Hi, yes you're right it's "feast or famine". It's an incredibly stressful business to get into and once you get to the point of having a handful of staff it gets even harder. Then you have to worry about bringing the work in to pay your staff, nevermind yourself! I had a great time in the graphic design industry and I'm really proud of what I achieved. Mind you, I'm pretty sure I've shaved a few years off of my life thanks to stress! I have since moved onto products, more specifically within the vaping industry as it's a very rewarding area to be working in at the moment. Good luck with your design career! I wrote this article a couple of years ago, I might go through it and add more as I've learnt a lot since then.
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There is a Catch 22. If you are in production you are not selling. If you are selling you are not billing. Also if you are using many of the freelance sites to prospect there are a hundred people willing to do the work almost for free.
I agree, the freelance websites have been ruined by cheap labor. On top of that you have tools like Squarespace which are taking a huge share of the startup / small business market away from freelancers.