Freelancing can be a tough business—which is why it’s important to create a simple freelancing business plan to keep you on track and moving forward.
Like a regular business, there are a few dos and don’ts to keep in mind; some of these freelancing business plan tips can make your business venture a smoother transition, and some will just make your freelance life easier in the long run.
Our top tips for a successful freelancing business plan
The following list are seventeen things to avoid as you build a freelancing business plan, which will make for a much more effective business endeavor.
PS: You can also download our free one page business plan template to take action quickly in your freelance business.
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1. Do not set up a corporation
When planning your freelancing business, it will not do you any good to incorporate.
The only thing it will realistically result in is more time spent trying to fill out extra tax forms and to maintain numerous additional records.
There are FAR more important elements to your freelancing business plan than
The majority of small businesses owners are sole proprietors, and they are completely content with their increasing bank account. Speaking of which…
2. Do not open a new checking account
Oh, the heresy – the IRS tells you that it is best to maintain a separate freelancing business account, and so does your accountant.
However, business accounts often come with excessive fees and no other benefits that you don’t already get with your personal account.
Do not believe the myths that clients will feel you are unprofessional; in fact, they just might feel even more comfortable paying you.
If you do want to include “getting a new checking account” in your freelancing business plan, be sure to get a simple account with no extra (painful) fees.
3. Do not get an expensive accountant
Don’t hire the guy that says you need a separate account. Not to mention, they give you advice that you simply do not need, and they can charge well over $100 for every wasted hour.
Taxes can be done at a nearby service for a third of that cost. If you honestly cannot handle the task of bookkeeping yourself (which you probably can), then put it in your freelancing business plan to go a little deeper in your own industry – hire a freelance bookkeeper for a quarter of the cost of an accountant.
4. Do not pay an attorney
In a similar vein as the accountant, you simply do not need to pay for an attorney’s advice all the time—especially when your plans for your freelancing are so new and fragile.
However, do attempt to maintain good relations with one in the event that you do end up needing one, though the majority of information you may need to know can be obtained by way of books or the Internet.
5. Do not get a business license
As you’re drafting your freelancing business plan, don’t worry so much about a business license at first.
This does not include the necessary permits and licenses you must acquire to legally present your business, so also make sure that you do not fall short on these requirements.
However, unless you have a business name, chances are you will not need an actual business license as a part of your freelancing business plan. This is yet another form of wasted money and time.
6. Do not buy a logo design
Even if you endeavor to start a freelancing business, you do not need to spend too much time on designing yourself a logo. Alternatively, you might wish to get cheap software to help with design in the event that you lack the necessary skill to use other programs (such as GIMP or Paint.NET), or you can simply pick a good font and use your own name for a logo. This step is often overlooked by many entrepreneurs hoping to come up with the perfect, eye-catching logo to reel folks into their business. Sometimes, it is simply not the answer.
7. Do not write a business plan
Note that this does not say “do not have a plan;” simply avoid writing a business plan. This takes much time to write and chances are great that it will chance the moment you open your doors for the first time. Essentially, it is a waste of time to do something that is not certain and will not ultimately make a difference in your endeavor. If you intend to spend your time doing something, avoid writing a business plan and learn the ways to sell yourself in its stead. After all, it is selling that you are hoping to do. You may opt to do this anyway, but know that it will constantly change.
If you truly feel like you MUST write a business plan, at least use our one page business plan template so you don’t waste tons of time drafting up a long plan you’ll never use. You can learn more about one page business plans here.
8. Know how you make money
Discover where your core competencies lie and what you do to make your money. Be able to answer clearly and concisely what you do in less than thirty seconds. Are you selling a product or a service? When you are in the thick of things, remind yourself of your core business.
9. Get your equipment
Make sure that you can perform your job as efficiently as possible. If you know that you will need an office copier, a fax machine and several pieces of software, get those items in the beginning. It will save time trying to scrounge for them when they are absolutely necessary.
10. Get an affordable accountant
Accountants know the ins and outs of corporate tax code. They can show you how your business can get along with the government. An accountant is priceless when deciding whether you wish to create a sole partnership or a LLC.
11. What’s your name?
Come up with a name that describes what you do and catches your attention. Your name shouldn’t be hard to pronounce or spell, yet it should be unique enough to obtain the domain name. Your name should not be confusing or piggyback on another’s brand.
12. Marketing and branding
You know that people don’t immediately run through the door when you declare yourself open for business. You need to create a brand for yourself, then pursue the customers that you wish to reach. Use your friends to receive honest feedback on your ideas.
13. Create a contract
Before you set pen to paper for a client, you need to have the parameters laid down in the form of a contract. The contract will spell out the services that you are willing to do and the number of hours that you are willing to work. This is one of the most important documents in business.
14. Discover your strengths
Examine yourself before you go into business. You want to look for avenues and opportunities which play to your strengths. Examine fields that you enjoy for opportunities. If you love to talk with people rather than sending email, look around for conferences and networking opportunities.
15. Determine your hourly rate
How much money do you need to make per hour to continue living in your lifestyle? Find out your average monthly expenses and then divide that by the numbers of days in a month that you plan to work. Divide that further by the number of hours that you plan to work in a day. That number is a factor in determining your rates.
16. Learn to track your time
Hours can pass while you are staring at a computer screen. Realize that all of your work is a learning process. You might believe that a job will take a couple of hours, but sometimes it can take the entire day. Track the time that you spend on your work so that you can adjust your prices and bill accordingly.
17. Run the numbers
If you are an article writer, how long does it take to write your standard article? How long does it take you to rewrite an article? Have a realistic idea of how much you can do in a day. How much do you need to make in a day? Know your capabilities to form realistic expectations.
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