When it comes to running a successful business of any kind, including freelance writing, much of that success comes down to the decisions you make. You make good decisions that help you grow. You make bad decisions that hold you back. Or you might make decisions solely to maintain the status quo. Today let's talk about making better business decisions when it comes to your freelance writing career to help you get the most out of your business.
Here are a few tips for making the best decisions for your freelance writing business.
Be Realistic About Income Goals.
You can't run a successful business if you don't understand the basics of the finances involved. That means understanding that freelance incomes aren't directly comparable to employee incomes. It means understanding the taxes and expenses and how they impact net vs. gross earnings before you set your rates. It also means understanding how the difference between working hours and billable hours affects what you should be charging for projects on an hourly basis.
When you understand the numbers, you can set realistic income goals. Pulling a number out of a hat or saying "I made $40,000 as an employee so I want to make $40,000 as a freelancer," aren't realistic. They're ignorant. And setting rates without crunching the numbers is a recipe for disaster in many cases. The rates you set are incredibly important. They don't only determine what you earn. They determine who your target market includes. They determine what marketing methods will be most effective in increasing sales. "Price" is one of the 4 Ps of marketing for good reason. Many of the professional decisions you make will at least in some part come down to rates.
Need some help setting realistic rates? Try using the advanced version of our freelance hourly rate calculator (just click the advanced link near the top of the tool).
Know Your (Real) Market.
It's pretty difficult to make responsible business decisions if you don't know who your target market includes. You could waste a lot of time and money marketing services to people who aren't in your market and who have no demand for your services (or who can't afford your rates). Make better marketing decisions by knowing who your market really includes, what kinds of budgets they have to work with, who they are targeting in their own businesses, and what they hope to get out of the kinds of services you provide.
Get to Know the Competition.
It's also important to get to know your competition. You don't have to copy them. But you can see what things have worked well and what haven't. That could help you make better decisions about marketing tools and tactics to use. The competition could let you make better decisions about rates and raises too. Knowing what works, and what doesn't, for others can help you make better decisions about your own plans and goals as a freelancer.
Keep and Eye on External Trends.
Not sure where to take your freelance career in the New Year to take it to the next level? Pay attention to external trends. Is there a new type of business booming suddenly that you could target with your services? Are people using things differently now than they were a year or so ago? This is what happened to press release writers a few years back. they transformed from print release items to heavily-used online PR tools, and the new distribution outlets allowed that service to boom in new markets.
Evaluate Your History (Personal Trends).
One of the most important things to keep in mind when making business decisions is your own history. You know how you work best. You know what types of projects you never seem to finish. You know where you tend to excel. Use that knowledge when setting new goals for your business or deciding how to promote your services.
Never settle until your freelance writing career is exactly where you want it to be. Don't assume progress is too hard, too time consuming, or too costly. Use the tools mentioned here to help you come up with a plan that suits you and your business. When you make better business decisions, you don't have to worry about setting yourself back or getting stuck in a rut. You can take your freelance writing career anywhere you want it go.
Jenn, your tips make perfect sense and I think even those seasoned freelancer writers out there would gain a lot by reading this. Freelance writing is not a simple feat, unlike many people think and to have a successful career out of it is a hit or miss deal. For those who are successful, complacency can be an easy indulgence to succumb to where you think you don’t need to improve your skills anymore. That’s when your competition jumps ahead and you can only scratch your head and wonder why.
I especially like the Personal Trends tip. It’s so true. Each year I get smarter (I hope) about the freelancing business. I like to have a mission summed up for my yearly goals. In 2010, that mission was Work Smarter. I feel I succeeded, but there is always room for improvement.
Ajeva is right. Whether you are new or a seasoned freelancer, these are great tips and timely as I work on my 2011 business plan. Thanks, Jenn, for sharing your experience. It is greatly appreciated.
Can I just bottle you? I mean, really. This is golden advice. So true about the income goals. I may have made $40K in my office position, but that was with someone else paying my insurance, half of my 401(k), and offering me pension benefits.
Also, you’re so right about the rate determining your market. Amen. Why would you need $150 an hour but market to content mills? Because you didn’t listen to Jenn and do the math. 🙂
Great advice! I’m thinking about my goals for 2011 but haven’t settled on anything that’s concrete. I know I’d like to earn more as a freelancer but need a better marketing system and strategy to pull it off.
I think it’s important to know who your audience is, and what kind of client base you are shooting for. You have offered some advice that is worth thinking about. I am currently thinking about my goals for 2011 and I know I will be coming back to look at this post and take some of the items into consideration when I do create my goals.