Hello and welcome to part 2 of 15 Days to Running Your Successful Freelance Business. If you missed part 1, Finding Your Perfect Career, just hop on over there now and read this.
Now that you’ve figured out what it is that you want to do as your freelance business, you need to figure out HOW you’re going to go about it. And the best way to get clarity on your goals is to write a freelance business plan.
Now, before you go all ‘no! I hate this. It’ll stop my creative flow!’ I will just say this:
Failing to plan is planning to fail.
Yep, it’s a cliché, but that doesn’t make it any less true.
I appreciate that as a self-confessed planning freak the thought of writing a business plan should fill me with joy. It doesn’t. So, in other words, I feel your pain.
However, it’s true to say that if I didn’t have a plan there are two main areas that I would struggle with:
1. I would have no Plan B for when things didn’t work out the way I had planned. This has happened to me and, yes, it is likely to happen to you too
2. And how on earth would I know if I’d been successful?
You might look at number 2 and think that the obvious answer is: when I’ve made my first sale. Or when I’ve made the same money as I earn now. Or, when I’ve made my first million (we’ve all got to dream). But the point is, if you don’t set yourself specific business objectives and goals that you want to achieve within certain timescales, how will you know what success really looks like?
Too many freelance businesses go to the wall because they didn’t have a plan. They relied on word of mouth for reaching clients and then had no back up plan for when that stopped working for them. Or they had a couple of clients that took up all of their time, but no other income streams – like passive income – for when those clients (inevitably) disappeared.
I know you’re creative and like to fly by the seat of your pants. You like to think on your feet (and any other well used phrase that springs to mind). And that’s great but when you hit a curve ball – or face a fantastic opportunity – chances are you will be less able to turn these situations to your advantage if you haven’t developed a well-thought out business plan.
Even the most successful entrepreneurs who dream up business ideas in their sleep have business plans – which is, of course, why they are so successful.
My final word(s) on why you need a business plan.
It will create even more flexibility within your business.
You will have planned for aspects not working out and will know what your next move needs to be, so won’t waste time trying to figure it out as you go. You’ll be putting your Plan B into action while the person without the business plan will still be figuring out what their Plan B is. (Incidentally, at the moment you are that person without a plan and are at risk of being overtaken and out manouvered by your more organized competitor).
Or, on a more positive note, when you are achieving even more success than you thought you would, you will be able to capitalize on that. Potentially you could expand your business or move into new areas because you will have already considered the options available to you.
OK, that’s me. Lecture over. Now on to writing your freelance business plan itself…
Business plans tend to cover a period of around 3 to 5 years, and for your first freelance business plan it might be an idea to write this with a 3 year time frame in mind, but there’s no hard and fast rule on this one.
However, remember that the best business plans are not exercises in creating plans that get filed away on the shelf. Oh no. The best business plans have one common aspect.
They are dynamic.
They are referred to at least quarterly and definitely once every 6 months. And they are revisited and reviewed every year. Tweaked to take into account what has actually happened that year.
In my first year of business, all of my work came in through tenders. In my second, all came in through word of mouth – a trend that has continued, but that I hadn’t anticipated at the start of year 2.
So what goes into the plan?
The areas that you need to include are:
1. What is your business? – This is the easy part. Describe in a few sentences what your business will do and whether you will offer service or products (or both).
a) What is your overall vision for the business – this essentially means – where do you want your freelance business to be? Do you want to be the top place in your State that people think of to buy cupcakes (I know I’ve mentioned cupcakes in a few posts already – what can I say? I like cupcakes)?
b) What is your mission – or in other words, how will you achieve your vision? Maybe you’ll provide cupcakes for special occasions, such as parties and weddings, selling through local farmers markets, while running baking classes for local kids.
c) Who is in the business? If you’re running a freelance business, it’s likely to just be you, but if you’re going to involve or work with other partners, put this in here. I partner up with other freelancers who provide complimentary services to mine. Or, if you use the services of a web designer, virtual assistant, book-keeper etc. include these in here.
2. Objectives – what are your business goals over the next 12 months, 2 or 3 years?
3. Who are your customers? Think about who your ideal client will be. What are they looking for and why will they buy from you? (I’ll be doing an entire post on your Ideal Client as part of this series, and will go into more detail on this then).
4. Market Analysis – Are there other small freelance businesses within your niche? (Incidentally, if the answer to this is no, you may need to ask yourself why. While you might think ‘yeah! No competition’ the reality might be that there’s no market).
5. Products & Services – which products and services will you be providing e.g. face to face consultancy/design services plus online eproducts. Physical cupcakes plus online baking tutorials and recipe books.
6. Delivery – how will you get your products and services to market? Are you providing a purely online business – such as a blog or online training – or will you be selling physical products? If the latter, you need to think about how you will physically sell and ship the product. If the former, what do you need to do to get your service or eproduct into the market place?
7. Pricing – think about how much you will be charging for each of your products and services in order to breakeven and make a profit in the longer run. This will give you an idea of how much you need to be selling each month, as well as how much you need to charge for your services in order to make enough money. If you’re not sure, here’s a nice little calculator to help you figure out what you need to charge based on your desired annual salary, annual leave, and the number of billable hours you will work each week.
8. Resources – what resources will your business need to help you to deliver your product or service? This can be as basic as a website and blog depending on your business model. Most freelance businesses are going to be more simple in terms of their resource requirements, but think about every aspect that you will need.
9. Branding – what is your company’s brand (again, I’ll be doing a whole post on this but now is the time to give some consideration to your branding). Branding is about more than just your logo, it’s your promise to your customers. Maybe you’re ‘the best mobile hairdresser in Houston?’ or ‘the no holds barred career coach’. If you’re still unsure about branding, wait for my full post on it or hop on over to The Entrepreneur where they have a post on the basics of branding for small businesses.
10. Marketing & Promotions – how are you going to reach your ideal clients? What different marketing channels will you use? To do this effectively you will need to know which channels your ideal clients are already accessing.
11. SWOT – Now you need to consider the Strengths, Weaknesses, Opportunities and Threats to your freelance business. Do you have fantastic networks – or are they weak? Are there gaps in your skills that you need to fill? Will you struggle to deliver your business over the long school summer vacation? Don’t just think about what each of these aspects are. Think about how you will capitalize on strengths and opportunities and how you will overcome weakness and threats. (N.B. strengths and weaknesses are aspects that are internal to the business – such as your skills and networks, your weaknesses, gaps in your knowledge – while opportunities and threats tend to be external factors that you don’t have direct control over – such as potential partnerships or new markets opening or a new business identical to yours opening up in your market.
12. Financials – what are your start-up costs, your monthly expenses and what will be your overall spend each year? You also want to think – realistically – about how much you see your business earning each month, quarter, and year. Try to assign income to particular streams – so for example, if you’re offering one to one consultancy, selling ecourses and will write an ebook, how much do you anticipate each area bringing in?Need to write a freelance business plan? Read this & RT Click To Tweet