Are you running your freelance business like a serious business, or more like work you’re just doing for extra cash on the side? There is nothing wrong with the latter, but that’s the mark of a hobbyist, not a business owner. Successful businesses start out with business plans — even if it’s a simple business plan.
It’s the road map used to guide your decision-making for both short-term and future profitability. It’s how you’ll gauge how close you are to meeting your goals (or how much further you still need to push).
You can work ridiculously hard, but without laser-focus direction it’s like swimming in the middle of the ocean and wondering why you haven’t found the shore. I’ve paddled in the middle of that ocean and know from experience that it’s both draining and frustrating.
I declare today a day to stop paddling and create your plan for success. I’ll show you exactly why you need a simple business plan and I’ll even help you create one you’ll actually stick to.
A simple business plan clarifies your ambitions
Basically, a business plan is a formal statement of the goals you want to accomplish with your business, and how you plan to reach them.
Whether you’re a freelance developer, writer or graphic designer, you know how to create a product that clients are willing to pay for. But that doesn’t guarantee that your freelance business will be a profitable endeavor.
Your plan doesn’t have to be a long, drawn-out contract filled with statistics and profit expectations to take to Wall Street. It doesn’t have to be more than page, but it could span several.
In reality no one’s probably ever going to see this except you. Don’t let the pressure get in the way of nailing down your game plan.
Keep in mind that you might create several business plans based on your endeavors and the growth of your business. Your business plan will evolve when you start to gravitate towards or prioritize certain goals over others.
Start by defining your business vision
If you’re using your website to pitch your product, you should already have an About page to describe your business to your potential customers. Essentially, this is the vision you want customers to have of your services and skills.
Write down a statement that describes how you see your freelance business now and how you see it progressing in the next few months or even years.
For example, do you want to keep a few clients and have free time to develop online courses? Do you want to work nights and homeschool your kids? How long are you going to freelance? Is there an end goal?
Identify the stones on your business’s stepping path and create a story that defines you and your brand.
Set your salary goals
Most of us would love to earn an uncapped amount of money based on our amazing skills. But let’s take that down a notch to real world level. As Virginia Sole-Smith notes, if you want to earn just as much as you did when you worked the corporate circuit, take your previous salary and add 25 percent to it to create an “Accrual goal.”
This buffer takes project drop-offs into account so you’re not left scrounging for money when a big client suddenly goes elsewhere.
So let’s say you made $40,000 a year. That’s your salary goal. Adding 25 percent to that would make a total of $50,000 a year, which is your accrual goal.
Now if you break that goal down into manageable targets, you need to earn $12,500 every quarter; and about $4,200 every month to meet that accrual goal.
If you’re just working to put food on the table every week, you might be surprised by how far your actual revenue is from your accrual salary.
You might need to work on your rates to guarantee the financial goals you’re setting, which could be a really good thing as you may be undercharging for your awesome services (stop that!).
Establish your professional goals
You might be killing it in the WordPress developer role you’re currently in, but maybe you want to transition your business out of developing and into selling online courses about developing.
Don’t let this just be a pipe dream — make it a reality by adding it to your simple business plan and following through within a set amount of time.
Write down the goals you want to accomplish in your freelance business life. Whether that’s acquiring more clients and creating a team of employees under you, or working freelance until you save enough money to start developing courses, put it on paper. This will only solidify your intentions and make you work with a definite goal in mind.
Now add a timeline to keep yourself on track. Any time you accept new work, keep this timeline in mind and see if the extra distractions are helping you meet your goals.
Define your ideal clients
Again, if you’re using your website to write about your brand (which you should be doing!), you should already have something written about the types of clients you enjoy working with.
Maybe you want to work with small startups who need your advice and take it gladly without questioning your creative process. If you work fast, you might prefer operating for a set-price/project instead of an hourly rate.
Define what a perfect client means to you and keep this in mind when you’re hunting for new leads, or dodging ones that don’t fit your ideal.
You might also want to jot down ideas for how you’ll attract these clients (other than your fantastic website). Will you go out and hit the pavement? Or will you use virtual networking sites to find clients?
Add a brief section that outlines the marketing agenda you use for new clients. Go over those portfolio pieces again to make sure they reflect your current skills and expertise.
Having this plan in your back pocket will help when you’re looking for clients and feel unprepared to tackle the task of reaching out. It was a wise Ben Franklin who said: “By failing to prepare, you are preparing to fail.”
Putting it all together
As you can see, you probably already have most of the answers to these questions either written down somewhere on your LinkedIn profile or on the About page on your website (or in your head). Once you corral these motives to one centralized simple business plan, you’ll have a really good reference to work with.
Any decision you make for your business should be assessed through the lens of your new business plan.
You’re already self-motivated as a working freelancer — make sure you follow through with a plan to guarantee self-motivated goals and results for your business.
Also published on Medium.