Should you turn your freelance career into a small business?
How to know if you’re ready to expand
The motivation to become a freelancer is very similar to that which motivates entrepreneurs. They are tired of working for somebody else.
Perhaps they have spotted a gap in the market, and they think that they can make a better try of things going it alone rather than being stuck as a wage slave for somebody else.
If your freelance career really takes off, you may reach a crossroads where you have to decide whether or not to take the plunge and scale up the business beyond that of a one-man band.
How do you know if you are ready to expand?
The signs are pretty obvious. If you are regularly turning away valuable work because you are simply too busy, then the chances are that you could grow the business. However, before you commit to becoming a slightly bigger (though still small) business, you need to ask yourself a few questions.
Do you want to grow?
The reason you went freelance in the first place may have been to have a more straightforward existence. You may also have wanted less stress and a better work–life balance. Becoming the boss of a growing business will lead to a whole heap of new challenges you will have to face, not least hiring and managing staff. The first few years will be tough and there is a high chance that your enterprise could fail. It’s a big change – do you really want to do it?
Can you do it?
The skills that have made you a great freelancer are not necessarily the same as those which will help you to build a profitable growing business. What skills will you need, and if you don’t have them or can’t obtain them, where will they come from?
Will it be profitable to grow?
With any growth plan, your costs will increase as you scale up the business with new staff, premises, equipment and marketing costs. Are the margins in your business enough to make your efforts worthwhile?
At the end of the day, might it not be as profitable to stay as a one-man band?
What’s the plan?
Business conditions are pretty good for you at the minute, which is why you are considering growing the business, but in the longer term you need a business plan that takes other eventualities into consideration. What are your targets for your first few years? How will the business develop in that time? What happens if business dips?
Can you grow and remain a one-man band?
You need more resources, but that doesn’t mean that you have to become a bigger business in personnel terms. It may be possible to outsource more of your business to other people. Co-working or partnering may also allow you to take on bigger and more profitable jobs without relinquishing your freelance status.
Is there another way ahead?
The prospect of expanding can be daunting and is certainly something that should be considered carefully.
However, if it’s truly the right course for you – with some careful planning, your freelance venture could become your very own small business empire in no time.