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Do You Freelance?
Renegade:
Lack of a diverse client base can make me nervous at times.
40hz:
Lack of a diverse client base can make me nervous at times.
-Renegade (October 24, 2011, 10:55 PM)
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+1!
A good rule of thumb: Never allow any one client provide more than 25% of your total revenue stream. Ideally, keep it to 10% or less.
8)
40hz:
I call myself a freelancer but all work comes from one guy. Not very clever if he drops dead.
-nudone (October 24, 2011, 05:19 PM)
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I think the majority of freelancers are in the same boat, truthfully. I know I was... not exactly, but close enough. I tried to diversify, but it was too much work. :-[
-wraith808 (October 24, 2011, 07:39 PM)
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Been there.
Unfortunately, having only one client means you're not truly freelancing. You're really more an employee without medical or retirement benefits. At least according to the IRS.
Which can be very bad for the contracting business. Because the IRS may decide to classify such freelancers as "statutory employees" if they don't have other clients, or can show they're actively seeking additional engagements. And the tax penalties can be quite severe for the contracting company if a statutory employee ruling gets made against it.
That's one of the reasons why so much freelance work has dried up over the last ten years. And also made it hard, in many places, to get 'freelance' assignments unless you're hired through an agency - or you've set up your own LLC.
nudone:
I'm in the UK but we have similar rules here. I think I'm in a grey area - or my "main" client is. Maybe I'm deluding myself but I'm just taking the view that he knows the law. He's chosen to do things this way - and so it will be his problem if the taxman gets involved and gets upset.
If, indeed, it is me that the taxman will be upset with, then I shall begin panicking immediately.
wraith808:
Unfortunately, having only one client means you're not truly freelancing. You're really more an employee without medical or retirement benefits. At least according to the IRS.
-40hz (October 25, 2011, 12:16 AM)
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I had multiple clients and covered myself that way. But 90%+ was always a single client. Having multiple clients has its own downfalls (conflicting priorities, a stretch with no work from multiple clients, then a stretch with too much work, marketing, etc.) Like I said, too much work, and I barely liked the business part anyway. The other <10% is the part that I still maintain. Like I said... hobby money. :)
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