Today I want to answer a customer’s question. So let’s open up the mailbag and see what we find.
Ah, here’s a good question from A.B. He’s been going through a rough patch in his copywriting business and needs some advice…
I’ve been reading your report, “How To Get Your First Copywriting Client In 14 Days.”
I’ll say right off the bat…
…I’m NOT trying to get my first client. I’ve been freelancing pretty profitably for 3 years.
But I just wanted to ask you about something because I’m going through a bit of a dry spell…
You mentioned that “you had a particularly bad stretch in November 2005.”
Do you think pretty drastic dry spells in copywriting are normal?
Since like the beginning of March I’ve been in a dry spell unlike anything I’ve seen yet in my career. I made a total of only $1850 in March and don’t have a ton set up for April. My usual earnings over these past 3 years have been closer to $4000 a month (with no expenses).
I only ask you this because I’m having all these doom and gloom thoughts about the market shrinking or whatever. I know logically it’s just a dry spell, but I can’t help having a bit of a “WTF” reaction.
Any advice on how to get over the slump?
This is a tough question and the answer is not simple or easy. So let me lay some groundwork first…
FACT: Booms and Busts Are Practically Guaranteed
Whether you’ve been a freelance copywriter for three years or 10, you will almost certainly go through a dry spell at some point.
I’ve had multiple dry spells through my 9-year freelance career, some worse than others.
As I analyze them, it’s hard to detect any particular cause or pattern.
Perhaps some were caused by a lack of marketing. Perhaps others were caused by my lack of foresight and planning. Perhaps some were caused by a change in the market.
Whatever the reason, it seems all freelancers—and all businesses, for that matter—will inevitably experience ups and downs in their financial fortunes.
The Copywriter’s Conundrum…
When you are busy writing copy and hitting deadlines for clients who’ve already paid you, it’s difficult to carve out time to generate prospects or follow up with prospects who may (or may not) hire you.
Of course, if you don’t take the time to talk with prospects and book future projects, you will one day run out of projects (and money).
And here’s the rub: If you happen to be going through a dry spell, you’ll have plenty of time to talk with prospects… but you probably won’t have any prospects to talk with.
So freelancing is this delicate balance of trying to fulfill on work you’ve already been contracted to complete and generating new business—no matter how busy you happen to be.
Assume that You Are Going to Have a Bad Month Every Now and Then
The freelance copywriters I know who don’t seem to ever have slumps fall into three categories.
- They’re in the top 5% of all actively working copywriters, have been in business for 20 years or more, and seem to never lack clients.
- They attend as many marketing events and seminars as they can to drum up new business and activate referral sources.
- They make 50% or more of their income from the sale of information products and only accept clients who pay top dollar for copy (if they accept any clients at all).
If you fall outside of these three categories of copywriters, then you should assume that you’ll occasionally experience some wild income swings.
Some months you’ll make a lot less than average… and some months you’ll make a lot more.
You should also assume that your income trajectory will not always go in the same direction from year to year.
What I Should Probably Never Confess, But Will Confess Anyway…
My annual income from 2005 to 2011 generally went in the upward direction. My best year ever was 2011.
Toward the end of that time, I had multiple retainer clients, and I had managed multiple product launches in which I had a financial stake.
Because of this, I made a decent amount of money and my income was fairly predictable.
But then things began to change…
- After working with me for more than four years each, my two biggest retainer clients decided to go in different directions.
- The credit-fueled binge spending of the mid-2000s finally caught up to the advertising industry. Fewer entrepreneurs seemed to be hiring copywriters.
- Google created new rules and applied them to advertisers retroactively. My AdWords account was shut down in late 2010 due to a small experiment I ran in January of 2006.
- Due to overuse, product launches seemed to become less effective. Fewer clients were using them on any kind of consistent basis. Therefore, there was less demand for copywriters who knew how to write copy for and manage product launches.
- Not to mention, I wrote a few unflattering pieces about certain individuals in the Internet marketing space, which essentially cut off an entire market in which I had previously worked.
Long story short, after having my best year ever in 2011, I had my two worst years ever in 2012 and 2013.
And… because I had made some financial decisions based on my income always generally going in the upward direction, I was forced to reduce my expenses as much as possible—as quickly as possible—just to make ends meet.
The Market for Copywriters Has Definitely Changed
In A.B.’s original question to me, he said, “I’m having all these doom and gloom thoughts about the market shrinking.”
Is the market really shrinking?
I can’t say for sure, but I can say that the market seems to have changed.
My list of clients has changed drastically since 2005. Whereas I used to do more work for solo entrepreneurs, writing copy for information products, software, and seminars, I now work almost exclusively in the financial space.
Most of my projects now involve selling financial and geopolitical newsletters.
And even that is not necessarily an industry I feel like I can bank on long-term. The stock market has recently hit new highs even though stock ownership hit a record low of 52% in 2013, down from 62% just five years earlier.
What will the market look like for freelance copywriters five years from now? I hardly dare to guess.
What You Can Control and What You Can’t
Can you control how many clients you have—or how much money you deposit in your bank—this month or next?
You can’t control who decides to hire you. You can’t control when checks are mailed—or when they arrive. You can’t even control how many sales your copy generates.
When you start to think about it, there are really very few things you can directly control.
What are those things?
You can control how much money you ask for. You can control which clients you accept and which ones you reject. You can control how much effort you put into each project.
But perhaps most importantly you can control your ordinary living expenses.
Your Living Expenses Affect Your Ability to Survive Dips in Your Fee Income
You may at first think that living expenses aren’t a business issue. But they are.
If you start living large based on a few good months or years, and your fee income suddenly drops, you’re going to be in a world of hurt.
And the higher your living expenses are, the less likely you’ll be able to survive any kind of dry spell, whether it lasts for two weeks or two months.
Because freelancing is not like having a job. You can’t count on a paycheck showing up every two weeks at the same exact time. Budgeting is nearly impossible.
So minimizing your living expenses is critical to your long-term freelancing success.
Why Cutting Expenses Is So Powerful
Let’s say you make $5,000 in a month. Let’s also say that your living expenses are $4,500 a month. If your monthly income drops by $501, you’re in the red. That’s not much margin for error.
To increase your margin of error, you could grow your income or cut your expenses. Which is better?
If you book a $1,000 project, you can’t bank the gross amount. You must subtract out advertising expense and taxes. Your net is probably closer to $800.
And you probably won’t collect that amount all at once. It may be split into two payments—50% up front, 50% on completion. So there’s a time lag.
Furthermore, you will need to book an extra $1,000 in fees every month to keep it going.
But if you cut $1,000 in personal monthly living expenses, you’re saving after-tax dollars. Therefore, you get to keep the full amount.
There’s no time lag and no work required other than the initial effort to identify and eliminate the expense. And your savings continue automatically every month.
Let’s look at how your margin of error changes based on these two scenarios…
- Earn an extra $1,000, net $800: Income is now $5,800, expenses still $4,500. Margin for error is now $1,300.
- Cut $1,000 in monthly expenses: Income is still $5,000, expenses are now $3,500. Margin for error is now $1,500.
As you can see, cutting expenses is the more effective activity in the short-term. Of course, you can only cut so much, so a combination of expense reduction and income growth is the best of both worlds.
4 Ways to Help Ensure the Longevity of Your Copywriting Business
Here are four simple things you can do to help ensure that your copywriting business lasts…
1. Minimize your living expenses.
The first thing you should do is minimize your living expenses. Find a cheaper place to live. Drive an inexpensive car. Learn ways to save money. Clip coupons.
I’m not suggesting you live like an ascetic, just that you watch your money so you don’t find yourself in a cash flow crunch.
2. Save up $2,000 in an emergency fund.
The traditional advice for self-employed people is to save up 3-6 months of ordinary living expenses. Do the math. That’s a big number.
So start with a small emergency fund. Save up $2,000 and put it in a separate bank account. Don’t touch it unless you really need it.
3. Develop additional streams of hands-off income.
Use your spare time to develop additional streams of income that don’t involve your direct involvement from week to week.
For example: Write a Kindle book. Build a niche website and monetize it with Adsense or affiliate products. Create a special report and sell it on ClickBank. Write sales letters for clients who offer royalties.
Just $500 to $1,000 extra per month coming in from non-copywriting activities can go a long way toward filling the gaps during slow months.
4. Avoid debt.
Debt will kill your cash flow. So if you have a bad month, the last thing you want to do is make up the difference by paying with your credit card.
This is an easy temptation to fall into. It’s easy to think that “next month will be different” and that you’ll just pay off the balance when you get your next project.
Unfortunately, the future is fickle and reality is often not like your expectation.
Fluctuations in Business Are Normal… So Plan for Them
Everybody who is in business for himself (or herself) is going to have dry spells every once in a while.
So plan for them.
Focus on controlling the things you can control.
And set yourself up so you can make it for the long haul.
I realize my response to A.B. has been rather lengthy, but I hope it helps him. And I hope it helps you, too.
This article was originally published by Ryan Healy
Published: May 7, 2014