As a freelancer, should I write a business plan?

Well that depends. Is the alternative just to print a bunch of business cards, leverage social media and your network for some leads, and hope for the best? That certainly is what a lot of freelancers do, which is why so many fail.

So let’s start with a few questions:

  1. Who is your target customer/client in specific terms? Large businesses or small? Which person in the department? What should the average deal size be? How will you find and reach that person in each firm to make your pitch and sell your services? Do you already have your first three clients? Do you know of at least 10 other real prospects?
  2. Which geographic area will you serve? The local community? The surrounding counties? Multi-state? International?
  3. What will you charge for your services? What assumptions is that estimate based on? What are your costs per client? Do you need liabilities insurance? Do you need to charge sales tax? Are you doing all the sales and billing yourself? How many hours will you spend?
  4. What equipment do you need starting out? In 6 months? In a year? Do you already have it? Will you need to purchase any? Buying or leasing?
  5. How will you market to your clients? How much will you spend on marketing? What is your estimated cost of acquisition per customer?
  6. How long is your typical engagement? Are you working one client at a time, or several at once? Working from home, or do you need an office? Will you hire others? Will the client cover travel expenses?
  7. How will you legally form your business? Sole proprietorship, LLC, LLP, C-corp, S-Corp? If incorporating, how many shares are you issuing? Are all the shares just for you, or do you have other shareholders/investors?
  8. How will your business grow? What are your expected revenues and costs over the first 3–6 months, the first year, and the first 3 years. Will you be a one person shop just freelancing your services, or hiring others as subcontractors?

I could go on, but I hope you get the picture. Even for a solo freelancer, you need to think things through. You don’t need a 100 page business plan, but you will need to plan and write out exactly what your business will look like to better prepare you to succeed. Think of it like your writing a story, telling someone else what your business will look like in 3 years and how it got there. Keep it high level, don’t over do the detail. Also, keep in mind that most people overestimate revenues and underestimate expenses which is why they go under.

Here’s a good place to get started with a framework: Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers (9780470876411): Alexander Osterwalder, Yves Pigneur: Books

There are plenty more resources online for business plans and questions you should be asking. Fortune favors the prepared.

Hope this was helpful. Good Luck!

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