Does trying to start or scale your freelance business ever feel a bit like trying to navigate without a map? You’re venturing into a whole new world, but where do you turn? How do you know if you’re on the right path? These are questions you can answer by freelance business plan. (+ you can grab a free template at the end of the post!)
What is a business plan?
A business plan is a written document that guides you through the process of starting and managing your own business. They vary in length, depending on which details you choose to include.
Do freelancers need a business plan?
If your goal is to work for yourself full time, you have to think about yourself as a business owner. Writing out this plan one way for you to step into that and it will help you start thinking about freelancing in a new way.
If you already have a freelance business, you may have parts of your plan figured out, but you can still benefit from filling in the missing pieces.
Doing so allows you to get really clear on what your goals are. It also helps you think through the things you’ll need to do to reach those goals and the systems you’ll need to support you.
Why create a freelance business plan?
If you’re the type of person that loves lists and documenting your goals, a business plan may make perfect sense to you. If you’re not that type of person, you may need a few more details about how this fits into building a real business and finding success.
Here are three different reasons to consider creating a freelance business plan:
Get your goals out of your head
There are several studies that show the power of writing things down. This simple action makes it more likely that you’ll reach your goals. The same is true with creating a business plan. One study of more than 1,000 aspiring entrepreneurs over a six-year period found that those who created a formal business plan were 16% more likely to achieve success.
Understand your vision
Freelancers are looking to accomplish something specific, usually to work for themselves or to bring in more money. These are great goals, but they aren’t the only goals. There are many other considerations that you should keep in mind about what you want your business and life to look like. Go behind the “be your own boss” or money goals.
Track your progress
There are a lot of moving pieces to keep track of when you’re a freelancer. Honestly, it’s difficult to keep any of your business goals and processes top of mind if you don’t document them. That’s why creating a freelance business plan is so important. It makes it easier to get intentional about what you want to achieve.
What are the elements of a well-written business plan?
These are the elements we’ll walk through to create your business plan:
Part one: The basics
Part two: Your offer
Part three: You + your market
Part four: Operations
Part five: What’s really in it for you?
Now, let’s jump into creating your plan, step by step.
Part one: The basics
Think of these first four steps as the foundation of your freelance business.
Choose a name
You may choose to go under your name or to develop a unique name for your business. Both of these options have pros and cons.
Using your own name for your freelance business
This is the simplest option for most people. It’s easy for clients to remember and it can grow with you as your business evolves. If you end up changing the types of services you want to offer, you won’t need to rebrand. Everything can happen under one virtual umbrella.
Coming up with a business name
Going with a name other than your own adds a new level of complexity, but if you want your business to have its own identity, this is the best option for you. It’s also wise to start here if you see yourself growing a team or building an agency in the future.
In the section of your business plan, talk about why you’re starting the business. Look at all the reasons you want to start this venture and include that in your business description. How do you want it to impact your life and the lives of the clients you’ll serve?
Next, make note of the location for your business. This could be as simple as where you live, or you could make it a little more complicated if you want to become a digital nomad.
Part two: Your offers
Next, you’ll want to get into what services you’ll be selling to clients, and why they matter. This is the section where you’ll really dig into your entrepreneurial experience (or entrepreneurial spirit, if you don’t have experience yet.)
Products and services
What type of service will you offer for clients? There are dozens of options to choose from. Start by thinking about your interests and talents. If you’re having trouble figuring out what you want to do, this blog post on gig jobs can help.
Benefits of your product/service
Now, consider how your product or service will benefit the people that you’re offering it to. For example, I’m a copywriter and I know that I help overwhelmed marketing managers create the assets they need to showcase their ideas and support their campaigns. Other writers may focus on helping companies create content with the right tone, or keep up with their content calendar.
If you want to be a graphic designer that supports small companies, a benefit to your service might be that you’re providing assets that make your client’s brand feel visually cohesive. This section will look different for everyone, but it’s critical to understand why someone would need what you have to offer.
If you’re just starting out, this could be as simple as websites that need blog posts or small businesses that need logos. If you know what types of clients you want to work with already, include more details about your target customer. Remember: You can always do more research into potential customers as you figure out who you like to work with. You don’t have to worry about who your dream clients would be right away.
What problem you’ll solve
This aspect of your plan takes a little more thinking. Some people confuse the problem they solve with the service they deliver. The problem is deeper than that. Think about why your customers will come to you. This could be because:
- They don’t have time to do the tasks that you’ll complete
- They don’t have the necessary skills to deliver what you can
- Their team is small, and they have overflow work
These are a few of the common reasons that people work with freelancers, but do some digging to find out what some of the pain points are in your industry.
Part three: You + your market
At this stage, you’ll be doing some market analysis to see how you compare and how you can set yourself apart from others offering the same services.
Spend a bit of time doing research on people offering services similar to yours. This way, you can get a sense of their pricing, the packages they offer, and how they are presenting themselves to clients.
What makes you unique
Once you know what your competitors are doing, think about your competitive edge. How are you going to stand out from them? What can you offer your clients that is special? How is your approach or process something that sets you apart?
How are you going to get the word about your services out there? Will you use social media channels, go to events, or pitch your clients directly? All of these methods can work, but you need to determine what you’re comfortable with and what your target clients will most likely respond to.
Part four: Operations
This is my favorite section of the plan. You’ll turn your ideas into an online business that works and decide exactly how you want to run it.
Tools you’ll need
Consider any processes, software, systems, and tools you may need to do your work. This doesn’t mean you have to go researching specific solutions but it’s good to get an idea of the types of things you will need to do your best work.
For me, this is a word processor, an email client, and a computer with Google Chrome. The tools you’ll need might look a little bit different depending on what type of freelance business you want to have. These are some of my favorite tools for freelancers.
Next, think about what expenses you might encounter in your business. You can run a freelance business and without spending money, or you can invest money in your new venture to get going. This will depend on the tools and systems you have and what you may need to acquire.
When I first started my freelance business part-time, I didn’t have any expenses. However, one thing I did need to account for because I was freelancing on Upwork, was the fee that they would take out of my earnings. I consider that a business expense. If you plan to take payments via credit card, a small fee will be taken out of those payments as well.
These are just a couple of examples of expenses you may encounter. Be aware of them and how they may impact you. Cash flow management is key. You have to know exactly where your money is going.
Part 5: What’s in it for you?
It’s also important to go beyond just what you’re going to offer and how you’re going to offer it. You need to think about how your business is going to serve you, allowing you to meet your goals live the life you want.
Your financial goals
It’s no secret that all of us are in business because we want to make money. Wanting to make bring in cash is one thing, having a clear financial goal in mind puts you on a whole different level as a business owner.
I thought about this in two different ways when I first started freelancing. My first financial goal was to make enough to cover my expenses each month. Not just my business expenses, but all of my bills.
Then, I had a number in mind that I wanted to reach that would allow me to save, invest and spend a bit of money on luxuries. That was my financial stretch goal, and I would encourage you to have one as well.
Your lifestyle goals
We’ve all heard different ideas about what the freelance lifestyle is. Use this section to define it for yourself. What do you want your day-to-day life to look like? How many hours do you want to work a day? When do you want to start work?
Bonus: What happens when you reach your goals?
This section is optional, but it’s good to project out and think about what you’ll do when you reach the goals and milestones in your freelance business plan. This document is not meant to reflect the way you approach your business forever. It’s a starting point, and it should evolve with you. Keep an eye on your plan as you make progress as a freelancer, and it will help you determine the right time to take these steps.
Raising your rates
Once you reach the goals that you lay out in your original business plan, it’s almost certainly time to raise your rates if you haven’t done so already.
Check out this post to learn more about how to increase your rates and get a free price increase letter template.
You may also want to consider adding people to your team to help you with tasks that you don’t need or want to do. You can hire help to free up your time to focus on more revenue-generating activities.
New business model
This is the time to think about it you are still happy with the business you’ve created. Will you continue offering the same services once you reach your goal? Or do you see yourself wanting to get creative and expand into other areas? Don’t get ahead of yourself here, but think about whether or not you are the type of person who will want that change.
Ready to create your plan? Grab this freelance business plan template
Putting this document together takes time, but this is an investment that will pay off for you in the long run. If you get stuck on a section, don’t stress. Use these insightful questions as a guide and create the roadmap that will get you closer to where you want to be. You can always add to or edit the plan.
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