Freelancing in downturns

Before we jump into the article, it should be said that we unfortunately do not sit with a crystal ball and can say whether the market is going up or down.

That said, there are some winds blowing from the cold north (+9% inflation, rising energy prices, and war in Europe to name a few), and while we are not in a full-blown recession when the article here goes to press, there are some very concrete things you can do to secure your business and income base as a freelancer.

How does the freelance market react to a recession?

When budgets have to be cut, a number of things typically happen in a company.

Basically, the focus is shifted from growth to hard-nosed survival, and this means that:

• All non-essential projects will be cut, and the focus will be on strengthening short-term earnings.
• Freelance contracts are interrupted (despite the easiest ones to skip at short notice).
• The very large companies officially introduce a hiring freeze - smaller companies manage it less drastically, but the outcome is the same.
• Staff are being cut, and permanent employees are being fired.
• And like a yoyo, freelancers get rehired (after all, they're the easiest to hire on short notice).

Of course, there is still work to be found – even when companies cut back. But make sure you do your homework properly so you understand what stage the company is at.

Perhaps you need to spend a little extra money on quantifying the results that your skills help to create: how does it concretely help to create more sales, grow the business or save money for your customer.

The better you are at articulating your value, the easier it is to close the sale. (It could also go and be a council living on the other side of a recession!)

Don't let your freelance business be driven by fear

When more and more red lights suddenly start flashing, the immediate reaction is to run screaming towards the exit.

It's easy to be controlled by fear when the fire is burning, but if you make sure you take the necessary precautions and prepare for a bumpy ride, a recession will strengthen your freelance business and help create a stronger foundation.

Freelancing in Downtime: Five Strategic Moves for a Stronger Business

Here are five concrete strategies that can help you create a robust freelance business to weather any storm:

• Increase your financial buffer
• Strengthen your foundation
• Include evergreen services in your mix
• Create service packages
• Consider your physical base

1. Increase your financial buffer

Projects come and go. It is part of life when you have chosen freelancing as your way of life. In "normal" times, we recommend a financial buffer of at least 3 months.

It helps you not to compromise on the quality of your work, your price, and the clients you dream of working with. We've all been in a place where we just needed some money in the cash register, and neither the customer nor the payment was particularly attractive. Desperate times call for desperate measures, but if it goes on for too long, the joy of the freelance career is quietly drained.

In times of recession, there is often a little longer between contracts, and a financial buffer extended to 6-9 months will therefore create peace of mind. There is a very special sense of freedom associated with saying no to clients because they don't match yours criteria. This applies, as it were, whether we are in a recession or not.

2. Strengthen your foundation

There is always a silver lining to freelancing in downturns. If there are suddenly fewer contracts coming through the door, of course there is also time that suddenly goes unused.

Strengthen your foundation, is another way of saying that it's time to look inward and give your own business a good old-fashioned audit:

• Standing your website stringy with lots of testimonials from satisfied customers?
• Is your communication right in the closet? Regardless of whether it's on email, LinkedIn, Instagram or a whole fourth platform.
• Are you up to date on the latest tools in your field?
• Is your core performance 100% sharp or do you need time to upgrade?
• Is yours pricing where should it be, or should you look at your packages and price structure?

3. Have evergreen services in your mix

Evergreen benefits are a two-part factor. Because it is both about having a service on the menu that is in demand regardless of what the economic climate looks like. That being both marketing, sales, bookkeeping, finance and programming to name a few.

The other half is about which industries you have the cannon aimed at. For example, if you listed yourself as travel & hospitality copywriter for luxury hotels in 2020, the chances are that there was a very long time between tasks.

The focus on evergreen services is therefore both about having a service that is always in demand in your mix, and at the same time keeping an eye on developments within the given industries.

4. Create service packages

As a freelancer, there are great advantages to creating service packages - so-called bundling. It has a number of advantages, and makes it both easier to stick to your niche at the same time that you can spice up your product with some of your other skills. Competences that usually have difficulty standing alone.

Bundling makes it easier for you to communicate your service, it appears to be a pure bargain for companies (and in a recession people look far and wide for good deals), you get an extra advantage against your competitors and you can streamline your work and onboard new customers faster.

5. (Re)consider your physical base

Okay, so the last piece of advice here isn't right for everyone.

A big draw for many who choose to go the freelance route is also the opportunity to cultivate a lifestyle as a digital nomad. A Copenhagener's salary on the coast of Portugal just goes a little further than on Østerbro, where you don't exactly get a cortado thrown in your neck.

In line with the first strategy, about increasing your financial buffer, this one also digs deeper, with a question of where you can get the most for your hard-earned money.

For inspiration about attractive nomadic places, you can check, among other things Nomad List.

When the recession hits

As a freelancer, you have far greater flexibility than more established companies. You don't have to convince a board of anything or ask the boss for permission. You can implement small and large changes right now, depending on what the economic climate looks like.

It gives you a unique potential to float above, and if you play your cards right, freelancing in downturns will create a significantly stronger business foundation for you.

If you have worked your way down to the bottom of the article here, you will have 5 good cards on hand that you can use to cushion your freelance business against downturns:

1. Increase your financial buffer
2. Strengthen your foundation
3. Include evergreen services in your mix
4. Create service packages
5. (Re)consider your physical base

Regardless of how you choose to develop and secure your business, remember to update both your website and LinkedIn profile with your newly acquired skills. Then there is also a chance that you will be seen and heard for what you can do.