With all other things being equal, let's say you could pursue getting 6 clients that would pay you $5,000 per contract, or getting 3 clients that pay you $10,000 per contract. Assume that the work for option A and option B are equal. Would you prefer one approach to the other? What are some things to consider?
Note that there is a distinction between "project" and "client". Large clients can have small projects and vice versa.
- you are diversified and therefore, the loss of one client will have less impact on your work/cash flow
- getting into more clients should increase your marketability because of your greater visibility and larger number of reference clients and projects
- broader experience & background because you are involved in more and different projects and clients.
- more small projects leads to more (unpaid) overhead (there's always a certain amount admin work such as setting up contracts, time-keeping, and billing required for each client)
- greater amount of task-switching overhead and therefore more potential for lost time
- greater possibility of conflicts as now you have more calendars to juggle
- potentially less follow-on work as smaller clients have smaller budgets / capacity for work.
Fewer/larger clients: Flip the above, plus add the Pro that larger clients offer potentially greater opportunity for finding additional projects within the same client.
For your specific question, I would prefer 3 x $10,000. Your project portfolio is still diversified and your project management / administration overhead is reduced. And either of the two options you mentioned is MUCH better, IMO, than a single $60,000 project. Large projects are nice for cash flow, but you can get buried in the project and lose your marketing edge... remember the old consultant's dilemma: "If you're billing, you're not selling; and if you're selling, you're not billing!" Striking the right balance is important for long-term success.
FYI, I've been an independent consultant since 1979.
I like working on a mix of larger and smaller projects to even out work flow and cash flow.
Sometimes, you may be waiting on clients for a decision or other reasons and it's good to have something else to be going on with. A mix of projects means you will always have something to be going on with.
Taking on too many large projects can mean waiting a while to get paid. A few smaller jobs happening at the same time can bring in some cash in the meantime.
While larger projects may have lower overheads (less invoices etc), advantages of smaller projects might include:
- opportunities to network with more people
- add more jobs / industry sectors etc to your portfolio
- smaller jobs can often lead to larger jobs
- less risk (e.g. if job goes bad or clients do not pay)
- learn new skills gradually rather than in big chunks
I think it really depends upon your work style and, to a degree, the type of work you do.
I prefer to mix thing up and have both going at most times. I enjoy the fact that if I'm in the middle of a large project I can take a break, do something small and alter my mindset for a period of time. This generally results in "fresh eyes" on larger projects and allows the work to be better overall. I'm simply not the type of person that can spend all day every day working on the same thing. I need variety to keep my interest going and ultimately to solve some design issues which may occur on projects. I'm a multi-tasker at heart, always have been. I know that about myself and try and steer my work schedule to accommodate that aspect of my personality. I get very, very, bored if I only have one or two large projects to complete.
As for pros and cons of each one that depends on the source of projects.
I generally only work with a few clients who have been regulars for years. It's not a problem to invoice these clients regularly regardless of the number or size of projects they've given me. However, if I were doing a great many small projects for a great many different clients, I would not enjoy the additional clerical time it would require to invoice for each and every project. At some point there would be a critical mass where I was spending so much time on clerical details that profit would most likely suffer, not to mention my overall enjoyment of freelancing. I don't want to be an accountant or office manager. I do it because I must. :)
As others have mentioned, the big projects can at times be an issue if you can't invoice for them regularly. It's difficult to go long periods of time without any income or any income of note if working on a large project. For this reason I explain to the client (and in contracts) that invoicing will occur at milestones. This allows me to avoid that feeling of working for nothing, even though it's not really the case. No matter how much you are working, it's important to see a check every now and then. For me it's not about concern the client won't pay, of course they will if I invoice when the project is complete. I simply need to see checks every now and then so I feel like I'm doing well and not spinning my wheels without getting ahead.
In your specific scenario -- 6 or 3 jobs.. my choice would depend entirely on the actual projects, not on the return, since the return is the same. I may even pick some from A and some from B (which may result in more return).