Why You Need a Business Plan

Virtually all of the biggest questions freelancers tend to have, including the biggest of them all – should I even bother freelancing – will be answered by a thoughtfully prepared business plan. So why do so few freelancers have a business plan?

In my conversations with freelancers over the years, I have found that it often stems from a fundamental misunderstanding of what it actually means to freelance. They tend to view freelancing similarly to job hunting, where we sift through listings of gigs and apply to as many as possible in hopes that we will land one or two of them. And in so doing, the freelancer’s career is little more than a series of odd jobs that we luck into over and over again. This unsurprisingly leads to a self-fulfilling prophecy where the freelancer is stuck on a miserable treadmill of uncertainty, stress and feast/famine cycles that often lead to failure.

By contrast, successful freelancers tend to view things from the perspective of a traditional small business owner. They engage in self-reflection to determine the strengths and weaknesses of their unique skill set and personality, they zero in on a niche market that might benefit from those skills, they package their skills into a product offering that is laser-focused on the specific needs of that niche market, and they relentlessly market these products to their chosen niche market. They do not deviate from or abandon this market thesis until it has proven itself to be unworkable, and only then do they explore a new niche/product combination. The result is often a schedule full of rewarding work for a small handful of valued clients, their days filled with billable hours instead of hunting for new gigs. They plan for success, and they succeed because of the plan.

Needless to say, we all want to be in this second group. But how do we get there? The answer is simple – a well developed business plan will help us clarify our strengths and weaknesses, turns those strengths into viable products, and identify a market that wants and needs our products. The plan provides a roadmap for success.

So what’s in a business plan? It depends on the goal. Some are built around seeking financing, exploring product viability or expanding existing businesses. Because of this, the full-featured business plan templates floating around the internet can be confusing, irrelevant or full of unnecessary detail. As freelancers, we just need our business plan to fulfill four primary goals:

• Identify our unique strengths, weaknesses, interests and abilities
• Identify a niche market that would benefit from those unique traits
• Package our traits into products that are laser-focused on solving the specific needs of our niche market
• Determine how best to market our products to our niche market

This is why we’ve created the Freelancer’s Business Plan Toolkit, which includes detailed instructions and helpers to make it incredibly simple and intuitive to set up your own business plan. Let me know how it works for you.