How to have a sustainable business model

With the economy showing little in the way of recovery, every day there seems to be more and more people looking towards self-employment, in particular in the freelance or contracting markets.

This is having a strange impact on the supply and demand in the profession. People are often despirate for work, so set low rates – custonmers like the thought of saving so hire at the lowest cost… but what is the real cost?

When contracting or freelancing, it is not about generating an income – its about running a business. This means creating reserves for when there is no work. Driving day rate lower and lower does no-one any favours in the longer run. Customers want a reliable supplier (if you charge too little you wont be there in 12 months time), customers get used to low rates and poor quality (or hidden costs) and this damages the sustainability of the industry. Worse, some sites claiming to support the freelance and contracting market accept adverts for roles that are clearly un-sustainable – driving the profession into the ground.

Rates should be based on value and business aspirations not just cost. This works well for all parties in the medium to long term.

In the past we have written a number of articles on freelancing and setting sustainable rates and business approaches – links are included below.

If you are considering setting up on your own make sure that you dont fall into one of these 5 traps:

1. Starting a price war – you will lose
2. Undervaluing what it is you can do for your clients
3. Selling on price rather than value
4. Believing that the client really cannot afford to may that little bit more – just look aroud the carpark! (or on notice boards announcing their latest contract win)
5. Giving discounts – you will never raise the price for that client again – always add value – not reduce costs

https://rapidbi.com/going-freelance-in-training-or-hr-how-much-to-charge/

https://rapidbi.com/going-freelance-in-training-hr-or-as-a-coach/

https://rapidbi.com/tips-going-freelance-training-consultancy/

https://rapidbi.com/going-freelance-independent-trainer/

https://rapidbi.com/going-freelance-in-difficult-times-consulting-and-training/