You know the ambitions for your business. So why create a self-employed business plan if you're not seeking investment or funding? Even if you're working as an individual, going through the process can reveal incredibly useful and valuable insights, including strengths, weaknesses, potential opportunities and problems. Which gives you a much better chance of building a successful and sustainable self-employed career
One of the main elements of any business plan is establishing targets for yourself. Without anything to aim at or timescales to meet, it can be easy to put things off if you're not accountable to anyone else.
Working out when your business will become profitable, and what it will take to reach a desired income level, will help you understand how many clients you might need, the rates you will want to charge, and how many hours each week need to be billed at a minimum.
And while there’s no penalty for missing those targets, you’ll know in advance if you might need to cut back on spending or push harder to make up any shortfall. The flip side is that beating your numbers can allow you to save extra revenue, re-invest in your business, or just take some extra time off.
When you’re writing a business plan, it also helps you to see things from the perspective of a customer. Why would someone choose you rather than going to a competitor? How can you encourage people to stick with you in the future? And how are you going to market yourself to new clients, especially if you need to quickly increase your income?
If you discover there’s no real unique selling point to your business, you’ll have time to adapt and work on your idea before investing any money, or relying on it for your sole income. And by identifying any potential obstacles, you can develop solutions and alternatives before they become a problem.
One of the big challenges when you’re freelancing or self-employed is knowing when it’s better to say no to opportunities. Having a business plan allows you to prioritise tasks and projects that help towards your goals, and gives you the confidence and reassurance to turn down anything that will take time and money away from your objectives.
IPSE members can save time by using our helpful business plan template, which is just one of the useful resources for the self-employed in our library. But whether you’re filling in a prepared document or just jotting things down in a notepad, there are some key areas to think about.
You might not have all the answers when you’re getting started, and that’s OK. Going through the business plan process will identify where you might benefit from further research and advice, or uncover strengths you hadn’t realised until now. And any business plan should be an evolving document that you revisit on a regular basis to assess what’s worked and where changes might be needed.
Even the most well-prepared self-employed businesses can face unexpected problems. The unpredictability of working for yourself is part of the appeal for many, but changes in the global or national economy, an accident or illness, or the sudden loss of a major client can be hugely challenging for many people.
Use your business plan to account for issues which might crop up. For example, you might want to build up a network of trusted freelancers who could subcontract and cover client commitments if you’re suddenly unavailable, alongside the illness and injury cover included in IPSE Director membership.
If demand for your core products or services suddenly drops, do you have additional income streams you could use to cushion the blow? Or a list of advertising and marketing options which could be rolled out to increase enquiries at short notice?
Equipment failures can be a minor hassle when you’ve got adequate data and hardware backups available. Or potentially business ending, if it means you lose everything due to a failed hard drive or lost laptop.
And it also allows you to research the support and resources available to help during difficult times, whether that’s saving money as a freelancer, managing personal debt when you’re self-employed, or maintaining your physical and mental wellbeing. Knowing that there’s help available is a massive boost if you’re struggling, especially if you’re working largely alone.
It’s incredibly useful to set out a business plan when you first become self-employed, but it’s even more valuable if you regularly review and update it.
Your goals may change over time, which means your existing strategy and tactics will continue moving you in the wrong direction. Or your industry may have undergone significant transformation, even in the space of six or 12 months. A new competitor or technology may have launched, demand may have switched to a new product or service, or your audience may have moved to a different platform.
Your initial business plan isn’t set in stone. It’s simply to provide an initial direction for you to follow, ways to measure your journey, and methods for avoiding potential obstacles. Setting out your financial goals, marketing tactics and budgets lets you see clearly whether you’re making the right amount of progress on a monthly, weekly or even daily basis. Instead of restricting you, this should give you more time to change things that aren’t working.
If you’re just starting out or considering working for yourself, we have a dedicated advice section for those new to self-employment. Along with the IPSE Incubator for those in the early stages of their career, and included for free within IPSE membership for a limited time.
And there’s a wealth of information in our Advice section, from self-employed tax guidance, to freelancing as a new parent and managing stress.
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