Starting a business as a freelance writer, author, or proofreader can seem like a daunting task, but with a solid business plan, it’s an achievable goal. This guide walks you through the essential components of creating a business plan for your writing services, from competitor analysis and pricing to budgeting and income projections.
Identifying Your Niche and Pricing Your Services
The first step in any business plan is understanding the market and your place within it. For a freelance writer, this means identifying your competitors and analyzing their offerings. A quick search online will reveal numerous platforms and individual professionals offering writing, editing, and proofreading services. Websites like Fiverr are excellent places to start, as they provide a clear view of the types of services available, how they are packaged, and the rates people are charging.
Once you’ve identified a few competitors, you can perform a basic SWOT analysis and compare their pricing strategies. Should you charge the same as your competitors? Or is it better to position yourself as a premium service with higher rates? The answer depends entirely on your target market. If you are aiming for high-end corporate clients, a premium price tag might be more effective. If you’re targeting small businesses or individuals on a tight budget, being the most affordable option could be your best bet. By understanding what your competitors charge and who they serve, you can determine a pricing strategy that aligns with your business goals.
Let’s say you’ve completed this analysis and have established your rate card for various services, whether it’s an hourly rate, a per-project fee, or a package deal for things like book editing or blog post bundles. With your charges set, you can now translate this into a comprehensive budget.
Creating Your Budget: The Minimal, Ideal, and Pie-in-the-Sky
A well-rounded business plan includes three different budget scenarios: the minimal, the ideal, and the “pie-in-the-sky” high-end budget. This approach allows you to plan for different levels of success and prepares you for the costs associated with scaling your business.
The Minimal Budget: This budget includes only the absolute necessities to get your business off the ground. For a freelance writing service, this often means operating from your home office. The primary costs will be legal and licensing fees. You’ll need to check your state’s Secretary of State website to determine the cost of forming an LLC, and you may also need a city or county home business license. A conservative estimate for these fees is around $500, but in some areas, it could be closer to $1,000.
Beyond legal fees, your minimal budget might only include a few essential equipment upgrades. If you already own a computer and a printer, you might only budget for a larger monitor to improve your reading and editing workflow ($200). You might also consider a dedicated business phone number, which can be acquired affordably through services like Magic Jack. Marketing at this stage is also minimal—perhaps just basic business cards and a simple website you build yourself to save costs.
The Ideal Budget: This budget builds upon the minimal one, adding in strategic upgrades that will improve your efficiency and professionalism. You’ll still be working from home, but you might invest in a faster computer to handle more demanding tasks ($500-$1,000). You’ll also allocate a budget for a professional to build your website, ensuring it is polished and reflects your brand. You’ll also still need business cards for networking events.
The Pie-in-the-Sky Budget: This is your dream budget, including everything you would ideally want to have to run your business at its peak performance. It includes the faster computer and monitor from the ideal budget, but you might add a high-quality laser printer for professional-grade document printing. You might also invest in ergonomic equipment like a specialized keyboard and mouse or even a stand-up desk to improve your long-term health and comfort while working. This budget accounts for maximum productivity and comfort, without being overly extravagant. All legal and licensing fees are still included, as they are non-negotiable for all budget levels.
Projecting Your Income Stream
With your budget in place, it’s time to project your income. As a freelancer, your income is directly tied to the number of hours you can bill. A realistic projection considers that only a portion of your time will be spent on billable work. The rest of your time will be dedicated to essential business activities, such as marketing, networking, and seeking new clients.
A good rule of thumb is to assume that you will spend about half to three-quarters of your time on billable work, with the remaining time dedicated to business development. A good starting point is to aim for 30 billable hours per week as your maximum capacity without overextending yourself. However, it’s important to be realistic, especially in the early stages. For a new business, you might only achieve five to ten billable hours per week as you build your client base.
To project your maximum income, take that 30-hour-per-week figure and divide it among the different services you offer. For example, if you offer blog post writing, ghostwriting, and proofreading, you would allocate a certain number of hours to each. By multiplying the hours allocated to each service by your established rate, you can determine your potential maximum annual income. This maximum income projection is a crucial metric for evaluating the viability of your business idea and can serve as a target for your first year of operation.
By following this structured approach, you can create a detailed and realistic business plan that will guide you through the exciting journey of becoming a successful freelance writer.