2019 Freelance Business Plan | Part 3
Welcome back! Knock this out and you’ll finally have the tools and levers you need to push your freelance career forward. Let’s jump right into metrics. If you’re new, please reference “2019 Freelance Business Plan | Part 1” to get caught up on this exercise.
7| Key Metrics
How are you going to track your progress against your goals? Assuming you have goals or at least an understanding of the lifestyle you want, then you should have a pretty good handle on this box. For simplicity, I like to track if I’m solving the problem I set out to solve and my revenue goals. Examples are shown below.
I like to track goals that are at a maximum one year out; 3-month goals are the sweet spot for me. Now that you have your revenue goals laid out, you can back into what it will take to reach your goal.
For instance, with a $200,000 revenue goal, you will need to provide 80 content strategy overhauls or roughly 4,500 work hours this year. If you convert 1 in every 100 landing page visitors into a paying customer (overhaul service), then you will need to drive 8,000 web visitors to hit your goal. These are all back of the napkin calculations, but you get the point. It’s easier to get to a place once you’ve seen the path.
Other metrics can be referral goals, satisfaction goals, retention goals, LTV/CAC goals, etc…
This business model component forces you to do two things: create a measurement system to gauge where you stand now and check where you stand against your goals on a monthly basis. Self-monitoring is a powerful tool.
8| Cost Structure
This is another one of those components that should be pretty straightforward for a freelancer. Sum up the cost of doing business along with your living expenses and record your monthly burn rate like seen below. Then calculate your breakeven point to understand how much work you need in order to survive. If you don’t have your expenses on-hand, do a rough estimate and correct them later.
Now you have levers to play with. If you have a specific lifestyle in mind; for instance, work hours to income ratio, then you can play with your hourly rates, services, and burn rates in order to understand how to achieve that lifestyle. This is a cost-based approach to pricing for the sake of giving you clarity on where you stand. Later, once you know your customer and existing alternatives inside and out, you can take a value-based approach by testing your price points against your value-add.
Don’t be afraid to increase your price; please experiment with it. You want to find a place where there is a little friction when you tell your customer the rate but not a flat out no. I’ve found that the sweet spot for pricing is when half of your customers agree on a price and the other half don’t. Try it out, you might be surprised when you find that customers paying you more, give you fewer headaches.
9| Unfair Advantage
Oh boy, this one is going to be tough; especially as a freelancer. The competition is fierce. What do you provide that no one else can provide now or in the future? Being smart, funny, and experienced isn’t an unfair advantage. Nor is being a hard worker for less money. Chances are high that your service can be easily copied at any point. I’m not going to pretend that I have all the answers for this one, but here is an example of a few that can differentiate you from your competition.
Building a community is hard work but it’s extremely hard to copy the exact community of people who empower and support each other. Start a Facebook or Slack Group and help your customers connect with each other in order to reach their goals.
Building a network of influencers won’t be easy, but it’s something you can keep in the back of your mind as a differentiator for your career. This is a huge value add to your service if you’re in the marketing business.
Exclusive partnerships that compliment your service or product can’t be replicated because…they’re exclusive. Think about it, and maybe you can think of a company willing to work with you only to serve a specific niche.
As I said before, this element is the hardest to nail down, so it’s ok if you have nothing in this box for now. Just know that when you nail this, you’ve got a much higher chance of earning consistently with the lifestyle you want.
A Business Model Story
Here’s the theoretical story I’ve just built… So, I’m helping upcoming female musicians take their career to the next level. We’ve found that people without a marketing background struggle with content strategy, ad copy, and social media management. Even when they use the Hootsuites and Udemys of the world. To solve this problem I provide a one-week content strategy overhaul for $2,500, my ad copy services, and a course on how to use Hootsuite efficiently for $45/hour.
I’m pretty much a one-person marketing team for female musicians. In the beginning, I’ll be reaching them through influencers I know and the Facebook Groups I’m currently involved with. I’ll differentiate my self by providing them with personal connections to female influencers that I’ve connected with over the years. All in all, my goal is to help 80 women take their career to new heights by the end of the year.
Now it’s your turn; go ahead and write out your story.
Moving Forward
If one were to stay true to lean practices, then you would go out and test the different business model elements. You would find out which problem was the biggest, which solutions solved that problem, which channels worked best, and which UVP drove conversions on your site. However, I’m going to keep it short for once.
- Go out and understand everything about your customer.
- Relentlessly solve their specific problems and pain points.
At Lance, we’re dedicated to giving freelancers consistent income with the lifestyle they dream of. We hope to achieve this through our software, our knowledge, and our community.
Please sign-up free for early access before we launch so we can ensure we’re making a product that matters. At the very least, come to us for your freelance questions and we’ll give you a hand :)
Cheers and happy freelancing.
-Freelancers at zaaas.io
