Freelance Freedom: Starting a Freelance Business, Succeeding at Self-Employment, and Happily Being Your Own Boss

Freelance Freedom, Edition 1.0, 2013, L.A. Mulnix, 124 pages

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Chapter Two: Your Business Idea

Usually the freelance service you offer will be something you've done as an employee, but it could be something you've done as a hobby—like furniture refinishing—or simply something you do for yourself—like housecleaning. Or you may want to consider something you could do with some training or personal study. When starting out, be open-minded about services you could offer.

Choosing Your Market

You don't want to simply offer a service and hope customers come, which is what inexperienced business people too often do. You need to think about the market, or niche, you will serve. Will you offer editing to college students or to publishers? Will you offer music instruction to adults or to schoolchildren?

By identifying and knowing your market, you can better tailor your services to what your customers want and more easily reach them to tell them about your services. With a business that is just you, trying to be everything to everyone just doesn't make sense.

How do you choose your market? It's easiest to choose one that you actually belong to or that you have had close contact with. If you are a dog owner, you may see that other dog owners in your neighborhood are busy professionals who need a dog walker. If you've worked as an editor for magazines, you may see that magazines are downsizing and are eager to outsource copyediting and proofreading. You could identify lucrative markets that you've had little or no contact with, but that takes some market research.

Identifying Opportunities

In thinking about potential markets and potential services you could offer, look for these opportunities:

Is the market growing, with new potential clients needing your service? For example, a new type of nonprofit organization—say, groups organized to raise funds to fight a disease—could offer opportunities for freelancers providing bookkeeping or fund-raising. A new type of business—such as coffee shops in the last decade or so—may need marketing help. Users of a newly popular electronic device—like the personal computer in the 1980s—may need training.

If the market isn't growing, is the need for your service growing in the market? If your service has been offered to a market for years, clients will probably already be working with freelancers they like. Winning their business will be a lot more difficult than winning that of clients just realizing they need your service.

For example, in the 1990s companies found that they needed a Web presence, so practically anyone who could create a Web page could find work. Today that market is much more difficult to break into. Changes in technology and changes in the law often lead to new needs.

If neither the market nor the need is growing, can you compete with current providers of your service? Clients are not likely to switch to you unless you offer a clear advantage. Are you better, faster, or cheaper? Will it be obvious to potential clients that they will benefit by giving up a known vendor and going to you, someone relatively unknown?

Perhaps employees are currently doing the work you offer, and you can make the case that outsourcing to a freelancer will save the company money and allow greater flexibility.

Other Factors

Be sure to consider these things too:

Is the market easy to reach with inexpensive marketing? Do potential clients read particular publications? Do they regularly visit certain Web sites? Are they on mailing lists you can obtain cheaply? If your only option is advertising in the mainstream media, the return may not be worth the cost.

Are members of the market likely to talk to each other about your service? The cheapest and best marketing is word of mouth, but if your market consists of competitors, they are not likely to spread the word on how good you are.

Will the market provide you with repeat work? Having to constantly find new clients is difficult and expensive. If you can market through word of mouth and if the clients you find keep coming back, you can lower marketing costs and your effort to near zero.

Do members of the market buy solely based on cost? If your clients don't consider quality, they will always find someone willing to work for less than you. Individuals can often be penny-pinchers, whereas companies and organizations have less of a problem paying professional fees for quality work.

If you don't live in the same place as the market, can you serve it remotely? The Internet has certainly increased the possibilities for working remotely, allowing instant communication, virtual teams, and cheaper marketing.

Are members of the market likely to be good payers? It will do you no good to do work and get paid slowly or never get paid at all.

Market Research

Once you have identified a potential service and a market, do some research. Talk to representatives of the market, investigate the competition, and talk to freelancers not in competition with you. Do the best you can to understand your market and develop confidence that you can successfully sell your service to it and make a satisfactory living.

When you speak to members of the market, it's best not to say something like, “I'm thinking of offering accounting services to doctors in private practice. Do you think there is a need for that?” The doctor you talk to may say yes just to be encouraging.

You'll get more meaningful responses by asking the doctor about his office's business services needs and then probing for details. You may learn that more than a general accountant, his office needs someone to handle insurance paperwork—which you perhaps could do.

In fact, providing a fairly narrow service to a specific market is usually best. You can't be everything to everyone. You can excel at only a limited number of tasks. You have limited time and money to spend on marketing, so you'll only be able to reach a relatively small and well-defined niche. And being a specialist in the right service will make you more competitive and win you higher rates.

Here are other things you should ask about when speaking to members of the market:

You'll also need to have some sense of the competition you'll face. This can be determined through Web searches of competitors' pages, reviews of the Yellow Pages, checking with professional organizations, and conversations with potential clients. This research will tell you a lot about who the competition is, what services they offer, how they market themselves, and perhaps how they charge. Most likely the competition won't be willing to offer you advice, but you could pose as a potential client and call them to pick up useful information.

You can also contact freelancers who won't be competing with you because they serve either another region or another market. People like being asked for advice, and if you are no threat to them, they'll be quite willing to help you. Some may even be willing to serve as a mentor to you as you develop your business idea and start building your freelance business. Others will only want to chat with you a bit. Either way, if you are prepared with the right questions, you'll learn a lot.

Refining Your Business Idea

After you do this research, ask yourself these questions:

Still, after doing all this research and putting much thought into your business idea and your niche, you will probably need to experiment. It's very likely that your first approach will not quite work, and you'll need to modify it and try something else. You may end up providing a somewhat different service or finding a much more lucrative niche.

Through all this trial and error, keep in touch with your contacts in the market and the freelancers who offered advice earlier. They can offer support and encouragement as you go through the process. Be prepared to evolve: It may take a while to understand your business and make it work for you.

Your Business Plan

Should you write up a business plan? Probably not a complete or formal one. Formal business plans are principally used to obtain capital from a bank or from investors, and you probably won't need to do that.

Still, the exercise of writing a business plan, even a relatively informal one, can help you think through how you will build and develop your business and then help keep you on track. So, certainly don't ask someone else to write the business plan for you. You need to do it yourself and, in the process, think through the basics of your business:

As your business evolves, your business plan should too. Go back to it periodically and revisit earlier decisions. You may want to keep different versions of the plan over time so that you can look back and see how your thinking has grown.

Your first stab at a business plan may be pretty sketchy, but over time you'll see things more clearly and flesh things out. The business plan is a road map, but you'll want to change direction at times.


 

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