Tips for Maintaining a Stable Income When You’re the Boss

Whether you’re thinking about becoming self-employed or are already an established business owner, you’ve probably spent a few sleepless nights wondering how you’re going to earn a stable income.

The good news is that even in today’s gig economy, you can make a stable living. McKinsey & Company estimates that 20-30 percent of the working population practices some form of self-employment — and if it’s a viable career path for others, it might be for you as well.

There are six strategies that can help take the stress out of self-employment, and ensure that you are paid regularly.

1. Clearly define your work

Have a clear vision of the work you want to do and how you want to get paid. This will help you filter projects and clients, choosing ones that meet your self-employment goals. When you start out, make sure you answer these questions:

• What services do you want to offer? For example, if you’re starting a photography business, decide whether you want to focus on photographing weddings, portraits, or nature photography.
• How much time do you want to work? Decide exactly how much time you want to dedicate to your self-employment venture and commit to it.
• How often do you want to receive payments? Based on the weekly hours you want to work, choose your rate. It can be hourly, project-based, or a fixed monthly fee. There are pros and cons for each model, so be sure to weigh them before making a final decision.

Review these parameters every six months, and adjust accordingly as your focus or rates shift.

2. Invest and reinvest back into your business

Your brand is your business’s most important asset, so prioritize making it stand out. Investing in your brand today will help you build it into a stable business venture in the future.

In its initial stages, invest in a functional website for your business that includes a memorable domain name, an attractive design, and high-quality products (if you’re opening an online shop). Your site is the first point of contact that shoppers have with your services, so it should look stellar.

As your business becomes profitable, reinvest in team members who can help scale your business.

3. Write thorough contracts

Be sure to put everything in writing. Create contracts that cover your bases to ensure that you’re paid in a timely and regular fashion.

4. Build strategic portfolios

Being strategic about picking the clients you work with is key to creating a stable income. When building a client portfolio, be sure to:

• Diversify. Don’t let your income depend too much on a single client. Have at least two or three clients on board in case one contract ends.
• Pick long-term contracts. Prioritize long-term projects over shorter ones.
• Ask for referrals. Referrals are surefire ways to get profitable gigs.

5. Distribute your income wisely

When you’re self-employed, the exact amount of money you earn monthly may fluctuate. Fortunately, there are a few things you can do to create some stability.

Regardless of what you actually earn, set aside a specific monthly amount or percentage to be considered your “salary.” Anything left over can go into your savings. This way, you’ll build a cushion if a contract falls through. You’ll be able to pay yourself a “salary” straight from your savings.

When calculating a monthly amount for yourself, plan ahead and save for business expenses (like taxes), so they don’t take you by surprise.

6. Get organized

Time management is crucial for being a successful freelancer. Stay organized by:

• Using a project management application to organize your tasks and deadlines. Popular choices are Trello, Asana, and Basecamp.
• Setting specific work hours. A detailed work schedule will help you maintain a work-life balance and will give you a time frame for getting things done.
• Optimizing your environment for productivity. Dedicate a separate, distraction-free space that is just for work.

Be your own boss

Self-employment is both rewarding and challenging. To make sure you succeed as a freelancer, consultant, or coach, integrate these six strategies into your professional life to build a stable income that will support you financially as you develop and grow your business venture.