Only 33% of Small Business Owners Make It 10 Years. So How Did These Freelancers Beat the Odds?By Tim Beyers July 8th, 2015
There’s a harsh reality of freelancing that people often ignore: few make it long term. According to data supplied by the U.S. Small Business Administration (SBA), only a third last 10 years, while only one quarter survive 15 or more years.
Despite this, I know quite a few freelancers who’ve been in business at least a decade—yours truly included. And according to our most recent study, two-thirds of freelancers plan on continuing for 10 or more years. Clearly, there’s a discrepancy here: Most want to freelance for a long time, but only a small amount can actually make it work. So do these survivors beat the odds?
I interviewed a bevy of veteran freelancers who’ve been at the game for at least a decade and found that a willingness to do anything to keep freelancing was the most common connection. Beyond that, here’s a closer look at what the specific steps they took, distilled into five tips for staying sane and solvent for the long haul.
This month, Linda Formichelli celebrates her 18th anniversary as a freelancer. And her business looks much different today than it did at the beginning of her career—no longer just a writer for print magazines, she now coaches writers, develops and teaches courses, and sells e-books on the business of writing. She has a lot going on, and that diversification helped boost her income by over 35 percent last year. It’s also how she stays motivated.
“If you diversify and you have a lot of different things you can do, different types of writing or different things related to writing, you can go back and forth depending on what you’re feeling,” Formichelli said.
Michelle Goodman, author of two books on freelancing—The Anti 9-to-5 Guide: Practical Career Advice for Women Who Think Outside the Cube and My So-Called Freelance Life: How to Survive and Thrive as a Creative Professional for Hire—told me she’s made it beyond 20 years by not just diversifying tasks and clients, but by organizing them as well.
“Do different things on different days,” she said. “Maybe do calls on one day, writing on another day, appointments on another day. Also, try to schedule the writing when you’re freshest. All the correspondence and calls can come afterwards.”
In 2011, Harvard University scientists found that sleep deprivation cost U.S. companies $63.2 billion in lost productivity each year. As freelancers, we face the same problem. Too often, I’ve spent hours battling to meet a tight deadline, only to crash later and lose time I needed for other projects—creating yet another rush to the finish line. Only recently have I come to see the folly in this approach, and I’m not alone.
“When you’re busy, it’s so easy to sleep less and skip the workout,” Goodman explained. “I’m trying to not do that anymore, because you can be more productive and get more done when you’re awake and not in that weird, sleep-deprived agony where it’s taking you three times as long to write a sentence.”
Keep expenses low
In 15 years of freelancing, Jarrod Thalheimer has learned that there is no substitute for spending less than you earn. “If I required a Jaguar or a private jet or several mistresses to find happiness, then I would suggest freelancing is not the greatest choice of career. Maybe investment banking or politics,” he said.
Formichelli and her husband, who is also a freelancer, sit down at least once a year to review their spending and decide on a monthly benchmark. Extra income is stored away for the down months that always seem to follow. She’s also recently hired an accountant and financial planner to help with managing the growing diversity in her business.
“If I required a Jaguar or a private jet or several mistresses to find happiness, then I would suggest freelancing is not the greatest choice of career. Maybe investment banking or politics.”
“You just have to be really smart about the way you budget and spend your money because if you have a really good month and blow it all, you’re going to panic and convince yourself you need to get a job,” Formichelli said.
Be nice, stay professional
Networking is key to getting work in any field, but according to 10-year veteran Aly Walansky, freelancers need to go a step further and actively support their peers. “Sharing and appreciating the work of others is the best way to get them to do the same for you, and it’s also a way of staying in the game to know of new and future opportunities,” Walansky explained.
Formichelli told me she landed $60,000 of new work over a four-year stretch because of referrals from fellow freelancers. Connecting regularly made the difference. And being nice to clients didn’t hurt either. Formichelli’s most famous work—The Renegade Writer, co-written with Diana Burrell—resulted from staying on good terms with an editor at a low-paying trade magazine.
The gig ended when Formichelli raised her prices, but the relationship remained strong enough that when the editor took over a company that published books for freelancers, she was among the first called to submit ideas. “It basically launched my whole career as a writing coach,” Formichelli added.
Go where the money is
While it sounds obvious, being willing to take the gigs that pay well—or that pay at all—is the key to sticking it out as a freelancer. Thalheimer has always made sure to accept more than he declines. As a result, he has had “lots of jobs that I never would have sought out or even knew existed.” His more unusual gigs include re-working a film script for a caterer trying to break into the movies, promotional materials for an African shaman, and writing and directing a belly-dancing instructional video.
Linda Childers told me that, in 17 years of freelancing, she’s twice found gigs paying more than $1 a word through Craigslist, which is unusual when you consider the site’s reputation for listings that may not even offer $1 per story. “I think most writers have searched Craigslist at one point or another. I compare it to shopping at TJ Maxx—you have to sort through the undesirable stuff to find the gems,” Childers explained.
Having so many options for finding work and making a living can make it easier to press on during the down times. Also, in some respects, it’s safer than the alternative.
“Say you have 10 clients, if you lose one or even two clients, you still have a bunch more,” Formichelli said. “If you were working a W-2 job, any time for any reason, your boss can completely unplug 100 percent of your income. The notion of a stable, reliable, predictable W-2 job, I don’t think that exists anymore.”
Perhaps not. Either way, for me—now one-third of the way into my second decade as a self-employed worker—it’s just another in a long line of reasons to keep on freelancing.
Image by Blojfo