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The Right Mix of Income Is Your Safety Net

The Right Mix of Income Is Your Safety Net

Financial safety nets are even more important for self-employed professionals than for others. Having a few months worth of income in a savings account or other liquid asset, as well as disability insurance, is a good goal.

But I think diversifying your income streams is even more critical. At a few different times in my self-employed career, I realized that more than 2/3rds of my income was coming from a single source — typically a major client.  While it can be nice to have  big retainer contract especially when you really enjoy the client, that kind of dependence can leave you vulnerable.

Back in 2006, when I was still primary working as a freelance writer and marketing consultant, I diversified my income streams like this:

  • Steady Clients — I had two clients that I worked for nearly every month.
  • Intermittent Clients — I had several clients who gave me a few projects per year.
  • Magazine Articles — I wrote articles for trade magazines.
  • Online Courses — I taught several online courses through my websites (business writing and writing nonprofit annual reports, at the time).
  • Tip Sheets — I sold tip sheets on various writing topics through my websites.
  • In-person Workshops — I taught workshops through the Duke University Certificate Program in Nonprofit Management.
  • Advertising Revenue — I ran Google AdSense ads on most of my websites.
  • Affiliate/Reseller Revenue — I ran ads for affiliate program products on most of my websites.

Today, in 2013, as my business has evolved, so has the income mix. Here’s what’s included now:

  • Webinar Series and E-Clinics— I offer a weekly webinar series with a subscription fee at Nonprofit Marketing Guide, and also teach webinars almost weekly at CharityHowTo. We also offer more in-depth online training via two-week e-clinics.
  • Mentoring Program — I offer a six-month group Mentoring Program for nonprofit communications directors.
  • Coaching Clients — I work with three clients currently, helping them work through marketing challenges and develop their marketing teams.
  • Public Speaking — I present more than a dozen workshops and keynotes each year, and am paid for almost all of them.
  • Book Royalties — I get checks twice a year from my publisher.
  • E-Books — We sell a few e-books online.

Think about ways that you can diversify your income stream to make sure your safety net is securely in place. It’s the best way to ensure that you can fully enjoy the self-employment lifestyle without worrying about paying your bills.