Why Freelancers Really DO Need a Business Plan After All

I recently came across this post here on Freelance Folder. I must say I have to disagree with the idea that freelancers don’t need a business plan.

My disagreement isn’t malicious nor do I have the intent to offend.

But the fact is that I wholeheartedly believe that freelancers DO need a business plan.

In this post I’ll explain why. I’ll describe some of the advantages of having a business plan and then give you a chance to share your experiences.

Business Plans Provide Structure

As a freelancer, you’re on your own. The decision to take that first leap out on your own can be empowering and exciting, but it can also be scary and confusing–especially when you are faced with an unexpected twist or turn. So why wouldn’t you sit down and plan ahead? You need to take into account all variables and get down on paper what your research has uncovered in order to organize your thoughts.

Putting together a business plan encourages you to think everything through and make sure this is exactly what you want to do. It gives you a structure to work with, and a recipe for success! Structure helps you every step of the way, since you have a solid, thought-out plan to base your decisions on.

Planning ahead is likely to promote discussion with people you trust, which could iron out any kinks before you commit. Also, group discussions provide great forums for creativity and help new ideas to blossom, but at the end of the day make sure that you do what YOU feel is best. After all, it’s going to be YOUR life for the foreseeable future.

Speaking of the foreseeable future…

Business Plans Help You Deal with the Unexpected

You need a business plan to consider all areas of freelancing. Perhaps you will find an area you do not have expertise in such as finance or marketing. Do you need to use other professionals to help you plug these gaps? Do you need to delay the launch date in order to learn or schedule extra time to carry out these tasks?

A business plan answers all of these questions so you don’t miss any important financial dates or do yourself a disservice through bad marketing.

During the process of putting together your plan you may change direction completely, saving you time and money. You could even establish that there isn’t a market for what you are selling, hence causing a change in direction.

On the other hand, you could find that there is another market for your business that you hadn’t realized from your market research. You may find that following this new path and setting up on your own is going to cost you more that you expected. Having this information up front is a huge help to your finances and can present new business opportunities!

Change Is Scary

Over time, your business will change so bear in mind that a business plan is not set in stone. It is, however, very easy to edit if it’s on your computer! This is a point included in the original post that I do agree with, though I still believe it is worth having this changeable plan in the first place.

Re-visit your plan on a regular basis to see where you are and how closely you kept to it. Plan a quarterly or bi-annual date to sit down with your plan and see what changes need to be made. Keep your cash flow forecast up to date and have an actual cash flow running alongside it, so you can see where you are.

Also, keep your marketing plan up to date, especially considering how much the internet is changing everything. Within a month a new social media outlet may have sprung up and taken your customers to a new forum in which to spend their spare time–providing new marketing and advertising opportunities.

Plan for Future Success

The other post mentions that you should set achievable goals then plan small steps to achieve these goals. Now if that isn’t a business plan I don’t know what is. If you plan your goals and exceed them, you’ll get a great boost. And if you find you haven’t reached them then you can look back at your plan and find out why. Think back to your school days. It’s like a record of achievement and a progress report all in one!

Speaking of goals and the future–what happens on the day that you find yourself in a thriving freelance business and you want more? You want to take a leap and become a Limited Company, employ people and expand. You will most likely need some sort of funding grant, investment or business loan. At this point, you need your business plan to prove to the bank/investor/funding body that you are legitimate and have the means to give them returns and repayments. If you build this empire and one day want to sell your business buyers will want to see a business plan to prove that it is a viable investment and is profitable.

Put on a Business Head

All the way through this post, I have been using the term ‘business.’ You may be wondering why, seeing as though you’re just an individual freelancer you’re not really running a business, right?

Wrong. You need to think of yourself as a business. A business head will help you keep the business life and the personal life separate. You need to plan your working hours and schedule. You may have decided to become a freelancer so you could spend more time at home with your children, so schedule in time for them and let your clients know what your ‘business hours’ are just like any other business would.

You need to have business accounts and work out what is included in expenses. You may have set up a savings plan for yourself, but are you going to pay yourself a wage and have an account for any profits? When you buy a new laptop, phone or car you need to know if they are going to be for business use in order to insure them correctly.

The long and short of it is, run your freelancing business like you’d run a company, based on a business plan and heading for success. Most importantly work hard, but enjoy yourself. Be confident and make small steps to work towards the exciting goals mapped out in your plan, but be realistic and positive when things don’t match up to what you planned. That’s just business!

Your Turn

Have you benefited from using a business plan?

Share your experiences in the comments.