Let’s say you’ve come into some money and are interested in investing it. Would you put all of your eggs in one basket or would you diversify your investments in the hopes of protecting them from the ups and downs of the marketplace? I’m no financial expert, but diversification seems like the obvious answer.

Just as you would diversify your financial portfolio, you should diversify your freelance portfolio. In the end, your freelance portfolio should help you determine how much time and energy you put into specific projects, and allow you to rearrange your work depending on your income needs and the current work market. As Sara Horowitz points out in The Freelancer’s Bible, it should let you decide “how work fits into your plans, not the other way around.”

So why is a balanced freelance portfolio important? It’ll help you in 3 important ways:

• It helps lessen dry spells: We’re all familiar with the fits and starts of freelance life. Sometimes deadlines and work schedules overlap in a way that makes for incredibly busy weeks, other times you’re scrambling for a gig. For those times when you’re waiting for a late paycheck, a project is suddenly put on the back-burner, or you finish a project with nothing lined up, a balanced freelance portfolio will help you land projects with less effort, or make those dry spells fewer and shorter.
• It helps you determine which projects are best for you: Quality trumps quantity when it comes to choosing projects. Your freelance portfolio will help you weigh your projects and arrive at a balanced mix that will benefit your income goals and the future of your business.
• It helps you increase focus on your goals and next steps: Nobody’s perfect, and chances are, neither are your freelance goals. Your freelance portfolio will help you see the inconsistencies in your game plan so that you can change your goals for the future. This might mean growing your network, increasing your cash flow, or replacing a blue chip client (see below).

That all sounds nice, huh? Now let’s take a look at the 4 levels of a balanced freelance portfolio:

Level 1: The Blue Chips
When work is nowhere to be found, who are your reliable sources of income? Who keeps the lights on and the pantry full? These are your blue chips.

These clients make up the core of your freelance portfolio. They are the ones that you develop a rich relationship with and even exchange holiday cards and treats with when the time is right. Like blue-chip stocks, they’re the ones that you’re not going to let go of very easily. These are your income anchors, your steady paycheck for down times, and your priority.

These clients will often be the ones that get you referrals, which can oftentimes turn into new blue chips.

Remember not to depend on just one, however. If its a corporate gig, a major cut or the snap of a suit’s fingers can result in a gig getting canned. If it’s a smaller startup, you might be dealing with fitful cash flows or changing strategies effecting your project. For these reasons, never depend on just one blue chip client.

Level 2: Growth Investments
Blue chip clients often operate on the basis of, “tell me what you need and I’ll do it.” With level 2 clients, you can begin by saying, “this is what I do, and this is how my work can help you.” In that way, these are gigs that will have a quicker turnover rate than your blue chips, but if handled properly they can help stabilize your career. Think about this stage as a blue chip incubator.

These clients will come primarily from fellow freelancers and client referrals.

Level 2 gigs are challenging because this is where you begin to take control. It’s up to you to find those opportunities that others don’t see, network, and take real control of pricing your work.

The goal is to have these gigs become your blue chip gigs, so be sure to trust your gut when it comes to choosing projects. Does it seem like the project will cost more to keep than to lose? Don’t force yourself to take it. Making money should not be your primary interest when finding level 2 clients. You are cultivating and nurturing these clients in a way that will stabilize your career down the road.

Level 3: One-Shots and Long Shots
You know those times that you need money? Like...you really need money now? Well, these are the gigs that can provide quick cash but can also be deceptively difficult to attain.

Level 3 gigs are typically found on intermediary websites such as Monster, Indeed or other job boards which make them easy to search for, but highly competitive. If your resume or application materials are ready to go, applications can go in fast.

Given the competitive nature of these gigs, pricing is hugely variable. You’re going to be dealing with companies that get to pick and choose their hires from a global pool of available talent which inevitably drives their prices to artificial lows that don’t reflect the true value of the skills required for the work.

Of course, there is always the chance that a blue chip client will come from level 3 gigs, but most of the time they will simply serve as a quick, but not necessarily easily attainable, way of making some extra cash.

Level 4: New Ventures and Growth
These are the ventures that you’re creating on your own or with others. They’re services, products, and alliances that have the potential to bring income in the long-term future. This could mean speaking gigs, seminars, online courses, or writing a book.

A lot of this is going to be speculative. You’ll need to take an educated guess as to where the market will be in a few years, generate ideas surrounding your hypothesis, and plan something that can stay on your radar but won’t cut into the time you need to make your living.

This is going to take time, so don’t rush it. Set a realistic yearly goal, and then break that down into achievable weekly or monthly steps. Treat yourself like a client. You wouldn’t deliver a project late to a client would you? Don’t let it happen to your own project either?

In the end, remember this equation:

Optimal clients + steady cash flow + meeting your income goals = balanced freelance portfolio

How do you balance your freelance portfolio?

Everything you need to know to have the career of your dreams--on your terms. Pick up a copy of The Freelancer’s Bible now.