Elance Blog

How to Run Your Freelance Business Like a Corporation

Corporations thrive when key factors—efficient operations, low costs, positive returns on investment, and new opportunities—align. To maximize your efforts and profits as a freelancer, you want to run your operation with the same business savvy as a corporate leader.

In this white paper, STI Knowledge VP of Operations Tim Dewey explains that all roadmaps have a starting point, and identifying and monitoring a few key metrics in your freelance business can work the same way. Not only will you have the tools needed to objectively assess your current business, you can establish long-term goals, and identify what steps will help you reach them—just as a corporation does.

Here’s how to (and why you should) run your operation like a corporation:

1. Analyze your process. You may track the billable hours you spend on client projects, but do you consider where you spend time throughout an entire workday? What do your additional activities earn—or cost—your freelance business?

Corporate process-improvement teams are tasked with streamlining operations to eliminate waste, maximize resources, and ultimately produce more cost-effective outcomes. You can apply the same principles to improve your own productivity and profitability as a freelancer: For one week, keep a thorough record of all the tasks, including the seemingly meaningless ones (from snack breaks to reading Twitter updates), that you perform in a workday.

An honest observation will likely show that much of your time is devoted to producing work, communicating with clients, and prospecting. But you’ll also be able to spot unproductive patterns of behavior, such as “hidden” time-wasters like habitually checking and reacting to nonessential emails and chat messages, or social-media distractions that aren’t business-related. You may even find ways to improve your efficiency around essential tasks such as banking, invoicing, and running errands by taking advantage of mobile applications and automated solutions.

Remember: Time is money when you’re a freelancer, and the more waste you can eliminate from your business, the better your bottom line looks.

2. Consider the business case. Corporations use business cases to evaluate the tangible and intangible benefits of potential projects, products, and services. A typical business case includes the project’s goal and objective, which groups may benefit, how much it will cost in money and other resources, and the ultimate value of the best- and worst-case outcomes.

This approach reveals which initiatives are worth the time and effort, even when the answer may seem obvious on the surface. By evaluating your freelance business from the same analytical mind-set, you can prioritize your time, workload, effort, client base, and prospecting efforts.

Although money matters, it shouldn’t be the only factor you consider when evaluating freelance opportunities. Instead, think about a client’s or project’s total value. Ask: Does the client represent an industry that interests you? Does the work excite you? What current and future connections might the relationship offer? What is the project’s rate and long-term potential? Are the milestones for payment in line with your expectations? Consider the personal aspects of a client relationship, too: Is the client pleasant to work with? Does he or she encourage a work style (independent, collaborative, creative, structured, etc.) that suits you?

Business cases have different goals and objectives, but all give you the ability to determine—considering all of the factors at hand—whether a project or client relationship is beneficial to your freelance operation.

3. Evaluate your performance. Corporations conduct formal reviews to let their employees know what they’ve done well and what they can improve upon. As your own boss, give yourself comparable attention and scrutiny. At the same time each year (or at the conclusion of each job), ask your clients for a candid assessment of your work and their experience working with you. Remember, on Elance, all jobs are subject to Feedback, and Feedback scores play a factor in your Elance ranking, so take these assessments seriously. If you know certain clients prefer a phone call chat over virtual conversation, tailor your information gathering methods to their needs. Keep in mind, however, that you’ll extract a more honest assessment if you allow for anonymity. Free web survey tools like SurveyMonkey make it easy to compile a professional-looking, easy-to-use questionnaire that will allow your customers a confidential venue in which to provide feedback. Inquire about your strengths and weaknesses, how your work compares with that of other contractors, and whether opportunities exist to expand your relationship.

You might be surprised: Many clients will gladly provide their opinion, and will appreciate your focus on customer service. Their input can provide valuable insight to your strengths and weaknesses and help you to hone future pitches to meet client needs. You should also use the feedback to evaluate your experience and performance levels—and then assess whether your rates are still in line with your portfolio and skill set.

4. Continue your education. Corporations offer training and professional-development opportunities to keep their employees inspired and aware of industry changes, trends, and developments. Whether you’re new to the freelance world or have an impressive client roster, lifelong learning is key to your freelance future. Aside from offering an opportunity to expand your knowledge, continuing education will keep you competitive in using new technologies, and abreast of industry trends. It doesn’t have to mean shelling out thousands of dollars, either. Many community colleges and online universities offer fairly inexpensive courses that can be invaluable for keeping your skills fresh, especially if you’ve been out of the classroom for awhile, or have less formal education than your competitors. If you’re not interested in returning to a school setting, get involved in industry groups to network and remain on top of trends and industry developments. Consider attending conferences, either online or in the real world, to stay abreast of what’s happening both in the field of freelancing in general, and in your clients’ industries.

Aside from keeping you inspired, and challenged, continued education will position you as the expert resource that your clients seek, and communicate that you’re a professional freelancer versus a person who is simply “dabbling” in the idea. Don’t forget to add your ongoing training to your resume and update your online skills profile to reflect your capabilities.

Though freelancing offers freedom from some of the trappings of a corporate gig, being an outfit of “one” employee doesn’t mean you’re not a business. The more you become aware of your own expenses, operational habits, the value of your time, and the potential for growth, the more opportunities you’ll find to build your freelance business further.

About the Author
Stephanie Taylor Christensen, a Null Media author, is a freelance writer in Columbus, Ohio. She covers personal finance, consumer issues, work-life balance and health/wellness topics for ForbesWoman, Minyanville, SheKnows, Investopedia and several other online properties.

Comments

Interesting article. Adage magazine (April 30, 2012) was just telling traditional employees that they could conceivably earn more money if they carried out their work habits and practices as if they were freelancers.