Planning the Start-up Shopping List

Feb 2, 2009 Excerpts Leave a comment

This is an excerpt from the book, The Principles of Successful Freelancing. Sample chapters are available for downloading from this page.

An important element of this big planning phase you’ll need to do before (or while!) you’re making your move to freelance is to start preparing yourself for some of the expenses you’ll be faced with over the first few months.

Now, I’d like to say there won’t be any costs, but that’s simply not true. However, I can say that shopping around for the best deals, looking for opportunities to swap services with suppliers, and staggering your expenses will certainly alleviate the sting of spending money when all you want to do at this stage is earn a little.

There are immediate costs, depending on your current situation, and then there are costs that you can delay for a while. The best method of allowing for these costs is to create a list, prioritize what you need in which order (based on your current situation), and then expect the higher end of the price range. That way, when those costs work out to be cheaper than anticipated, it’s a bonus for your bottom line.

“Must have” costs include:

* business card printing
* domain name registration
* web site hosting
* telephone costs
* hardware
* software licensing
* legal or licensing costs

“Should have” costs include:

* insurance for office contents
* income insurance or business continuity insurance (if you’re able to be covered)
* office equipment (desk, chair, light, filing cabinets, printer, and so on)

Ideally, you would cover these costs at the same time as the must-haves, but the reality is most people won’t be able to take such a budget hit in their first month of freelancing, so they can be slightly delayed.

Tip: Thrifty Bargain Hunting!
Don’t forget how much cheaper it is to seek out second-hand office furniture and equipment—you can find bargains through the likes of eBay, your local trading post, or used furniture stores. You can set yourself up with perfectly functional trappings at a fraction of the cost of all-new, shiny furniture.

“Nice to have” costs include items such as:

* new hardware
* dedicated servers
* magazine subscriptions
* industry association memberships

These would be great if you have the capital, but they can easily be delayed if circumstances dictate.

Through good planning and careful attention to your cash flow, these costs won’t have as much impact as they may seem to have now. We’ll go through finances in more detail in the next chapter.

Note: Leasing versus Buying
When it comes to any high-investment equipment you might need, leasing is a well-known method of improving your cash flow by paying a far smaller amount per month over the life of the lease.

Although the end result is that you pay more for the equipment than if you bought it outright, the benefits of having more cash on hand can be an excellent compromise. You’ll often be surprised at the small difference in final figures, and realize the benefit of being able to hand the equipment back or upgrade it at the end of the lease term.

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Cindy Prosser on Freelancing

Jan 28, 2009 50 Words Leave a comment

Cindy says…

Be unique!  Have that special something that will prompt your client talk about you to others. While you may be unable to compete with other freelancers or businesses on knowledge, price, etc., you need to have that special something that makes them want YOU. Even if your work isn’t spectacular, you’ll be spectacular to work with.

About Cindy
Cindy is visual designer & information architect who got into designing with web standards in Ottawa, Canada 8 years ago & currently has Attitude e-media in Mandurah, Western Australia. Our mantra is “build websites with the respect that the Web deserves”.

About this Post
This post is one of a series, written by various people within the web industry. They are responses to my request for a maximum of 50 words on the topic of tips for freelance success. You can use the 50 words category to see all the answers so far.

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Establishing Goals and Milestones

Jan 26, 2009 Excerpts Leave a comment

This is an excerpt from the book, The Principles of Successful Freelancing. Sample chapters are available for downloading from this page.

All this talk of business-planning documents and SWOT analyses may be making your head spin, and you’re forgiven if you find yourself glossing over them in your rush to make a tangible start on your own business. However, I strongly suggest that you take a moment to write down some simple goals and then define some milestones.

Goal-setting helps filter all of the thousands of thoughts and ideas you have into a list that’s far more manageable. High achievers in every field from sports to business consistently suggest that goal-setting is an invaluable part of the process. Goals can help you define your objectives, help you to understand what’s important to you, motivate you towards achievement, and build your self-confidence.

I find goal-setting is most helpful in distinguishing what’s important and what’s irrelevant. This helps me concentrate on what really is crucial to me, and gives me the freedom to spend less time on the rest.

Many people use the acronym SMART when creating goals, as well as for other project management methods. SMART stands for:

• Specific: is the description of the goal precise?
• Measurable: do you explain how you will measure results?
• Attainable: is it possible to achieve, with some effort?
• Realistic: do you have the power to control the results?
• Timely: do you have a deadline for the goal?

The reasoning behind SMART holds that a vague goal is an almost useless goal. As an example, say I needed to win more projects; I could define a goal as, “Get more web site projects.” Sure, this is better than nothing, but how much more inspiring would it be if I changed it to say, “Win five more web site projects this quarter.”

See the difference? I’ve been specific (I want to win more projects); I’ve been measurable (I want five more in the next three months); my goal is attainable (who couldn’t win five projects in three months?); my goal is realistic (I know I can deliver five projects within that time); and it’s timely (it has a three-month deadline).

Setting a great goal should challenge and stimulate you. If I downsized my goal to winning one project in the next two months, I’d be more likely to slack off. It also needs to be realistic, though, so some impossible expectation of getting ten projects in three months would set up almost certain failure. It’s a good idea to limit yourself to just a handful of short-term and medium-term goals—writing an exhaustive list of everything you would like to complete prior to your death is a sure way to demotivate yourself.

Tip: Goal-setting Help
You may have heard of the popular Web 2.0 application, 43 Things. This site presents a great example of goal-setting at work—try listing your goals on 43 Things, or simply use a text file or whiteboard, and see how you go!

Now, when we think of milestones, we normally recall a large web project we’ve been involved in. Think of a milestone as a landmark towards your longer-term goals.

A typical milestone is to realize a situation where you’re earning more than your current salary within a year of going solo. There are some smaller milestones you can place along the way to see how you’re shaping up.

The first milestone would be having the ability to pay yourself enough to survive on. Let’s say that’s about half of what you earn today. Set a milestone based upon how long you believe it should take to reach this point—it may be a month, or perhaps three months, depending on your situation.

Now, let’s consider your return on investment, which is initially to reclaim all of those start-up costs involved in your transition to freelance life. These vary, of course, from person to person, but you should have an idea of how long this would take.

The third milestone is that of bringing home the same salary as you currently earn. Will this take six months, or nine months, or even longer?

Write down your milestones and refer to them over the coming months—you’ll be surprised how quickly you reach them, exceed them, and find yourself setting more goals for future success!

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Bob Sawyer on Freelancing

Jan 21, 2009 50 Words Leave a comment

Bob says…

Spend at least two to three hours a week on networking and relationship building. The relationships you make may not pay off immediately, but you never know when someone will pop up with a job or referral. Join LinkedIn, get involved locally, and always be willing to collaborate on jobs.

About Bob
Bob Sawyer is the owner and head bottle washer of Pixels and Code, a web development shop in Atlanta, Georgia. He has freelanced on and off for about eighteen years.

About this Post
This post is one of a series, written by various people within the web industry. They are responses to my request for a maximum of 50 words on the topic of tips for freelance success. You can use the 50 words category to see all the answers so far.

If you enjoyed this post, please subscribe to the RSS feed!

Creating a SWOT

Jan 19, 2009 Excerpts Leave a comment

This is an excerpt from the book, The Principles of Successful Freelancing. Sample chapters are available for downloading from this page.

The planning term SWOT first appeared in the 1960s. A SWOT analysis is really just a simple strategic planning method that helps evaluate projects and businesses. It’s based around a four-square grid, shown in Figure 1, “The SWOT grid explained”, which covers Strengths, Weaknesses, Opportunities, and Threats. I’ve used it a number of times to help me make decisions around new products or service offerings under consideration, and it works just as well for business models.

Example 1. Business Planning Questions

summary

* What is the initial concept?
* What is your current situation?
* What will your key success factors be?
* What are your longer-term vision and goals?

market analysis

* What does the current market look like?
* What is your target market?
* What are the characteristics of your perfect client?
* What do your target clients require?

competitive overview

* What does your industry look like?
* Are there many competitors?
* Who are your five closest competitors?
* What products or services do they offer?
* What opportunities do you have to be unique? (Can you fill a niche or be different from your competitors in some way?)
* What are the risks and threats?

sales and marketing

* How will you attract clients?
* How can potential clients find you?
* What marketing activities would you consider?

plan of action

* What do you need to do in order to kick things off?
* What should you do in the medium term?
* What are some longer-term plans?

Figure 1. The SWOT grid explained

To start your own SWOT analysis, list all of your strengths and weaknesses—these can be thought of as the internal elements, over which which you have some degree of control. Continue by identifying all of the opportunities and threats that you can—these are generally external forces, such as competitors and the industry at large. Then, look for ways to use your strengths, improve on your weaknesses, exploit the opportunities available to you, and fend off the threats.

A SWOT analysis certainly doesn’t need to be as long-winded as it may sound; I have found some of the most useful SWOT analyses are those that fit onto a single page. By way of example, let’s look at our very own Jacob and Emily.

Jacob has put together the beginnings of a SWOT, which looks like this:

Emily, on the other hand, has put together a SWOT that is more like this:

These examples are only a few lines long, but you can easily extend them to a page or more. The concept is really a succinct and useful method of establishing your pros and cons.

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