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As a freelancer, you’re probably resigned to the fact that your income is unstable. Your freelancing projects — and income — ebb and flow, depending on your marketing efforts, business seasons, or just plain luck.
But did you know you can have a regular, predictable income?
Yes, even if you’re a freelancer.
The way to have regular income is by working with clients on retainer basis.
What’s a Retainer?
By “retainer basis,” I mean you have a contract with your client that:
- specifies work you will do on a regular basis
- gets you paid a set amount on a fixed schedule, usually monthly
- covers a long period of time
Many businesses work on retainer basis, including lawyers and marketing agencies. Why not you, too?
Imagine setting up a regular subscription on PayPal, so your clients pay you automatically every month. You don’t even have to bill them.
Wouldn’t it be great to know for sure you will receive that income every month?
Benefits of a Retainer Contract
Retainer contracts are beneficial for freelancers, because they:
- guarantee a fixed income, as long as you produce the agreed upon outputs
- minimize your need to keep finding new clients
- allow you to get involved deeply in your client’s business and therefore gain intimate knowledge and mastery of it
- reduce the need to learn a new business or market
- free you to focus on getting the job done instead of chasing after your next clients
Disadvantages of a Retainer Arrangement
Is a retainer arrangement ever bad for a freelancer? It could, if:
- you underestimated your value and are not getting paid enough for the work involved
- it makes you so complacent that you neglect to market your business altogether
- it isn’t flexible enough to cover task adjustments, and you end up doing more work than you agreed on, due to the dreaded “scope creep”
Even with these disadvantages, I still think retainer contracts are ideal for freelancers.
It may take some creativity to think of recurring services you could package into a retainer contract. And ideally, the retainer package you come up with is based on outputs rather than inputs. I mean you should get paid based on the work you produce, rather than the number of hours you put in for a client.
To help you come up with retainer packages, think of:
- maintenance work your client will need after your initial job is done (e.g., WordPress upgrades, backups, and maintenance)
- continuous requirements, such as weekly blog posts, bi-weekly newsletters, monthly lead-in offers, and quarterly white papers
- tweaks or improvements you could do for your client, like website conversion optimization, monitoring, and evaluation
If you really can’t come up with anything, as a last resort, you could bundle your services by time. For example, if you’re a VA, offer 15-hour monthly packages. But I would still challenge you to come up with an output-based, rather than time-based contract.
Do you have retainer contracts with your clients? If so, what types of recurring services do you provide?
If not, what’s stopping you?
Share your experience below.