Illustration: Oscar Ramos Orozco

Why You Should Treat Your Freelance Portfolio Like a Stock Portfolio

You can think of freelancing as volatile and risky, or as flexible and opportunity-rich. Doesn’t having multiple sources of income and multiple moneymaking skills sound less risky than putting all your eggs in one employer’s basket? Freelancing lets you shift gears when the world does.When you look at freelancing that way, the question becomes not “How can I keep the ups and downs from happening?” but “How can I ride the waves?”

Enter the Freelance Portfolio.

Your Freelance Portfolio helps you balance the risks and rewards of your freelance life, just like a financial portfolio. It helps you weigh how much time and energy to “invest” in projects, and change the mix depending on the work market and your income needs. It lets you decide how work fits into your plans, not the other way around.

You want to balance your Freelance Portfolio so it meets these three goals:

  1. Have enough clients of the right kind: not too few and not more than you can handle, who pay well and/or can advance your career in some way.
  2. Bring in enough steady income to reduce cash flow highs and lows.
  3. Meet your total income goals.

The Freelance Portfolio has four levels:

Level 1: The Blue Chips

Your Blue Chips are the core of your Freelance Portfolio. Like blue-chip stocks, they’re your buy-and-hold investments: major clients (large or small in size) that you maintain and monitor carefully as sources of regular income.

They’re your income anchors. Blue Chips are your hedges against marketplace rock-and-roll. They keep the lights on. They are your priority.

Level 2: Growth Investments

This is the growing edge of your business and your Blue Chip incubator. The gigs turn over faster than Level 1 and generate income by their volume while enriching your client base. The more you nurture Level 2, the more it can stabilize your career.

You’ll get Level 2’s from client referrals, other freelancers, and your own prospecting, so it’s about networking. Over time, as you expand and refine your strategy and bring in more and more projects, your net return will be positive.

Level 3: One-Shots and Long Shots

These are opportunistic gigs that fill time or income gaps (as in “I need money now!”) or let you make the gig-getting aspects of freelancing more plug-and-play.

Level 4: New Ventures and Growth

Level 4 is in some ways the most speculative part of your Freelance Portfolio, but it’s also the most exciting. Here, you’re building the services, products, and alliances that will bring income in the long-term future.

These are ventures you’re creating on your own or with others: developing a seminar, pursuing speaking gigs, teaching classes, writing a book, collaborating to offer expanded services. As one freelancer said, “A huge factor in my staying in business was that I’ve reinvented myself many times while staying in the same industry.”

How to Balance Your Portfolio:

Imbalance: Your pipeline’s full, you’re working like crazy, but barely making ends meet.

Rebalance: Reassess your portfolio for Goal 1.

Imbalance: You’re making a decent income, but the payments are so far apart you struggle to meet your monthly expenses.

Rebalance: Focus on Goals 1 and 2.

Imbalance: You’ve got some great clients and gigs, but the money’s lousy.

Rebalance: Retuning all three goals may be necessary.

With a balanced portfolio, fits and starts in work can be balanced with other prospects and possibilities that are quietly simmering. If a project gets back-burnered or a client pays late or fades away, the freelancer is more likely to be able to quickly turn up the heat and land a gig or two to fill the gap.

A solid Freelance Portfolio enables you to focus on what matters: doing your best work and honing your craft. There may still be dry times, but odds are they’ll be fewer and shorter. Your portfolio also lets you see holes and change your goals—whether it’s landing or replacing a Blue Chip, growing your network, picking up a new skill, increasing your cash flow, or building your future with new products or services.

How about you?

How do you balance between different types of clients?

Sara Horowitz

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Sara Horowitz founded Freelancers Union in 1995 and is the author of the book The Freelancer's Bible. She lives in Brooklyn with her family.
load comments (10)
  • Lexi

    As a freelance writer who faces many of these problems, this article is invaluable! Thank you.

  • Dan Garner

    I don’t.

  • sthrendyle

    This is generally good advice, but it suffers from some real-world circumstances. a) Before you begin freelancing, you should not only be debt free but have six to eight months’ worth of income saved up AND a couple of blue chip clients in the bag. You might spend years (and years) at your day job, getting this nut together. Then, of course, there are the health benefits and retirement to take care of; employers won’t be ‘contributing’ to any kind of plan, though of course there could be social security and medicare when you’re 65. Finally, I think all freelancer writers, er, communications specialists, need to recognize that communications/PR/marketing etc are where companies are cutting back. Often, programs just plain ‘disappear’. Ideally, and this is a great tip, you do want to upgrade and upsell your level 2 clients (great way of thinking about it and analyzing your clients, btw.

  • Anushka

    Definitely a start! Thank you from a New gradutate!

  • M @StyleSizzle

    Great article. I wish I had read this the very first time I freelanced, it outlines pretty much all the mistakes I made and figured out on my own the second time around. It really is about creating a balance with those steady clients and other gigs here and there.

  • Caroline Leopold

    Level 3 opportunistic work is my downfall. It’s like a drug. It sounds like a great idea to do that rush job for a client I’ll never see again, but I’m neglecting the work of acquiring more steady blue chip clients. Sometimes I find it easier to do the freelance work, rather than build a sustainable business.

  • Sari Delmar

    I am the same, always quick to jump at new opportunities even if we can’t necessarily handle it yet and need to spend more time on the blue chips !

  • Sari Delmar

    Great article but I have a few questions – what is the article suggesting is the correct balance? Is there one? Is it that all 4 levels should have equal representation in your workload and client roster? Or should the goal be to mostly have blue chips? What is the ideal balance?

  • Sean Blanda

    The goal is to balance according to where your pain points are. So if your income isn’t as steady as you’d like, chase some blue chips. The book has much more detail here.

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  • HomoSapiens

    Too much theory…

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