Do you struggle being able to take time off? Have you NOT taken a vacation in the past year?
Do you worry you’ll lose revenue if you take time off? Do you take less time off being self-employed than when you had a “real” job?
Guess what? Every freelancer and self-employed business person struggles with this; yet, it is possible to take time off AND earn more.
Take Time off AND earn more?
Unless you’re independently wealthy (damn you, trustafarians!) or frugal enough to live in a cardboard box, you need to earn money to pay for things like housing, lattes, and that pesky gambling habit. Being self-employed, though, you only earn cash when you work. And if you’re not working, you’re not earning.
Although your bill rate might be relatively high compared to an hourly salary, you might think you “can’t” take time off because of difficult issues, such as:
- Pressure to generate revenue.
- Non-billable time needed to ensure you have a flow of work (i.e., marketing), which takes time away from being able to bill revenue.
- Time needed for miscellaneous admin tasks (accounting, bookkeeping, networking, business development, etc.).
- Poor time management (guilty as charged…).
So, contrary to what your spouse or significant other might think, no, you CANNOT bill 40 hours a week. Sure, there are things you can do to maintain focus and pare down the time you spend on eBay surfing for beanie babies, but at some point, you’d like to have some time off.
How to Earn More so You Can Take Vacation
Over the past five years I’ve been self-employed, and I’ve learned a few tactics that have helped boost my consulting income so that I can take time off, while avoiding a hit to my revenue. I’ve learned to keep new work coming through the pipeline while taking time off. Most important though, is earning more when I take a vacation and here’s how:
- Raise your rate.I know freelancers/consultants who have NEVER raised their rates. If that’s you, then you’ve just taken a pay cut every year. Personally, I raise my rate about 8-12% annually. And I charge new clients a higher rate than existing clients–since it’s hard to bump your rate for existing clients up more than a “reasonable” increase, whatever that might be for your niche.
As an example, this year, I bumped my existing clients from $150/hour to $165/hour, while I charge new clients $175/hour. The result is that I gave myself about a 13% raise. That means that–all other things being equal–I can earn the same as I did last year but work less, i.e., take some vacation (or, I can work the same amount as last year, and have more money to fuel my eBay addiction).
Be forewarned though: to raise your rate, you first need to believe in the value you provide–that may not be as easy as it sounds. Do you “blink” or hem-and-haw when you tell clients your rate? If so, you may need to work on reminding yourself of the value you provide, and that you’re worth your rate.
- Create non-hourly revenue streams. Depending on your freelance/consulting niche, it may be possible to create re-sellable products like software utilities, apps, e-books, e-courses, and more.
Prior to going on vacation, you can do a marketing push to your clients and; prospects to boost the sales of your products. That way, you can make money while you’re away. My favorite definition of an entrepreneur is “someone who’s willing to work night and day to make money while they sleep.” Put in the time to create something that you can re-sell, then you can keep the cash rolling in while you sip mai tais on the beach.
- Alert your clients that you’ll be taking time off beforehand. I regularly do this–about two weeks before I go on vacation–and it typically results in clients e-mailing me with billable projects.
My initial e-mail reminds the client about me (even if we haven’t talked in a while), and the timeframe before my vacation creates scarcity so that clients want to push work to me. While this tactic may not make you money while you sleep, it usually puts more work in your pipeline so you won’t be as worried about having no work when you get back from your time off.
Manage Work: Before, During, and After Your Time Off
Now that you’ve made some enhancements to your freelance business to earn more, you still need to minimize any hit to your hourly revenue, and keep projects moving forward while you’re off:
- If possible, schedule your time off as an extended weekend. That way, you’re not out for an entire workweek, and can maintain momentum with projects more easily.
- Plan BEFORE you return. Before you leave on vacation, create blocks of time on your calendar for specific projects and tasks–not just the e-mail black hole. Aim to plan out the entire return week, leaving some open times for things that come up, but most of your time should be planned out. That way, when you return from vacation, you’ll know what you need to do, and during your vacation, you’ll be less stressed since you know you’ve done advance planning for your return.
- Increase your billable hours prior to leaving on vacation. I also boost my work hours after returning so that there’s not as big a hit to revenue.
- Optional: Work on vacation. Not my favorite, but it’s a possibility. To do this, I’ve restricted work hours to early morning and late evening.
- Optional: Manage e-mail during your vacation, but only to clean out your inbox. The goal is to reduce inbox clutter so you’ll have less when you return. This doesn’t necessarily mean responding to e-mail or working while you’re on vacation. The point is to come back to work with only the priority stuff in your inbox.
- My favorite: Unplug completely. If possible, do absolutely nothing work-related, and don’t take your laptop or cellphone on vacation. For the past 3 years, I’ve taken my kids on an annual backpacking expedition, and it’s incredibly freeing to only focus on enjoying my time off in the outdoors. Unplugging completely makes it easier to feel refreshed and energized when you return to work.
Those are just a handful of strategies I’ve used over the past five years as a freelancer consultant. By observing and adjusting these tactics, I can see what brings the best results results. In addition, having a mindset for experimentation makes it easier to play around with how I work and how I run my business; that way, I can test new ideas that–hopefully–create big wins.
How have you structured your business so you can take time off without feeling over-stressed? And what successful tactics have you used to turn your vacation time into a boost in income?