Become Freelance

There are many ways for you to develop an awesome business plan. You can use resources to create them, such as: templates from websites; guidelines in workbooks; computer software that will pretty much do it for you; or you can borrow ideas from real business plans and take the best things you like about each for a blend of uniqueness. Your business plan is YOUR plan of action as a Freelancer.

“Our goals can only be reached through a vehicle of a plan, in which we must fervently believe, and upon which we must vigorously act. There is no other route to success.”
Stephen A. Brennan

You also will be happy to know that there is no set number of pages that your business plan must be in order to meet industry standards. I have heard of people writing a business plan on the back of a napkin before, but I would hesitate to validate such Neanderthal ways of doing business. If you will ever need your business plan to assist you in getting capital from a lender or investor, then it may be obvious to say that a napkin would be highly unacceptable. To make it easier, we will give you a sample guideline of what you might gather and include in your customized business plan.

7 ELEMENTS OF A SUCCESSFUL FREELANCER’S BUSINESS PLAN

1. INTRODUCTION

This is the part that will make it look professional. Whether you are using your business plan to show prospective investors, lenders or simply as a valuable reference tool to help you grow your business, the first section will create an image of professionalism. Here is what you should include:

Cover Page – Include the name of your company and any pertinent Corporation or LLC, along with your address and all contact information.

Executive Summary – Sounds very corporate, doesn’t it? It can be, if your company will have employees. As a Freelancer it establishes the – Who? What? When? Where? Why? and How? of your business. You could preface this section with a paragraph summarizing your goals of freedom, independence and career growth working for yourself. If you have one, mention your niche in the market. Then, create a page with the following setup:

• Who We Are: Even if there is no “we” in “you”; you want to use this paragraph as a basic introduction. Write it as if someone else is reading about you. As an example, pretend you are going to be a Freelance photographer. Start with – “So-and-so (you) is establishing a professional photography business called __________ (Name of business) and is serving as sole proprietor and CEO of said business. Then include a couple of paragraphs about your background or experience in this industry.
• What We Are: Define your purpose. If it is to specialize in one particular segment or to incorporate a wide array of services, make a list of what you will offer your clients.
• When: Put that date that you will begin your business or the date that it will be officially licensed, incorporated, etc. Put any foreseeable milestones.
• Where: If you work at home, include your home office and setup. You could state that for one year, two years or forever you plan on working at home with a real home office setup and then as the business grows you will be buying or renting an office (or not, depending on your needs).
• Why: Well, why are you starting this Freelance endeavor? Is it because you are tired of your job, wanting more freedom or because you don’t want a cap on the amount of money you can make? Or maybe because you have a hot new concept that no one else is doing and you see an opening for opportunity? Think about this one and write out the reason in your own words.
• How: How will you perform this service or sell these products? What tools will you need? What is your strategy?

Table of Contents - You will put all of the elements of your business plan in a nicely-formatted method of organization. The Table of Contents will help readers navigate through your document.

TIP: WRITE THE FIRST SECTION OF YOUR BUSINESS PLAN LAST.
The Cover Page, Executive Summary and Table of Contents will appear in the beginning of your business plan, but you will actually write this part last, after the following remaining sections have been prepared.

2. BUSINESS OVERVIEW

Discuss the concept of your business. Tell readers what your company actually does. If you are a sole proprietor (as most Freelancers are), then you will specifically want to address what particular service or niche you will provide. It is similar to a portion of the Executive Summary. Make sure you do not use a cookie-cutter response. The Overview is your vision in your words. If you have a concise vision of where your business is going, then it will lead your company’s ability to prosper. Make your business description very clear, definite and thorough. Writing it down will enable your vision of growth to become possible one day, as opposed to merely hoping that those milestones will naturally come. Here are a few things you could include:

Business Concept – What you will offer, the advantages and benefits of your services and how they can be used in a career today.

Objectives - Make two columns – one for personal and one for your business if you are a solo Freelancer. Put your goals in bullet-style or numbered format. As an example, you could make it an objective for your business to:

• To make at least $10,000 with my business moonlighting within four months before resigning from my current full-time job.
• To increase my first four months income by 40% my first year of business.
• To outsource overload of work to part-time employees by the second year of business, which will increase my income by an additional 20%.

… and so on. You are to define your own milestones. This will help you to visualize those goals really coming to fruition and will also build a sense of focus to reach those goals within your personal deadlines.

Industry Description – What is your place within your industry? Give a description here of the sector with which you intend to specialize in. The publishing industry, the wedding industry, the ecommerce industry, or the athletic industries are all examples. Identify key players and at least a paragraph of research you have done to explore the potential sales within your field.

Position - How will you position your Freelance business within your particular industry? Incorporate your concept, objectives and industry overview to see where you will fall among competitors. How will you rise to the top?

Fee Structure – You will learn more about how to set your fees in a future section. Include research of similar products or service providers and how you will justify your rates. Also identify how you will bill – hourly, by project, with a set weekly retainer, by piece? Or other? Include any policies you will have with regards to payment, collections, up-front requirements and how you will be able to take money from your clients. Have a plan in place on how much you will charge.

TIP: THE BUSINESS OVERVIEW WILL FORCE YOU TO THINK ABOUT YOUR PERSONAL GOALS AND OBJECTIVES AS A FREELANCER.
Refer to this section frequently throughout the year, particularly when you feel like you are losing focus or getting off track.

3. MARKET ANALYSIS

You have identified a need and are pursuing that need. This section will be viewed by prospective investors and will also help you to realize who your clients are, the demographics and location of those clients, and why you will be able to fulfill those needs with your services. This section is like a sales estimate and will include the majority of your predetermined research. Here is how it is to be broken down:

Client Base – Answer these questions in this section:

• Who are my clients?
• Where will the majority of them come from – locally, regionally, or world-wide?
• Typical demographics for your customer base?
• What are some buying trends of your customers?

Market Trends – Some questions to answer include:

• How does the economy affect my customer base?
• Are there proven rises and declines within my industry and how will you, as a Freelancer, overcome the lows?
• What is the need you have identified within your market?
• Are there any wide-open areas that have not been reached by any of your competition?
• Include any charts, graphs or pertinent information you have gathered to back your research.

Competitive Analysis – This section is very straightforward. Unless you have a product or service that is entirely unique, then surely you have run across either another Freelancer who does what you want to do, or another retailer offering a similar product. You can learn a lot by studying your competition. You can see what they do to succeed and study those tactics for which they have become successful. Then you can do it better. You will have your own style and strategy to create leverage for your own Freelance endeavor. In what areas are your competitors most vulnerable?

• What similarities does your competition have in their service or product, and how does yours differ?
• Will you value your skills to be higher priced than theirs, or will you try to undercut them with lower prices?
• Is what you have worth more than your competition?
• What noticeable deficiencies does your competition have that will enable you to become bigger and better than they are?
• How will you face new competitors who in the future will try to copycat you?

Maybe competition is of little concern to you at this time, if there is enough work to go around for everyone. Freelance writers for example, are in high demand. So are web designers, video editors, virtual assistants and search engine experts. If you choose a career that the demand is higher than the number of able Freelancers, then you will have no problem getting started.

That is… if you are good! You will need to be strong in marketing, sales and bidding in order to set yourself apart, especially in the beginning of your solo venture. You will learn these skills in a forthcoming chapter.

4. SALES & MARKETING STRATEGY

You will provide a detailed plan of action that will serve as an explanation of how you will attract new clients and buying customers. Many new business owners fail at marketing and sales because they do not know what they’re doing. They have misconstrued concepts. I see many, many Freelancers who sell themselves way too short. There are a number of important things to know about marketing and selling yourself as a Freelancer. You will learn a lot of valuable advice coming up later in this book, but for the sake of your business plan, please do take the time to think about your strategy. Here are some topics to address within your business plan:

• Proposed advertising and promotional budget.
• Where you will focus most of your advertising?
• Mention any ideas for website(s), or selling products in addition to a service.
• Mention forthcoming ways to build additional revenue and residual income.
• Write down ideas for keeping and maintaining current clients. How will you stay in touch with those clients and guarantee more referrals?
• Networking ideas you have, like Chamber mixers, breakfast leads groups or teaming up with advertising agencies.
• Include PR (public relations) suggestions, like press releases, speaking engagements and other free sources to attract business.
• Affiliations you will join that will be directly associated with your industry.
• Consider how you will collect money. Via PayPal, credit cards, checks or other means of payment.
• Some Freelancers also like to include how much percentage of TIME and MONEY they will spend on marketing.

TIP: DON’T JUST HOPE THAT BUSINESS WILL FALL INTO YOUR LAP.
Plan a unique strategy for marketing and selling yourself and your services. This section of your business plan will guide you and will ensure that your marketing efforts are not fruitless. Leave it flexible for changes once you realize what works and what doesn’t.

An example of this is the money you might spend on a newspaper ad, only to realize that you only got one phone call from a prospective customer. Rather than including that newspaper in the advertising budget for next year, you can move that money to a different avenue that will yield greater results. Leave at least a few hundred extra dollars in “unforeseeable advertising”. That way, if a great opportunity presents itself to you sometime during the fiscal year, then you will have an ability to act on it, rather than going over your predetermined budget.

5. OPERATIONAL PLAN

There are two chunks of text in your business plan that fall within this section. What it talks about in this section is the way you will conduct your business. Since you are likely starting as a sole proprietor, or maybe have one partner, you will have less to talk about than a company who has a retail location with employees. The Operational Plan will be more complicated for a larger company. One day you may become a large company, so you need to think about that possibility as you write this information of projected goals. Remember, this is about your vision of growth as a Freelancer. You can be as big or as small as you want. If you dream big, then write it out!

PART I of Operational Plan = Management Plan – Simply put, this is the legal structure of your business. A weak management plan can break the infrastructure of your business. You need to demonstrate strong management ability in order not to get knocked down. Why? One customer can ruin your business if you do not properly handle things. That one customer can call the BBB, write complaints, slander or poor feedback about you and it will quickly spread among all of your other clients. On the other hand, happy clients lead to more and more work, which fuels your business to grow at a rapid pace.

• Will you have a management team or will you be the sole decision maker?
• Who else, besides you, will be allowed to see discreet financial and confidential information about your business? What are their credentials?
• How will you handle unhappy customers if you have one?
• What will your policies be regarding payment of employees or independent contractors, if you have any?
• Who are your advisors and legal council?
• Mention any additional support in your management team. If you are a home-business owner who is self-employed, you could even use this section to include your spouse, accountant or lawyer as an authorized advisor.

Include all of the people who will be involved in your business. If it is JUST YOU, your statement might look something like this: I, ___________ (your name) will be the sole owner and operator of _____________ (name of your business) entirely independently and without any employees or external resources. At this time, I have no intention of ever hiring any employees, except an occasional independent contractor, if need be.

PART II of Operational Plan = Organizational Plan – The second half of the Operational Plan is to include your Freelance businesses’ physical attributes. Here are some of those things you must include:

• Physical location of your business. Indicate if there is a rent payment.
• Tools and equipment you need to function and operate your business.
• If you require inventory and through which vendors or suppliers you will use.
• Resources needed to develop your product, if any. Is your product tangible or intangible? Let’s say you are going to become a Freelance independent distributor for Amazon, and you will sell books. What will you need to order, buy and have on hand to make sales? You might need boxes, shipping materials and of course a connection with a publisher. Include all of this in your plan. If your product is intangible, such as a writer’s thoughts on a page, then list any resources you might need, like plenty of reams of paper! Think about every little detail so that you don’t get stuck in a state of unpreparedness.

If you are using a business plan to seek potential investors or bank lending, then your plan must be more-inclusive. You will need to add a few paragraphs that talk about projected capital requirements that will be necessary in order to get the business up and going. That information could also be placed in the next section about finances.

TIP: THINK ABOUT ALL EXPENSES, EQUIPMENT AND TOOLS YOU WILL NEED TO BEGIN YOU’RE BUSINESS.
Write down every small and great detail, from a particular software program you need to buy; to a larger item like a delivery van. Allow room for the unexpected.

6. FINANCIAL PROJECTIONS

Now we’re really getting down to the nitty-gritty of your custom designed business plan. One of the toughest sections to produce will be your financial statements. How are you supposed to know how much you will make yet, when you haven’t even begun? Well… that is indeed a toughie.

Let’s make this easier for you. It is a necessary evil. You may need this plan to convince a lender why they should give you the money you need to start this business. “SHOW ME THE MONEY!” You’re going to hear more about money and cash flow in awhile, but right now you need to set some goals as part of this great business plan you have developed.

If you have been moonlighting for some time and doing your Freelance venture as a sideline to another full-time job, you may have a slight advantage because you may have already seen a growth pattern in your business. Chances are, you started with very little except your desire to earn some extra cash on the side – only now you realize that you have a real viable career in front of you so it’s time to take action on that impulse. Study the growth of your Freelancing from this past year. Evaluate how much more you will be able to make if you go solo and quit your job to make this venture a full-time career for you.

However, if your new gig is brand-spanking new and you want to develop a new concept, invention or service that has never been done, it will be more difficult to complete the financial projections without knowing how the customers will react. Will they buy, or not? You might think your idea is the best thing since sliced bread, but if the public doesn’t agree then you will be in a sad case of regret. In order to overcome the confusion of how much you will make, TEST IT OUT.

TIP: TEST MARKET YOUR SERVICE OR PRODUCT BEFORE STARTING YOUR BUSINESS, IF AT ALL POSSIBLE. THIS WILL ENABLE YOU TO GAIN VALUABLE FINANCIAL PROJECTIONS.
If your service or product must be created first, then test it by producing surveys, Adwords campaigns or by offering samples to real people.

PROVEN DATA IS NEEDED TO PROJECT BUSINESS FEASIBILITY WITHIN YOUR MARKET.
Study trends to find much-needed stats. If customers don’t want what you’re selling, then you either need to tweak it or redevelop the idea to avoid future disappointments.

Things to include in the financial section of your business plan:

• Cash flow statement.
• Accounting pages such as: balance sheets; profit and loss reports; income statement; and past year’s records
• Risks – include hypothetical growths and declines of your business.
• Start-up costs and funding requirements, if any.
• Sales projections using suggested pricing strategy.
• Development or production costs with suggestions for future savings.

7. CREDIBILE EVIDENCE

Here’s some advice you will ONLY find on BecomeFreelance.com! You will be glad you read this post, because you will see how valuable credible evidence can be. This section will set your business plan apart from all of the rest. Credible evidence is PROOF that you know what you’re talking about and what makes you qualified to run your own business. You can position these elements within your plan as Exhibits or Appendixes if you wish, or you can create a final section that will serve as both a summary and an all-important reference tool for potential lenders. This will prove that you know what you’re talking about. Among the things you might include in this section are:

• Your personal resume, qualifications and work history related to the nature of this business.
• Photographs of your product, if you have one.
• A photograph of you to make it more personalized. You could also add a short bio.
• A logo, slogan and other brand development items.
• Contracts or legal agreements that are relevant to the business.
• Marketing studies with proven research (i.e. – printouts of competitor’s sales with a chart of your projected sales in comparison, noting any holes in their system which will lead to windows of opportunity for you).

TIP: SET YOUR BUSINESS PLAN APART BY PROVIDING EXTRA ELEMENTS THAT THE COOKIE-CUTTER BUSINESS PLAN WOULD NOT REQUIRE.
Make your plan unique and stick by it as closely as possible, while still allowing flexibility for changes during periods of growth or difficulty.