Business Musings: The Freelance Scramble

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In last week’s blog post, “The Hard Part,” I mentioned the freelance scramble in passing. I explained it in a parenthetical phrase thusly:

The freelance scramble is, in short, pivoting to replace money lost with a new way of earning money. Tough, and not the way most people usually think.

I knew that most people would just pass over the phrase and not give it too much thought. A few folks posted about their freelance scramble, but most writers—particularly those caught in lost income and the need to rebuild their careers—have no idea what, exactly, the freelance scramble is.

Writers who become successful freelancers learn how to manage money. But more than that, they learn how to manage cash flow.

Cash flow is the way that the money comes in, not how much is owed or how much will be paid.

For example, a freelance writer with traditional publishing contracts will have the pay schedule delineated out in that contract. The lump sum advance is listed, along with the way it will be paid. For example, many contracts these days look like this:

1/3 on signing

1/3 on acceptance

1/3 on publication

So, if a writer gets a $12,000 advance, she’ll get $4000 on the signing of the contract, $4000 on the acceptance of the manuscript, and $4000 on publication of the book. Those three events, in traditional publishing, often happen in three different years.

(Once upon a time, advances were large enough so that the writer wouldn’t have to have a day job. But can you live on $4000 per year? Do you know any midlist writers getting $12,000 advances these days? Okay, that’s all a different blog post.)

What writers soon learn is this: $4000 on signing doesn’t mean the day the contract is signed. It means “sometime after the contract is signed, a check will appear—maybe 30, 60, 90 or 120 days later.” Acceptance is worse, because the manuscript has to be accepted first—and that can take months after turn-in. Then that 30, 60, 90 day thing starts all over again. And publication—well, the payment doesn’t come when the book comes out. The invoice gets triggered in the publishing house, and the writer then gets paid some undefined period of time later.

(In the past, I did my best to define that period of time by contract which was about as effective as pissing into the wind, and sometimes a lot less pleasant.)

Successful freelance writers learned how to manage the vagaries of lump-sum checks arriving at irregular intervals. Some writers had several publishers. Other writers augmented their book publishing with short fiction or nonfiction or tech writing.

The problem with all of that, though, was the same: Each company paid the writer in its own way, and in its own time.

Long-time freelance writers are very happy with their indie publishing careers because the checks from the online retailers arrive at regular intervals. Most pay monthly. A few pay biweekly. Some pay every quarter (I’m looking at you, Smashwords.) And the writer always knows what the payment will be.

For example, if a writer’s January sales figures on Amazon US were $1,000, the writer knows she’ll get a $1,000 from Amazon in March. The same with the other online retailers. Generally speaking the writer knows how much she’ll get paid two months before she gets her check.

Which is better than that ill-defined system traditional publishers have. But it’s still dicey. Because, as the KU Apocalypse proved to so many writers, you can’t count on earning the same amount of money in September as you did in January.

At some point, all of freelancing is by guess and by golly.

This is where the freelance scramble comes in. Long-time freelancers learn to hope for the best and plan for the worst.

Yes, it would be nice to make that $1000 every month on Amazon, but what happens if sales drop over the summer?

Or let’s use larger numbers, shall we? The life-saving numbers that a lot of midlist writers have been earning. I’m going to go with $10,000 per month from various online retailers for the indie writer because that’s a nice number that I can add up quickly.

It’s also a number that a lot of midlist writers have been hitting in their publishing careers. It’s not the number that the indie bestsellers make, by a long way, but it works for the purposes of this article.

Let’s hypothesize this: An indie writer grows her backlist and eventually hits $10,000 from all channels. She does that three months in a row: October, November, and December.

During the last week of December, our fictional indie writer sits down and plans the next year’s finances, thinking she’ll make $120,000. She also thinks she’s being conservative by not getting the same increase in income that she got the year before.

Maybe she takes on more debt, maybe she spends a little too much over the holidays, or maybe she does something seemingly innocuous like setting up automated payments for everything from her mortgage to her car payment.

And then she makes $9000 in January and $6000 in February and “bottoms out” at $5000 in March. Never mind that the $5000 is double what she made the previous March. Now, she’s “losing” money. And because she set up those automated payments, thinking the income would remain the same, she actually overdrew her account for the first time since college. Now she’s got fees and decreased income, and she feels awful about an increase in her income.

Because she’s not used to the freelance scramble.

Think of the freelance scramble as one of those complicated dances that you watch from the sidelines and think you can never learn the intricate moves. Or think of it as a popular sport from another country that looks like a group of people running chaotically across a field. Clearly, they have a plan in mind, but the plan’s not obvious to someone who has never seen the game before.

The freelance scramble’s just like that. If we’ve had any financial education at all (and I say “if,” because in America, most people get none until they go out on their own and wing it), we learn how to handle a paycheck. We know we’ll get roughly $2000 every two weeks for as long as we have the job, and we know that salary has to cover all of our bills every month with some to spare (if we’re lucky).

We can’t rent a $5000 per month house, we can’t have a $3000 monthly car payment, and we can’t take $100,000 vacations on that salary. Not only is that common sense, but the arithmetic is fairly simple.

But a freelancer can’t rely on $2000 every two weeks. Even if the freelancer has indie income combined with traditional income, and even if the freelancer figures out how much she’s owed for the next six months, she can’t guarantee that the money will flow in the time that it’s allotted.

The traditional income is generally late. The indie income will arrive on time, but the freelancer has no idea what that income will be six months hence.

Which means that the freelancer must learn the scramble.

Here are some of the elements of the scramble, in no particular order:

The Freelancer Needs Three Cash Flow Charts:

The first chart shows how everything might flow.

The second chart shows how it probably will flow.

The third chart shows the absolute worst case scenario…assuming the freelancer does get paid.

There is a fourth chart that every freelancer keeps in his head, and that chart is what happens if the money doesn’t come at all. We’ll get to that next week.

The first chart is always the best case scenario. What would happen if freelancing were part of the real world which, unfortunately, it ain’t. Most freelancers have no clout with the organizations that pay them, so writers (and other freelancers) often get paid late. Experienced freelancers learn how to gain clout and/or how to leverage what little clout they have into making certain they get paid. I’ll discuss that in depth next week.

The second chart is the realistic one. If an account promises to pay on thirty days, plan for ninety. If your biggest account is a traditional publisher, plan for 120 days after the promised due date.

If you’re an indie writer, plan for the lowest level of income you’ve had in the last six months and extrapolate that forward. In other words, our fictional freelance heroine should have planned for her September income, whatever it had been, not her astronomical (to her) October, November, and December income.

Or to make our math easier, she should have planned that her income would be $2500 from the various freelance sources and then been pleased whenever it went past that amount. She would have been happy with January, February, and March instead of disappointed. She could revise the income projections in June, and provided her new baseline had become $5000, used that instead.

The extra money wouldn’t have been spent, then. It would have been banked and used to pay off loans or put into a reserve account. Instead, in our fictional example, our heroine ended up owing more money after earning the most money of her freelance life. (This happens to first-time freelancers a lot.)

The third chart happens to every freelancer, more than once. Companies who owe the freelancer go bankrupt. Some companies simply refuse to pay. (I’ll deal with that too in a later part of this mini-series.) Other companies run into short-term difficulties—even big companies. I’ve mentioned before that after 9/11, Dean and I did not get paid by our gigantic traditional publishing companies for six months. A major crisis happened in New York in 2001, and it had an impact on the publishing industry—including writers across the country.

Shit happens. Freelancers must plan for the shit, even if they never put that plan into action.

Have An Easily Accessible Reserve Fund

There will come a time when all of your options fail you. If you have enough money to get through the next six months or even the next three, you have bought yourself time to scramble.

Our imaginary freelancer should have banked the extra money in October, November, and December (after buying herself a nice little [and I mean little] something as an acknowledgement of the coolness of what has happened). If she had banked half of that $10,000 per month, she would have $15,000 to get her through rough times.

If she banked everything over the expected $2,500, she would have had $22,500 to get her through rough times.

Yes, I know. It’s not sensible to put that much money in a standard bank account that doesn’t earn much interest.

It’s not sensible…when you have a day job that pays regularly. But when you’re freelancing, you need a good cushion that you can move money from quickly without penalty. How much goes in that poorly earning savings account is up to you.

It should be enough to get you through three to six months. Then you can put the money in other non-risky things—not the stock market or a 401K.

In fact, the best thing to do after building up a reserve account is to pay off as much of your debt load as possible. I mention this in the Freelancer’s Survival Guide, but it’s part of the scramble.

Pay off your car—or buy a car with cash. It’s better to have a car and no car payment in a time of no money than it is to “save” money and have a lease or pay over time.

Again, this is all counterintuitive to the way that day-job people live, but you’re not a day-job person.

If possible, pay off your mortgage as well. And pay down your credit cards every single month. There might come a time when you need to charge them back up again (in one of those emergency periods), so it’s better to have them empty most of the time.

Right now, with interest rates so low, it’s better to pay off things that have high interest rates than it is to put money in certificates of deposit or other interest-bearing accounts. If interest rates paid to savings accounts go up, then you might have to compare the interest rate on your credit card or your car loan with the amount you can earn in a CD. If your credit costs you more than you will earn in a CD, then pay off the credit.


That way, you’ll have more money to get you through the tough times. You won’t be worrying about keeping a roof over your head or being able to drive to the post office. And believe me, I’ve known freelancers who’ve gone through that.

Before you add an expense as a freelancer, imagine paying for that item in times of no money. If you can’t imagine paying for that thing when you’re broke, don’t get it in the first place.

That goes double for trips or vacations. Once the trip is over, and your favorite client disappears owing you $20,000, will you regret taking the trip? Probably. So think it through—and again, only travel when you have the money to pay for the trip up front.

No Freelancer Should Ever Work For Just One Company

The State of Oregon has a name for freelancers with only one client—employees. Yep, in the state I live in, one sign of a freelance business is more than one client.

Hmmm…a state encouraging common sense. That’s not really the state’s reason for doing so, but that’s the net effect.

Don’t put your eggs in one basket ever. As a freelancer, that’s a recipe for disaster, as those who got harmed in the KU Apocalypse found out. One change, one bad decision by the company you’re working with, and you could lose everything.

It’s a hard lesson to learn, particularly when one client or one online retailer treats you really well. But you need to look at the large client as an opportunity that will go away.

When I talk about negotiating a contract, I tell writers they must imagine that the nice person they’re negotiating with will move on and be replaced by a demon from hell. That evil demon from hell sometimes replaces the nice person who treats freelancers well inside a business.

The thing is, the demon from hell can show up at any point. And the freelancer might not notice until he turns in the latest project or he gets a seemingly innocuous e-mail explaining that terms of service for the online retailer have changed ever so slightly.

What might seem slight to that online retailer might be huge to the freelancer—because you’re in different businesses, after all. Your needs might no longer coincide.

This happens in traditional publishing as well. Sometimes you will hear writers talk about being orphaned. What they mean is that the editor with whom they’ve been working has been fired or promoted or laid off, and another editor takes the first editor’s place.

Sometimes the new editor is better than the previous one. That happened to me more than once. But often, the new editor plays those stupid corporate games that drive me crazy. You know the one—where the new editor destroys everything his predecessor did so that his predecessor gets no credit for anything, and the new editor has a blank slate. Editors will deliberately tank a previous editor’s acquisitions to make certain that the new editor gets credit for improving the department.

Those acquisitions? They’re books…from writers…who put their hearts and souls into the project.

It’s ugly and it hurts, and it happens too often—even now. At least now, writers have a place to go.

But indie writers make the same mistakes as traditional ones. When someone asks you—the freelancer—for exclusivity, you say no. If you’re told that no is not an option, then you walk away from the company and/or the project.

Because your independence is what matters. Always.

Never ever work for one company.


Never Write Only One Thing

The writing corollary to never work for just one company is never write just one type of story or article. I often encourage writers to stretch themselves. This isn’t just so that they grow as artists (although that’s a side benefit). It’s also so that they have other skills to rely on when the going gets tough.

As I mentioned last week, subgenres can lose sales as readers tire of the subgenre. Or when a writer loses her best market, that market might be the only place which takes whatever it is that the writer specializes in.

Make sure you have other specialties.

Yes, it’s appropriate to focus on what’s working at the moment, but keep a toe in something else, because what’s working at the moment might be passé in 2017. Be prepared for that. It might never happen to you, but if it does, you have another skill to draw on.


Yes, there’s a lot more to the freelance scramble than those few things I’ve listed above. As I started to write this, I realized I have enough material for at least two more blog posts. So let’s call this an accidental series.

I’ll add more plays to the scramble next week.

One reason I changed the hard deadline on my business blog was so that I could do the freelance scramble. Ironically for me, the scramble isn’t how to run around to get enough for the bills, but how do I fit all the work I want to do (and will get paid to do) into my work week without shorting myself on sleep.

That’s what indie publishing has done for me. I’ve kept up part of the traditional career, added editing back in, continued teaching, and I’m writing all the projects I want to write—including this blog.

You folks are what makes the blog fun, though. I love the comments and I greatly appreciate the donations.

The money I earn on the blog factors into when I write it. If the earnings decrease, the blog must (of necessity) move down my to-do list.

So, if you’re enjoying the blog, please let friends know about it, and/or leave a tip on the way out.

Thanks so much!

Click Here to Go To PayPal.

(Yes, White Mist Mountain is my company name)

“Business Musings: The Freelance Scramble,” copyright © 2015 by Kristine Kathryn Rusch.



19 thoughts on “Business Musings: The Freelance Scramble

  1. This is the perfect explanation of the scramble! Projecting away from today’s norm, to what an expected average might be. I’m a multi-published hybrid author, my annual income varies. I’ve learned to underestimate to avoid problems, and mostly because of smart blogs that warned “Don’t assume a norm based on today” when I first got published. Thank you for posting this, we’re linking to it on Seekerville and I hope people see the common sense of this!

      1. Excellent advice, Kris. In fact, even though I’m familiar with most of the financial advice and suggestions, I greeted appreciate your comments about having more than one speciality. The exact opposite of the advice I received from two NY editors at a writers conference. You make a good argument and it supports what I’m drawn to do — multiple genres.

        Now, I’m off to share this with my writing buddies and to leave a donation.

  2. Thanks Kris.

    When you think about it, this is all sensible advice. My hubby and I have lived this since we married. Even though we both had day jobs, I always insisted on “Emergency Fund”, “Long Term Saving”, and on paying off debts as fast as possible. The emergency money was in a separate bank account from long term saving. Long Term savings were NEVER touched. If we couldn’t pay cash, we darn well figured what the monthly burden would be if we had to take out a loan. Emergency money paid for those unexpected things like the car or refrigerator dying.

    Thanks for sharing.

  3. “Never ever work for one company.


    I agree. I always tried to work for more than one company, either as a freelance journalist or as an indie author. It’s not only the ebook platforms. I also go to signing sessions on different places owned by different businesses.

    I also write both Science Fiction, Fantasy and thrillers stories (not at the same time, though).

    I’m curious, Kris: do you consider your teaching sessions as your daylife job? I mean, have you set up your business so as to make a living even if you didn’t sell a book? I don’t mean to be tactless, I’m just wondering how much prudent you are?

    1. Thanks, Alan. And no, my teaching is not my day job. If I think of it that way, I’d quit right away. I make soooooooooooo much more money writing. Ridiculous amounts more. My teaching is paying forward for all the help others have given me. Sometimes Dean and I talk about stopping the teaching, because it’s the thing that can actually go, but we learn from it as well. I suspect when we get tired or the learning stops, we’ll probably give it up, since it does take time. Right now, we’re having fun.

  4. Extremely useful, especially when I’m crunching my number for tax time.

    Paranoia that I’ll never earn another dollar from writing? Check.
    Cash reserves? Check.
    Writing more than one genre, for more than one company? Check.

    I’m sure you know this, but the print market (newspapers & magazines) is another example where freelancers have seen huge drops in income. And part of the scramble includes writing non-fiction and short stories as well as novels.

    I don’t know if I have the stomach for the full-time scramble, but maybe some readers will find these blogs inspiring, as I do:, (Mr. Frozen Toque has advice for Canadians),,,

    Off to donate, and then a night shift.

  5. Funny you should mention NOT specializing in just one subgenre. I’ve been getting the advice to write exactly the same kind of book for the past several years, from agents, editors, and indie writers, too. They all say it’s much easier to market a stream of similar novels, and I can see their logic. But that’s not what I want to write. And now you’ve given me “permission” to go my own way, as a business decision.

  6. This is timely….

    As someone who’s first self-published novel (co-written) just went up on Amazon, and freelance writing for a gaming company, this has my full interest. In one column, you Kris has managed to lay out a plan that every freelancer can follow without any problems.

    I haven’t been reading this column as religiously as I should over the last six months. I need to start doing so again.


  7. My wife and I learned this the slightly hard way when our old business took off and we transitioned out of our jobs. And there’s the hidden killer if you do make job-replacing income for yhe first time: last year’s taxes. I’ve seen so many people reach their initial dream in their business only to go into debt to cover the taxes they didn’t allocate, and it can take years to reverse that downward spiral, if it ever happens. Took us a while and we’re in good shape going forward. But I’m happy to keep my data consulting sideline forever to make the writing more fun than necessary. (Especially for my wife’s peace of mind: misaligned spousal tolerance for variable cashflow can test or end marriages in a hurry).

    Thanks for sharing your wisdom on the subject. Hope a few can dodge similar problems, or at least be somewhat prepared.

  8. I’m currently the supporting spouse with the time-clock job. It’s wonderful to see you lay out the nuts and bolts on freelancing! Believe me, I’m taking notes and comparing our current preparations (what if I lose my job? What if we both go full-time freelance?) to see if we missed anything.

  9. This is so very important. I want to double down on many of the things Kris says from my own freelancer experience… it’s worked for over 10 years.

    1. No Debts – that’s a obligation to pay even if you’ve no money. So pay down your debts and stay out of debt… the sole exception is a mortgage… and pay that down as well.
    2. Cash Reserve – I keep at least 6 months expenditure saved up but I try for 12 months. That means that if the very worst happens I have months to regain my feet. And if an unexpected big expense comes along then I’m covered for that hit, and still retain some buffer.
    3. Pay yourself a salary from the Cash Reserve that allows you to maintain that reserve from the income coming in. I think of it like sizing the hole in the bottom of a bucket so that the flow of water coming into the top equals the flow coming out. But do pay yourself a salary and buy health insurance… that’s as important as a salary. And personal injury insurance for those even with government healthcare… they may patch you up but they rarely provide an income after a debilitating injury.
    4. Fund projects out of cashflow – not from the Cash Reserve. Those projects might be expenses for a book, but they may also be a holiday, or any discretionary expenditure. The important thing for me is to maintain that Cash Reserve.

    And Kris is right – holding cash in the bank even at low interest is important as it is not investment – it’s your life line. It’s worth foregoing a high return for the safety of money in the bank. All companies hold a cash reserve even as they take out loans and mortgages. Cash on hand is vital to keep a company running.

    5. When your Cash Reserve gets over your 6, 9, or 12 months expenditure level (hopefully because your income has increased) then you have two options: –
    a) increase your expenditure level / increase the size of the hole at the bottom of the bucket… i.e give yourself a salary increase.
    b) invest it in long term investments and don’t touch it. Ever. The time will come when you will want that investment to fund retirement.

    Probably a bit of both a & b because increasing your wealth now and in the future is the reason for working as hard as you do at any business endeavour.

    But yes – clearing debts, and saving that Cash Reserve is not easy. That’s why you should keep your job until you have that Cash Reserve.

    This is a pattern I’ve kept for 12 years now… and it’s worked mostly. Certainly Kris is right – never think the last pay check is going to recur regularly… until it has for 6 months to a year or so. And the way I self correct is to maintain that Cash Reserve.

    There’s another analogy for the Cash Reserve that should hit home. Consider a city drawing water from a reservoir instead of directly from a river with a seasonal flow. Sure there’s a bit of evaporation but the reliability of the water supply is much more assured.

    So in 12 years I’ve not had to scramble very much… except when the buggers don’t pay me… but that’s the point of the Cash Reserve.

  10. My parents taught me about how to handle money. They were farmers and there was no guarantee of monthly income there either. You had to diversify and do a little of this and little of that. I see writing as the same thing. That’s why I chose to be a multiple genre writer. Hopefully we’ll eventually see income streams from all these pen names including my own name. I have a long way to go in achieving any of this but I know how to plan ahead thanks to my parents, thank god.

  11. Love it when you talk money and business, Kris! These are excellent suggestions. Thanks for putting on your green visor and talking numbers–especially during tax time. More, please!

  12. This. A thousand times this.

    My publishers have always been pretty good about sending checks on time. I’ve only had about one in five checks go astray. Funny how the mail loses so many checks, but delivers the junk mail so reliably.

    Thanks for doing this series, Kris. I’m very much looking forward to the rest!


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