Why Developing a Business Strategy is so Important for New Freelancers

Many freelancers fail within their first year of business. In most cases, this is because they haven’t developed a freelance business strategy. Without a coherent plan of action, it’s all too easy to be distracted by shiny objects or to fall into a rut. 

Freelancing is such an attractive proposition. You work for yourself and in many sectors, you can work in any location as long as it has an internet connection. It’s an ideal career path for people who love to travel, to work from home, to stay close to their kids, and who simply hate office environments. 

Yet for its attractions and benefits, freelancing is difficult and requires careful planning. As a solopreneur, you’re in charge of everything to do with your business, including marketing, development, admin, and time management, and that’s even before you get to client work. 

The importance of a business strategy

Without a business strategy, chaos can quickly ensue. The result is a freelancing career you quickly grow to dislike and a cash flow cycle that increases stress, frustration, and money worries. 

Developing a business strategy is vital – just like it is for the big businesses – and it’s never too late to create one. Whether you’re a new graduate fresh out of collage or an established freelancer of many years, working on a business strategy will help you gain clarity and perspective, as well as push you on towards your ideal goals. 

Creating a coherent strategy will also help you decide whether your current freelancing plans are really what you want to do. Sometimes, putting thoughts and strategies on paper, can reveal hidden emotional pushbacks which need to be addressed. It’s important to listen to both your logical mind and your gut feelings. 

While you can set up a freelance business in just 24 hours, oftentimes it’s sensible to plan ahead weeks in advance.

Developing a business strategy

So what are some of the things to consider when developing a strategy to achieve your vision? 

Here are just six things to consider:

  1. Long-term financial goals

What do you want to earn? Do you want to hit 6-figures? Or will a smaller amount be acceptable as long as you’re doing something you love? Earning a lot of money can be very satisfying but not at the expense of your wellbeing. 

Your long-term financial goals will heavily influence your business strategy. 

It’s likely the higher your income goal, the more advanced strategies you’ll need to implement. This may require some upfront investment in training and software, depending on your existing skillsets and knowledge. 

Deciding what your income target is very early on will help you to develop strategies that best match with your goals. 

  1. Where to place your focus

As we’ve already covered in previous articles, specialists usually earn more than generalists, in pretty much any industry. Part of developing a business plan will involve a decision over whether to narrow your focus when it comes to working with clients. 

Specializing allows you to really master a certain skill, technique, or subject matter area. This makes you extremely attractive to potential clients needing someone with these specific skills or specialist knowledge. 

Factoring in where to place your freelance business focus is essential when creating your business plan. 

  1. Competition analysis

Conducting a competition analysis is an important step when first starting out as a freelancer or pivoting to a new specialism. It’s vital to know how many competitors you have in a particular space and how established they are. 

This information will help you create marketing and business strategies to help you compete in what might be a crowded marketplace. If you’re a new freelancer, there may be easier target markets to crack than your initial target intentions. 

Studying the competition will help you to decide the best course of action to take as well as potential requirements for the future, including the need for delegation, collaboration, and even expansion. 

  1. Required resources

Another big part of developing a freelance business strategy is figuring out the tools and equipment you’ll need to do the best job possible for your clients. And not just for your clients, but for the benefit of your own finances and success. 

Shoddy tools lead to shoddy work, which is why it’s wise to select the best apps and software to help you meet your goals. 

Invoicing software, such as our free cloud invoicing platform here at Invoice Ninja, helps you send beautiful invoices to your clients and accurately receive payments. Time tracking tools and project management software can dramatically speed up your processes and workflow, meaning you earn more money for less hours put in. 

Nowadays, there’s a whole host of apps and tools which are integrated via the cloud and can be automatically synchronized across different platforms. 

Successful freelance business strategies are reliant on integrated technology. 

  1. Marketing and sales strategies

The days of putting up a website, adding some keywords, and then waiting for clients to come knocking are gone – long gone! As a freelancer, you need to actively market your business every day. In the early stages of your career, this can take up more time than actual billable client work. 

Planning a marketing strategy is imperative. By allocating your time and resources to market your business effectively, you can quickly reach the best clients who need your services and skills the most. 

With a combination of inbound and outbound marketing and sales strategies, you will start working with your ideal clients and charging fair fees for your efforts. 

Innovation can be key when it comes to marketing your business. 

  1. Contingencies

Things go wrong in life, often suddenly and out of the blue. Whether it’s illness, bereavement, moving home, or financial loss, it’s vital to plan ahead as a freelancer. Including contingencies into your business strategy allows you some leeway when it comes to unexpected events. 

Many freelancers put a set amount of their monthly earnings into a separate savings account which can be accessed in an emergency (for example, if you can’t work for 3-6 months). Things like this need to be incorporated into your business strategy going forwards.

The benefits of developing a freelance business strategy

Developing a business strategy is an important way to gain some control over your freelancing destiny. Without plans and strategies, a freelance career can resemble a squiggly line, going around in circles and repeating past mistakes. 

The most important aspect of a business plan is to figure out what you want from your freelancing. Sometimes your ideal scenario might not match with what your market wants, needs, or does. You have to adapt and pivot to go where success will be found. 

It’s often in the creation of a business strategy that you come to realizations about what you really want and need to do.

For this reason alone, it’s essential.