Note: Since it’s tax season, I decided to update a post from two years ago for this week with new information. I think that your client income distribution – meaning how many clients you have and what portion of your income each represents, is a really crucial part of increasing your income as a content marketing writer. It’s also important for reducing your risk as a freelancer. But it’s a really hard balance to get right. 

It was early 2015 and I was doing my taxes. I had had an OK year income-wise, but nowhere near what I wanted. But I had a large pile of 1099’s sitting on my desk, 14 to be exact. I realized that one of the reasons that I had not earned as much as I could have was that I had too many one off projects and didn’t have any anchor clients. My hourly rate is much lower for first time clients and I also spend unbillable marketing and ramp up time the first time I work for a new company. I have found that if I have more than a few clients with one off projects or even only a few projects in, then my income is lower.

I really think that having a few solid anchor clients is the key to earning a high income as a freelancer. For myself, I define an anchor client as someone who makes up about 15 to 25 percent of my income. Check out this article from Contently’s The Freelancer You Should Be Pursing Anchor Clients, and How to Do It to learn more about finding and keeping anchor clients. (Full disclosure: I was interviewed for this article)

Here are three questions to answer with your 2016 1099’s:

1. How many different clients did you work with this year?

Add up the number of different companies you worked with this year by counting your 1099’s and also adding in any clients who paid you less than $600. Think about how the number of clients impacted your earnings. If you didn’t meet your income goal this year, it is possible you made the same mistake that I did and spent too much time on new clients? On the other hand, if you worked with only a few clients, but they were mainly low payers then that might be your answer as well.

What My 2016 Looked Like:

2. How many one-off projects did you complete?

Go through your 1099’s  and put all of the clients that you only worked on one project for in a separate pile. This pile should be very small and hopefully not a pile at all. Most writers I know tell me that they try to only take one-off clients if they are very high paying or if the project is one that will lead to other high paying work.

What My 2016 Looked Like:

3. What percentage did each client represent of your total income?

On the flip side, calculate the percentage of your income for each client. If you have one or two clients that made up the majority of your income, you may want to consider diversifying your income a bit. While the goal is to have long term clients, there is a big risk in putting your eggs in not enough baskets. If you have one or two main clients and you lose one or two of them, often for reasons beyond your control, then you will have a huge hole in your income. I try to make sure that a single client makes up no more than 20-30 percent of my income.

What My 2016 Looked Like:

What did your 1099’s tell you this  year? What other questions do you use your 1099’s answer?