Thoughts On Revenue Diversification
When people ask me what I love about being a freelancer, I usually give some answer about the flexible schedule or time with family.
The truth, however, is much more practical — and rooted in worry.
My favorite thing about freelancing is that by diversifying the sources of my family’s income, I am reducing the likelihood that we’ll find ourselves without one.
I don’t talk about it a lot, but in mid-2012, I was let go from my job. It took me months to find a new one. (Thank you, NationBuilder, for taking a chance on me when I needed it the most.) In the meantime, I had to gut my expenses, sell my car, and move my wife and two kids into my parents’ house to make ends meet. It was a formative experience.
When I was young, my dad told me to know a little bit about a lot of things and a lot about a few. That was fantastic advice, and it’s served me well. Now, I apply that the same recommendation to my income: earn a little bit from a lot of revenue streams, and a lot from a few.
By diversifying my revenue across a variety of client projects, my risk of repeating that experience has been drastically reduced. If a prospective client doesn’t hire me, or a current client cancels a project, I have others to balance the load. And by studiously avoiding having any “mega-clients” (i.e., clients who pay the bulk of my ongoing income), no single client contributes enough to my bottom line that their loss would cripple me.
The one thing that could actually cripple me is a severe injury or change in my health. If I broke my hand, I could be unable to code for weeks. If I got cancer, I might be unable to work productively for months. That is an unacceptable risk, and no amount of savings will mitigate it entirely.
So, what am I to do? Diversify my income further. Today, the bulk of my income comes from custom NationBuilder website design projects. This year, I have plans to offer in-person training, launch an online course, and possibly even publish an ebook. The goal is to create a mix of active and passive income from complementary projects and services.
For me, this is not about freedom from work or the acquisition of wealth. Diversifying my revenue streams helps me and my family find safety by keeping our proverbial “eggs” in a variety of baskets. It’s worked so far, and I’m bullish on what leaning in further might yield.