How To Create A Freelance Business Plan – Guide + Template

Having a solid freelance business plan is crucial for achieving long-term success. While you may not have the same traditional structure as a brick-and-mortar business, it’s essential to have a roadmap that outlines your goals, target audience, and financial projections. In this article, we’ll discuss the key components of a business plan for freelancers and offer tips on how to create a plan that sets you up for success.

  1. Purpose of a business plan
  2. Benefits and advantages
  3. The Business Model Canvas
    1. Value Proposition
    2. Customer Segments
    3. Channels
    4. Customer Relations
    5. Key Partners
    6. Key Resources
    7. Key Activities
    8. Revenue Stream
    9. Cost Structure
    1. Executive Summary
    2. Company and Strategy
    3. Products and Services
    4. Market Analysis
    5. Competitors
    6. Marketing and Sales
    7. Organization and Resources
    8. Risk Analysis
    9. Financing
    10. Action Plan
    11. Appendix

    Purpose of a freelance business plan

    A business plan forms the foundation of your company. It records the business idea and all the important components that contribute to its success or failure. Therefore, a business plan not only helps to get an idea of what the chances of success are for a plan, but also serves to keep an eye on the development of the company after the start-up, and to make target-actual comparisons and counteract negative changes in a timely manner.

    In addition to its internal purpose, a business plan also fulfils external tasks. When starting a business, it especially serves as a basis for evaluation by external capital providers.

    A good business plan can already be helpful in the start-up phase to convince potential investors, banks, authorities, as well as potential sales partners, customers or suppliers of the business idea.

    However, before diving straight into the creation of a business plan, one should first engage with their business idea in order to illuminate it from all sides. This not only helps to avoid early failure, but also makes the creation of a freelance business plan much easier.

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    Why use a business plan? Benefits and advantages

    Before you start creating the perfect freelance business plan, let’s take a look at the benefits and advantages that it can offer:

    The Business Model Canvas

    To analyse the potential of a business idea, one can use a variety of methods. One of the most comprehensive tools for this is the Business Model Canvas by Alexander Osterwalder. In this method, a business idea is placed at the centre and related to 9 dimensions – the so-called building blocks:

    business model canvas

    During the development and analysis of the business idea, all fields are filled with the corresponding contents. Plan to spend two to three hours working on these fields. It is important to take enough time to consider the thoughts for each building block, but not to plan every field in detail. Remember, the completion of the Business Model Canvas should only show whether the business idea is feasible and serves as a guide for what needs to be considered.

    Value Proposition

    The Value Proposition defines the extent to which the business model brings benefits to the customer. The following questions help to define the promise of performance:

    Customer Segments

    Next is the definition of the target audience or customers. It is important to define customer segments that will buy your services or products. Potential customers are grouped together based on their characteristics. The group characteristics can be traditional demographic factors (age, gender, location, etc.) or can focus on purchasing behaviour or reasons for buying.

    Channels

    Next, the channels through which you want to inform your customers about the product or service are defined. It is important to find out where and how potential customers shop. Here are some questions to answer:

    To capture all relevant touchpoints between customers and your business, it is recommended to record the so-called customer journey. Here, you put yourself in your customer’s shoes and document every step he or she takes from gathering information to making a purchase (and possibly beyond). This will help you identify the channels that you need to establish and manage for your business.

    Customer Relations

    If you have already thought about the customer journey, you’re halfway to defining customer care. It is not only important to consider how to attract and win customers, but also how to keep the ones you already have. Consider the following questions:

    Key Partners

    In the next step, you will think about possible partnerships and how you and your business depend on them. This includes suppliers and vendors, as well as technology partners or regulatory bodies that you need to work with. Focus on the really relevant partners without whom you couldn’t do your job.

    Key Resources

    The same applies to Key Resources. Here, the resources needed for your work are listed, including:

    Of course, not every pencil you need to buy for your business needs to be listed here. The focus should be on the critical resources for success.

    Key Activities

    The definition of Key Activities is one of the simpler tasks in the Business Model Canvas. Here, all activities that contribute to the success of the business model are listed. The other components of the business idea also contribute to this, which is why it is worth deriving the Activities from them.

    In general, you need to ask yourself what activities need to be performed to fulfil the value proposition, win customers, and maintain day-to-day operations.

    Revenue Streams

    Next, it is important to define how you make money with your business. For freelancers, this means defining their hourly rate or considering other revenue models to generate income. Are there perhaps special contracts that bring recurring revenue or are only the hours billed each time? Define all essential sources of revenue and how they work.

    Cost Structure

    Lastly, the cost structure is defined. The most important variable and fixed costs and their causes must be identified. These may include:

    The Lean Canvas

    As a further development of the Business Model Canvas, the Lean Canvas became known in 2010. It is specifically adapted to the fast-paced and limited resources of a startup and focuses on the problem to be solved and the solution to be provided, as well as the so-called unfair advantage and the core metric. In the Lean Canvas, these elements replace the Key Activities, Partners, Resources, and Customer Relations.

    Lean Canvas template for freelancers

    Often business ideas fail because they don’t solve a relevant problem. Therefore, this component was added to the Lean Canvas.

    Once the problem to be solved has been identified, the focus shifts to providing a corresponding solution quickly and easily. The Lean Canvas approach involves using an MVP (minimum viable product). The MVP represents the minimum version of the solution – the raw version. This is launched on the market as soon as possible and then further developed in collaboration with customers.

    The unfair advantage essentially describes the competitive advantage. For startups, it is important to know this very well or, if it does not exist from the beginning, to define it.

    Young companies often lose themselves in the masses of numbers and metrics that define the success of a business. To prevent this, entrepreneurs who choose the Lean Canvas approach should first define only one metric from which they can measure success and failure. At the beginning, when the survival of the company is paramount, this could be profit. Later, when it comes to growth, other metrics come into play.

    How to create a freelance business plan – Template + checklist

    For those who have thoroughly considered their business idea beforehand, writing a freelance business plan will be easy. The elements of the Business Model Canvas or the Lean Canvas often overlap with the elements of the business plan and only need to be worked out in more detail. The planned size and complexity of the business idea also determine the content and scope of the plan.

    The following elements provide a guide for creating your freelance business plan:

    1. Executive Summary

    The Executive Summary is a brief overview of the business plan. The business idea is explained briefly and concisely, usually along with the purpose, objectives, and goals of the business. The industry and growth potential of the market are described, and finally, the key investment and financial data are presented.

    Write the Executive Summary at the end of the business plan. It serves as a compact overview of the business idea and as the first evaluation criterion for the potential success of the business model and its financing for potential investors.

    The chapter, which should be no more than one and a half pages long, includes:

    2. Company & Strategy

    In this section, the foundation for the company’s concept is laid out. The approaches for a successful implementation are presented in detail. It is also important to highlight the arguments and strengths of the idea and the planned company. These can be supported, for example, by a SWOT analysis.

    The following sub-chapters are included: