Work on repeat

I had lunch at Lou Shang (楼上) last week. It’s a cafe whose decor is inspired by the look of Singapore’s HDB flats in the 80s, and I went before they closed for good on 14 July.

The cafe’s founder cited a few reasons for the closing. One of them: the cafe’s concept wasn’t designed to encourage repeat visitors.

​In his words:

“Every time I see customers coming in for the first time, they all look pleasantly surprised, but admiration doesn’t build habits.”

I agree with this sentiment. Personally, I might visit a cafe if it has an interesting concept. What really gets me coming back, though, is the food. The restaurant can look shabby, and I might have to swelter in a non-air-conditioned space, but if the food is amazing, I will happily return.

The reverse is also true, and true enough: while Lou Shang’s decor was nostalgically cool, the food wasn’t to my taste. Even if the cafe hadn’t closed, I wouldn’t have gone back 😅

Improve revenue predictability with recurring services

Earning sustainable revenue without repeat customers isn’t impossible, but it’ll take a lot more effort. So, if you’re freelancing, I recommend offering recurring services.

In other words, your services should be designed for repeat work, where clients can continue to hire you for the long term. This way, they’ll contribute more revenue to your business over time compared to a one-off engagement.

As a result, you spend less effort chasing new clients to maintain revenue. Your revenue is also more predictable since you know roughly how much you’ll earn from repeat work—especially if you’re charging pre-agreed rates.

For example: I write blog posts. Clients typically don’t want just one blog post. Instead, they usually want to publish at least once a week (or more) to keep their blog active. So, if they like my work, they might hire me for a regular engagement of 1 to 3 posts a month.

This means that even if I don’t get new clients, I’ll have locked in at least 1 to 3 posts’ worth of work per existing client every month—giving me a steady stream of recurring revenue.

Other examples of recurring services are:

• Social media post creation. Have you ever heard of a brand that publishes just one social post on their account and calls it a day? Noooo—they usually want 2 to 3 posts a week, and on multiple channels too.
• Website maintenance. Creating a website might be a once-and-done thing, but you can offer monthly maintenance services, e.g. fixing bugs and applying updates, to help ensure the client’s website performs well.
• Corporate video production. More elaboration on this below.

Get rehired on repeat

Are you currently offering recurring services? If you aren’t but think it’s a good idea, it’s never too late to pivot.

Long ago, I interned at a wedding video company that had a sister company specialising in corporate videos. The boss eventually closed the wedding video company to focus on the corporate video one because the former wasn’t sustainable.

The decision made sense: most people get married only once, which means they typically need wedding video services only once in their lives. So, when they buy, they’re removed from the pool of potential customers permanently.

In contrast, corporate videos aren’t necessarily one-off projects. Clients can need corporate videos for different events and campaigns, and so, they can rehire you on repeat. (I’m suddenly thinking of Shopee’s and Lazada’s cheesy monthly sale campaign videos here…)

I just checked—the corporate video company is still around, more than a decade later. If services with strong potential for repeat work can help one business survive for more than 10 years, they can do the same for yours.

More freelancer news

Don’t open a company if you just want to avoid tax

IRAS has taken action against 279 high-earners who tried to avoid paying income tax in various creative ways—one of which being registering a private limited company.

When you register a company (registering a sole proprietorship won’t work here), you can have all your self-employed revenue paid to your company instead of yourself. You could then save on tax because:

• Corporate income tax in Singapore is capped at 17% compared to 24% for personal income tax
• You can pay yourself a lower monthly salary using company funds (to reduce your personal income tax) and then withdraw money from the company via shareholder dividends/interest-free loans, which aren’t subject to tax => you get to take money out from the company at lower tax rates
• New companies also enjoy tax exemptions for their first 3 years of tax assessment

BUT…IRAS can see through these schemes. E.g. if you declare an abnormally low salary compared to what others in your profession typically receive. (When filing your taxes, you also need to declare your self-employed profession, which gives IRAS data on general salary ranges to compare against.)

Then, if IRAS decides that you started a company just to avoid tax, it can recalculate your personal income tax as if you didn’t have a company. AND you might have to pay a 50% surcharge on the amount of extra tax you need to pay.

For example, if IRAS finds that you owe another $100,000 in taxes after the recalculation, a 50% surcharge on top of that means you’ll need to pay $150,000 in total. 💸

​Read more about this news here (including how some doctors tried but failed to use their companies to avoid tax).

To be clear, starting a company doesn’t automatically mean you’re trying to avoid tax. If you start a company for legitimate reasons, e.g. to help with business expansion and hiring, this is fine. It’s still a good idea to pay yourself a salary at the market rate, though, and not try any dodgy tax arrangements.

For professional advice on optimising your taxes while avoiding (pun not intended 😂) the taxman’s ire, speak to a qualified tax advisor.