Should freelancers seek long-term clients or not?

Question

Companies are forced to seek long-term partners (term) if they think to live for years and keep up with all costs.

Are we, freelancers, forced to do the same? Or since our costs are at the minimum and there are many jobs (especially in IT area) we should not stick to long-term clients?

I am not sure if I'm a grunch, but I deal better with new clients, and their projects seems more interesting. With long-term clients, I am somehow "forced" to take any project they offer me, and I cannot reject them by saying that their project "is boring". With new clients, since I only chose projects which are interesting to me, I have no such issues.

Answer 1

As a freelance UX designer, here's my perspective:

Advantages of long-term clients:

1. Good source of steady income.
2. Good source of recommendations. Those who give you testimonials will know you well.
3. You don't have to prospect for new work as often.
4. You will feel more like a part of their company but still have the advantages of freelancing like being your own boss, setting your own hours, and working wherever you want.
5. Socially, I think it's better because you get to know people and that may help with feelings of isolation. I think that extroverts and others who value having work friends would benefit more from long-term projects. And in turn, that makes people more likely to recommend you.
6. Less time bookkeeping (assuming you work on only a few projects at a time), and some accounting software is less expensive if you work on fewer projects. In other words, it could lower your overhead.
7. If you are a generalist, these projects might lend themselves better to follow-on/maintenance work because you are seen more like an employee and less like someone hired for a quick job. You might get experience at different stages of the project/product life cycle than you would otherwise, depending on the kind of work you do.

Disadvantages of long-term clients:

1. If they haven't recommended you yet, prepare yourself for the possibility that they won't.
2. Your portfolio might not have enough variety in it to get you hired easily for future work (if you are in a field such as design where portfolios are very important).
3. If your clients don't stay on top of new technology, your skill set might get stale and you may find it harder to compete with other providers for new work. This could be seen as a risk in short-term projects too. It depends on the clients.
4. Prospecting may be harder and slower because there is a higher risk for clients in hiring you.
5. Your prospecting/sales skills might not stay as sharp because you might not be using them as often. Returning to prospecting after a long project ends could mean you have a long lead time re-learning what to do to land more clients.

Advantages of short-term clients:

1. They can help you get a lot of variety in your portfolio quickly.
2. They can fill in gaps between longer-term projects or give you something to do during a slow period in a long-term project.
3. They can help you get recommendations quickly.
4. It may be easier for you to specialize in a few services rather than getting pulled into being a generalist if your projects are shorter-term.
5. They can provide quick money.
6. They are potentially lower risk for the client. Getting hired for these might not take as long or require as many stages of approval.
7. It might be easier to raise your rates because clients won't be as accustomed to paying less for your services.

Disadvantages of short-term projects:

1. Having to prospect and sell often.
2. More time spent administering the business (taxes, accounting).
3. You need more clients, which means that you'll need to spend more time researching clients or specialize in a wider niche.
4. If you don't have a backlog of new projects, it could be more stressful because you won't necessarily know where your next work will come from. If you do have a backlog of new projects, it could be more stressful because one project running late could easily delay all the others.
5. Your rates may become more subject to changes in the market.

It depends on the nature of your business, your portfolio needs, and what your business needs to keep the amount of work optimal.

With this in mind, I'm currently prospecting for a mix of long-term and short-term work.

Answer 2

There are advantages to long-term clients as well as disadvantages. The advantages I have found to long-term clients are:

• Lower cost of sales/marketing (the customer already knows and trusts me and so it is easier to convince them to select me for a new project)
• Lower risk (you already know you can work successfully with the customer, they have proven themselves to be honest and trustworthy)

As you say, the disadvantages can be:

• It is harder to say no to an existing client
• Their work can get boring, especially if you just tweaking previous work you did for them

That being said, I disagree that you are "forced" to take any project you are offered from an existing client. For example, one of my clients requested a bid for a Silverlight development project. At first, I thought "hey, I'll learn something new", and I started working on the bid. Then as time went on, I realized that there was little value for me in learning Silverlight. So I politely explained to them that I had decided to decline bidding on their project - it just wasn't a direction I wanted to take my career. I was worried the customer would be angry, but instead they told me they respected me more for my honesty!

Ultimately you need to decide what kinds of customers makes you the happiest. If always finding new clients is worth the effort for you, then by all means go for it. My business model is built around long-term relationships with clients so that I don't have to constantly find new ones. In a typical year, I work with 4-6 active clients, and perhaps only one of them is a new client. That new client doesn't always convert into a long-term client, but that is usually my goal.

Answer 3

It is totally dependent on the kind of work that is being done.

A long term client is good if the person is giving a steady flow of projects or a single project that is going on and on for quite some time.

Short term projects are a means of earning a quick buck.

Therefore, both the alternatives are not different. You can choose both type of clients.