One of the trickiest parts about being a solo consultant or freelancer is trying to build steady income. When you’re relying on clients for revenue, it can be hard to know exactly how much you’re going to make from one month to the next. Thankfully, there is a way to ensure that your business brings in steady income, no matter the season.
Don’t Fall Into the “Work More / Earn More” Trap
When I launched my first consulting firm, I already had a couple of clients lined up. As time went on, and those projects wrapped up, I worked hard to find new clients. Like every self-employed consultant, there were times when my income was great… and other times when my business revenue was thin.
As I continued to grow my businesses, I fell into a common trap. I decided that the only way to make sure I had steady income was to work more hours. I figured that if I served my clients all day and sent out marketing materials all night, I was sure to have a steady income, no matter the market conditions.
As you might imagine, this led me to burnout. Sure, I was keeping my head above water, but I was exhausted from working day and night, weekday and weekend. There was no way I could keep it up.
Don’t Fall Into the “Hire More Employees” Trap
That’s when I came up with my next big idea… I would hire an employee. I was ambitious, and I wanted my business to grow… fast! Surely, four hands would be better than two. So, I started running the numbers. I soon realized that hiring a full-time employee would require me to increase my company’s revenue by almost 75% just to maintain the same level of profit.
There’s no way I wanted to commit to hiring an employee. I had gotten into consulting because I wanted more freedom with my schedule and the ability to chart my own course. Now I was working more hours than ever, and if hired a full-time employee, I’d be right back where I started… committed to a year or more of longer hours and more anxiety just to get us up to full speed. How could I generate the steady income I needed, while maintaining my freedom and independence?
The Secret to a Steady Income
That’s when I found the secret to making a steady income as a consultant: passive income. Up until that point, I had relied entirely on finding and serving clients… so called “active income.” This was income that required me to trade time for money each and every day. Passive income, on the other hand, is where you do the work once, and reap the profits for months or years to come.
When I learned that people were making good money selling e-books, webinars, and online courses right on their own websites, I knew that I needed to give it a shot. I didn’t want to give up working with clients (at least not yet). But client-based income comes in waves. I would sign-up two clients and have an influx of revenue, but then there would be a break until the next billing cycle. As projects were completed, I need to find new clients before we made more money. It definitely wasn’t a steady income.
By adding passive income to my business, I was able to smooth our revenue out. I created a number of e-books, webinars, and online courses to sell on my website… info products based on the work I was already doing as a consultant. (At the time, I was a political consultant helping candidates win elections. I turned this knowledge into information products that taught people how to win elections). These info products brought in a steady income every week. At the same time, I continued to sign-up clients, which provided another revenue stream. Instead of dropping to zero in between each client product, my income was now steady, with my stable of passive income products bringing in revenue.
Should You Ever Hire Employees?
Reading my story above, you might think I am saying never to hire employees for your business. Nothing could be further from the truth. There’s no one size fits all answer. It all depends on what your business goals are.
My goal in starting my consulting company was freedom and independence… that’s why hiring full-time employees was out of the question, at least in the early stages of my business. I did eventually hire a virtual assistant to handle customer service and other tasks for my company, and it worked out well. Hiring someone virtually doesn’t require you to have office space or other overhead and can be much more cost effective as you build up your steady income.
Of course, hiring a full-time staff is right for some solo freelancers and consultants. Even if that’s the case, I want to encourage you to build passive income products for your business. Doing so will go a long way towards helping grow your revenue and will even help you bring in new clients for your business.
How to Create a Steady Income of Your Own
If you’re a consultant or freelancer, the best way to create a steady income for your business is to build passive income by creating information products you can sell online. You have specialized knowledge that others are willing to pay for… now package that knowledge into products you can sell and build a steady income for a lifetime.
For more information on some of the info products you can build, check out our article 7 Passive Income Streams You Can Add to Your Business This Year.