When One Client Becomes Your Job
Here’s the scenario: you give up your job to take up freelancing full time. First, you work in grinding drudgery for a while, until you land a sweet client who not only loves your work, but wants you to do more and more, until you find yourself dedicating 40 hours a week to just that one client. It feels great: stability, steady income, the same work week-after-week, all the things you left your job for…. or was it?
If you’re in this position, or see your schedule starting to line up with one major client, then it’s time to assess the pros and cons of dedicated freelance work.
When Your Client Becomes Your Job
It can be pretty satisfying to find a client who wants you to work for them full-time. I had a client who I worked with for more than a year, first of all doing part time hours every week, until soon I was working forty hours minimum — with no room for other clients. For a while, this was great. I loved the stability of it, loved knowing how much money I would be bringing in every week, and also loved the team that I worked with.
But it reached a point when I realized that I had lost sight of the reasons that I started freelancing, such as:
- Being my own boss – while I made my own hours I still had someone to answer to. Part of freelancing is the freedom that comes from having to answer to no one but yourself. When your client becomes your boss you’re back to having someone tell you what to do.
- Building my own business – I went into freelancing to develop my own writing business. While having a stable client gave me a great platform to do this, it also meant that I was putting all of my energy into developing his business, instead of my own.
- Working with diverse clients – part of the joy of freelancing is working with so many different people, making connections, developing contacts. When you settle with one client you’ve given up playing the field.
But, that’s not to say its all bad. There are a few of up-sides for dedicating all of your time to one client.
The Pros
Steady Income
We all know what it feels like to be worried about where the money is going to come from this month. Having a client who has steady work for you every month and pays all of their invoices on time gets rid of that worry. It also helps that you are getting the same income every month. You know how much to put aside for tax, you can save for that holiday or car, and you can budget.
Being Part of a Team
Freelancing can be a lonely business, especially if you’re in a job that requires you be at home in front of the computer all day. If you’re working with lots of different clients it can be hard to build up any meaningful relationships with colleagues, which can increase the feeling of isolation. Working for a client who manages a big team can help you develop friendships, just like you would in any workplace.
The Cons
No Job Security
So everything is going well with your client, but then one day he or she takes a disliking to you. Maybe you screwed up a website launch, maybe you just missed a typo in some content, or maybe your client is just having a bad day. They decide they’ve had enough of you, and that’s it, you’re gone.
You have no protection, job rights, nothing. You don’t even get one week’s notice. And worse than that, you’ve been working for this client for more than a year and you don’t have any other clients lined up. Sticking with just one client might feel like it gives you stability, but you’re actually less secure than if you had a whole bunch of clients.
No Employment Benefits
There are many things that you give up to become freelancers – it might be a health plan, or a pension, paid holidays, or just the simple matter of someone else taking care of your accounts.
When you work freelance for just one client, you lose many of the benefits of freelancing without gaining the fringe benefits that come with being an employed person. When you factor all of the additional costs (accountancy, web host, printing, stationary, or whatever) you may realize that you could actually be earning more by working a permanent job, rather than permalancing.
Where Are You Going?
At a certain point you wonder where you are going with this. Your client is thriving, but you’re left wondering where you can go within the organization. Maybe there’s nowhere for you to go, and while you’ve been building up someone else’s business your own has been left behind.
Saying Goodbye
Eventually things come to an end. Maybe you want to work on your own business, or maybe your client has kicked you to the curb. How should you leave things?
Whether it’s because of money, you’ve been poached by another client, or you have other projects you want to work on, be up-front about your reasons for leaving. Leave your client on good terms. You may want a reference in the future, or you may decide that working for just one client was for you after all.
In the end, you’ve got to figure out the reasons you became a freelancer in the first place. If you’re working for just one client, and you think about that hard, you may just realize that you’ve become an employee again, without any of the benefits of being employed.
Photo credit: Some rights reserved by Designer_things.
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It is really easy to get in to this kind of pattern. I’ve done it countless times over the years. A modeling job comes up and I start working for someone and then boom. It’s a year and I’ve been doing work for one client the whole time. Sometimes you have to learn to see the warning signs. When it comes to freelancing having more than 1 or 2 clients helps, but you don’t want to overwhelm yourself. I’ve seen other digital artists and modelers take on more work than they could handle and that can lead to other problems.
3-4 clients is ideal and making sure that you split up the week or devote an hour or 2 per client makes an excellent schedule.
Great article! I agree to the pros and cons as well when it comes to a client who becomes your job. There are times you would realize yourself that it’s getting too far already and that you have to start your own freelance business. You tend to forget your main purpose on deciding to freelance. Priorities are always first.
It’s so easy to get lost in freelancing and to fall into a trap. I think the biggest enemy is the ‘comfort zone’. A freelancer should always remember that the comfort zone can be an obstacle because of all that ‘false security’ which you can easily fall into.
Other way to know that your client is becoming your boss: He wants to dictate how much you will earn.
I had a client once which initially agreed my price, the things ran smoothly for a while and then he started complaining about the price but still paying, when day he simply reached the point to ask me to cancel two outstanding bills and send one with X price because that was all that he wanted to pay, he took a position in which if I didn’t cancel he simply won’t pay. We argued a little, I gave him the discount but I haven’t taken any jobs from him anymore.
If a single client has become your job without your receiving employee benefits and having taxes withheld, that client/employer may be in violation of American law. It’s called mis-classification, and it’s done to avoid employee withholding taxes and benefit coverage. And here in the good ole US of A, the Internal Revenue Service is cracking down.
I guess my perspective is from someone who works online. I’m based in the UK and my clients are based all over the world. A client based in the Canada, for example, would have no problems keeping someone like me on a contract because I pay tax in the UK. This is a definite downside to the whole international freelancing gig.
Martha’s right. It may also work against you tax-wise. If you have one client, who dictates things like work hours or location, you may lose any status you have as a contractor. Employees do not have the same deductions as independent contractors. One of the ways the IRS determines the status is whether or not you have multiple clients. Mind, it is still possible to maintain contractor status with only one client, but it is much more difficult to defend.
This has happened to me twice. The first time, the client was so pleased with my work that he actually brought me into his offices to talk about the possibility of going to work for him full-time as an employee. It didn’t work out, and thank God because a month later, we had a disagreement on something and he dropped me like a hot potato. He later emailed to tell me someone had called him to ask about me and he told this other person I was terrible to work with. Quite a turnaround in his opinion of me in just a few months. Luckily, I managed to build a thriving client base without him, but it still leaves a bad taste in my mouth.
The second time, I had one client that was throwing a ton of work my way, and I had to keep turning other clients down until one day one of these other clients complained that I turned him down so much there was no reason for him to keep contacting me. I told my big client I didn’t want all my eggs in one basket and was going to start accepting work from other clients. She was furious with me and pulled an entire month’s work out from under me with no notice. She has called me only sporadically since then, but mostly because she herself had thrown all her eggs in one basket with one of HER clients, and when the business from that client dried up she had no other clients to draw business from.
tl;dr This article is absolutely spot on. Despite the possible short-term financial rewards of working for a single client, relying on only one client for the majority of your income is a bad, bad idea.
I agree with all. Yes, if you only have one client, there is an IRS for to determine if you are classed as an employee or contractor. That is the SS-8 form and looks at time, requirement to do the job, hourly control, office control, etc. If a company just ‘declares’ you as a contractor but fail that test, they are liable for your taxes.
That being said, I also have had a client that took many hours of my week, frequently up to 20 hours / week, and I was not pursuing too many other projects at the time. One day they went away and I had to struggle to replace those hours. Ouch. Don’t put yourself in that position, always set aside time for looking for new clients.
I agree with the comments made so far about the negative (US based) IRS implications of devoting full time type hours to one freelance client.
I probably have a lot more experience working as an independent contractor than likely 99% of the people who visit this board – I mean 19+ years as an independent contractor – and having said that, even when I have devoted too much time exclusively to single clients, nothing has ever happened. Also, I have never, ever heard of IRS action happening to the one or two lone contractors working for smaller businesses. The “permatemp” type legal actions only seem to happen to large corporations that employ many contractors who are working essentially as surrogate employees but are denied benefits.
Basically, you just don’t broadcast the fact to the IRS and you should be OK. (I am not an attorney, BTW, this is sheer opinion on my part!)
My remark about “permatemps” mentioned the fact that contractors don’t receive benefits. Essentially, regardless what you like to be considered and called, if you work exclusively for one client and allow them to dominate your schedule to the extent that you stop marketing and you turn down other work, you are functioning as a *temp*. Just as surely as someone who shows up at the client from a temporary labor agency to do typing or manual labor is also a temp.
Temps don’t market and they have to take pot luck for new assignments. That has always, to me, been the dividing line between temping and freelancing/contracting/consulting. Temping is accepting the default.
And temps, as regarded by most clients and most client employees are usually considered a caste below “better and more worthy and more deserving” full time employees. (Those adjectives, of course, are how many FTEs see themselves relative to temps.)
You need to stay moving – like a shark – and stay marketing if you wish to be considered a professional service provider and not a temp.
I see the “permatemp” arrangement discussed in this post as destructive to one’s professional image.
Fantastic article. And so true!
I can’t really add anything. You (and the other commenters) have already said it all, as far as I’m concerned.
I just wanted to voice my support (and vehement nods of agreement) and give you a big ol’ thumbs up.
Great work!
–Lauren*
FYI, I featured this article in my latest freelancing weekly: http://freelancingweekly.com/issue-11
Hi- great post that struck a nerve. I’m in the throes of this at the moment and it’s causing some kind of existential angst lol. I’ve even been given a company email address!! What really struck me in your post was when you said “while you’ve been building up someone else’s business your own has been left behind.” I invested in my own website and marketing materials – but these are all gathering dust while I work full time growing someone else’s business.
I’m now back job hunting – I might as well enjoy the pros of being in an office rather than all the cons of working freelance for someone else full time.
What has other ppl done in my position?