4 Ways a Freelancer Can Build Healthy Recurring Income

Planning for future income is always a winning idea.

Freelance life can be sweet, but there is a certain amount of uncertainty to it when it comes to managing income. The one thing conventional jobs offer, it’s a predictable income.

When you go off on your own, you’re in charge of what money comes in. Therefore, it makes sense to try and make that as predictable as well.

The best way to do that is to create streams of recurring income — income that comes in regularly that you can rely on when other business is slow.

Easier said than done?

Here are four methods you can explore or try to implement right away.

Fixed-fee services

Some clients will have pretty simple needs but are too busy to go back and forth on negotiating rates.

If your client needs blog posts and they’re usually of the same length and scope, offer to do their blogs for a fixed rate you can live with. If they need e-mail marketing or newsletters, offer these as fixed-rate services as well and give them a menu of services they can order from with prices already set and parameters already established.

The easier you make it for a client to work with you, the better.

The only word of caution here is not to get sloppy or lazy. If you start taking these sorts of set jobs for granted and fail to deliver your best work, your client will have second thoughts about what they’re paying for.

Think about it like a restaurant. The menu makes it simple to decide on, say, a club sandwich, but if that sandwich is poorly made, that customer will go elsewhere next time.

Negotiate a retainer

This is my favorite way to make sure the income is rolling in. Unfortunately, I’ve only managed to do it a few times, but each of those client retainers lasted several years.

Simply, a retainer is an agreement between you and the client wherein the client pays a fixed sum — usually monthly — for your services. It’s best that you already have a solid idea of their needs and how much work they’ll average per month.

One client I had for whom I put together a series of film books would give me two books one month, no book the next month, one book on the third month, then another on the fourth. This averaged out to a book per month, for which the rate we agreed upon was fair. That one month had twice as much work as other months was fine with me. I knew my capabilities and schedule, and I had that book-free month still paid for.

Another client currently pays me a monthly retainer for his advertising needs. Some months are heavier than others, but it works out the same in the end, and I know I can count on a certain amount of income from that client.

Don’t start off asking for a retainer. You’ll need some time to build some trust and to get a better handle on what that client’s needs will be like. When you think you’ve managed both, make your pitch. Sell it as an easier way to manage invoicing.

Work for an agency

There are good agencies and bad ones. While Glassdoor reviews help somewhat, you may not have a natural feel for which agencies are worth your time until you’ve done a few jobs for them. Too many agencies rely on the lowest rates they can manage, but there are some gems out there who pay pro rates or higher depending on the quality of your work.

Obviously, you want one of the gems. That said, it’d be disingenuous of me to admit that you’ll likely work for a few bad ones first. At least you’ll learn what to watch out for.

However, when you are working with a good agency, you’ve just made managing your income stream a lot easier. Instead of hunting for individual clients, the agency assigns them for you, gives you the job specs, often handles the editing duties, and makes sure you’re paid — usually on a dependable monthly schedule.

Note that you may not get a byline. This is work-for-hire. While one agency I write newspaper and magazine features for gives me a byline, another agency that has me writing blog content gives the byline to one of their in-house people.

Create a product

Write a book. Establish a subscription-based newsletter. Create a video series. Put together a webinar on a subject you have expertise in.

This is you being your own client. Once you have something to sell, you can put it out on the marketplace and let money come in.

I don’t like to toss out the term “passive income” readily, however. The trick to this is finding and/or building an audience for your product. You’re going to have to do a bit of marketing work — so it’s not entirely passive income.

Still, if you’ve got some marketing talent (or can hire some yourself) and manage to get a good-sized audience started, the rest gets easier over time, and the income potential grows.

The more products you create, the greater the income, and if your product is evergreen enough, that recurring income can last for years. I wrote some chapters for a book 20 years ago and still get royalties to this day. They’ve tapered off a bit over the years, but the yearly royalty check is still enough to be a help when it’s time to pay the bills.

It’s nice to be able to depend on an income

One of the hassles with freelance life is the feast-or-famine aspect of it. It makes budgeting a challenge, and there is always the stress of where the next job and paycheck are coming from.

You can save yourself some of this angst by looking into avenues for recurring income.

In an ideal situation, you’d be building recurring income until it’s the central portion of your overall income.

But you can’t get there until you start now.

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