15 Jun Retainers vs Projects: The Pros and Cons
Any entrepreneur will tell you that consistent cash flow is the life blood of a successful business. And when we first started Black Mountain we naturally thought that this meant securing as many retainer clients as possible, in order to have a predictable income and workload in the future (as well as to plan better too).
While retainers have definitely helped us to establish a thriving business, we’ve realised that there are plus sides to once-off project work that retainers can’t offer. We’re learning this more and more as we progress through our business journey, and we’re finding that the answer may lie in having a mix of the two, with some retainers and some projects every few months. Here are some pros and cons of each that spring to mind:
- Predictable cash coming in, and you can typically invoice for the upcoming month’s work upfront.
- You get paid the full amount, even if the client doesn’t make full use of the services/hours you’ve offered to them.
- Predictable workload: there are a certain number of hours or articles that you can assign right at the beginning of the month.
- Strong relationships form with the client as you start to work out how they like to work, which means more streamlined communication.
- You get context. You know the client better with each passing month, and you become more entrenched in the brand and the audience they are trying to reach.
- You can upsell. Generally you’ve proved your worth time and again, so pitching for any once-off projects of theirs is much easier.
- It can get difficult to come up with fresh ideas for the same product or service, month after month.
- You need to be available whenever your client needs you so you need to be prepared to prioritise their work over others.
- All your eggs are in one basket. If two large retainers make up the bulk of your income, your business will be at huge risk if one client decides to end the contract.
- Scope creep. Because you’re available whenever the client needs you, you need to ensure that no scope creep happens and that you’re only delivering as per your contract sets out. While it’s great to offer added value now and then, you don’t want your time to be monopolised and for the contract to stop making financial sense in terms of the time it takes up.
- You can take on smaller projects that are interesting to write about, for companies you are passionate about.
- Projects can provide a bonus source of income on top of your predicted retainer revenue.
- You learn about some really varied topics, from pizza to plumbing, luxury travel to legal services.
- There can be much time taken up by finding your feet in terms of the briefing process, writing style and other finer points of the project. There can also be misunderstandings as you forge your working relationship together.
- Deadlines are often tighter and work schedules more demanding, as you’re working towards a shorter-term goal. This can also make it difficult to schedule workloads sensibly, so you end up working late nights or early mornings.
- Once the project is finished, so is the payment! You may have got used to that amount of money for three months and suddenly – it’s no longer coming into your bank account.
So who wins if you pitch Retainers vs Projects? Ultimately we think that the sweet spot lies in finding a perfect mix of the two. So you can have predictable income, a varied list of clients, and the chance to write on fresh subjects that really interest you. THAT’S the way to have your cake (and eat it too;).