This Wednesday, May 25, David Holloway will be teaching a Hired Guns Academy class on How to Develop a Portfolio Career. Below he explains how this method can remove the ups and downs that come with a typical freelance career.
“Freelancing” is one of those amorphous terms that mean different things to different people. So here’s what I mean when I use the word: Freelancing is where you’re primarily working alone, using one main skill to generate a service offering that you are deploying outside of full-time employment. For example, photographers, graphic designers, social media consultants, and independent marketing professionals are often freelancers.
The freelance career approach can definitely work, and if you’re in a good place with it, more power to you. But in the coaching work I do, I constantly hear about three main challenges with this type of career:
- Because freelancers often focus on one main skill area, they are vulnerable to changes in the marketplace–a steep revenue drop or the appearance of a new competitor, for example. When you’re only “eating what you kill” and you only eat one kind of food, some scary scenarios are possible. Consider the vulnerability of freelance writers, already struggling to make sufficient income, who are now being forced to compete with online writers who contribute work for a share of ad revenue–or who even write for free. This challenge seems to be growing by the day, and there’s no end in sight.
- Single-service freelance efforts don’t usually scale well. Why? Because it’s all about you, and that’s not necessarily a good thing. You’re the only one the clients want. Unless you commit very heavily to your service by forming a company, renting an office, hiring employees, and seeking funding (which, I would argue, sounds more like “entrepreneurship” than “freelancing”), then what’s your payoff strategy? Where’s your “yacht” coming from? Who’s going to buy you out if it all depends on you? (And, in the meantime, how do you ever get a proper vacation?)
- What will the future look like, and what if you need a change? Although your freelance offering may change subtly over time, it’s likely to remain fundamentally the same, which means you’re at risk of becoming stale. If you’re strategic about your career (which I’m hoping you are), then you’re thinking for the long term, wondering about the future of your clients, your markets, and your own needs. In twenty years’ time, are you going to want to be doing the same thing you are now? If not, how are you going to move to something different and satisfying? What’s your plan?
A well executed portfolio career builds on the foundation of freelancing and helps fix these problems by adding diversity, synergy, and security through flexibility.
- Diversity. You multitask in your life, so why not in your work? If you’ve already jumped from full-time work, you are probably not the kind of person who wants to do the one thing for the rest of your life. So why do it? A single-service freelance approach risks limiting you. In a portfolio career, you may have one core skill set, but you’ve thought carefully about the different services, markets, and clients that can be derived from that and you’ve gone out to find a variety of revenue streams. The diversity of your work, apart from many other things, helps keep things interesting and engaging.
- Synergy. You can get more results from your efforts by carefully crafting your service offering so that each one supports the others. You’ll want to consider expanding your network, learning how to leverage, ways to up-sell or cross-sell, and methods to develop new clients. But synergy only exists if you are doing different things, interacting with different markets, and thus deepening and broadening your expertise. When your consulting work starts to help your teaching work, which leads to a book proposal and then keynote speaking engagements, then a board seat, then an advisory position, you start to be able to charge more money for your work and exert less effort to get it.
- Security through flexibility. Here’s a paradox–if you want security, don’t try to find it. Run the other way. In the 21st century, when change is the only certainty, security springs from flexibility. Those best able to survive and thrive are those who have “cross-trained”–hard–by not trying to hang on to just one thing. A portfolio career forces you to do this, and there’s no one single point of failure. As in a properly diversified financial portfolio (but unlike a typical freelance career), your eggs are in different baskets. You are constantly twiddling knobs and adjusting levers, evolving new services as the market demands, moving from low yield to high yield clients, doing less of what you don’t like and more of what you do like. If one area of your business turns down, you switch focus to another. In a portfolio career, you may lose one client–perhaps even a few–but you will never lose your “job.”
In short, a well developed portfolio career gives you the chance to move from a service-based income model to the “equity model” of passive income. When you’re unchained from one job or one freelance offering, you have the freedom to think about and act on the things you really want to do. As you begin to achieve success in your portfolio career, you can start to change your portfolio mix, reducing the services you provide, and increasing your emphasis upon products and investments. That’s where the portfolio career payoff really comes from.
To register for Wednesday’s Portfolio Career class, head here.
[Photo:Michael Gallacher/flickr]
