Are you ready to diversify your current freelance offerings?

This is one of those lovely little bubble bursting lessons that so many of you don’t enjoy. But it’s necessary to see if you are ready. The first rule of freelancing is to work out what you are good at. Know what you offer and make your focus clear.

But after a while, either you’ll get bored or the market will change. And you’ll probably need to consider whether to diversify what you offer.

The trick here is to follow 3 simple rules:

1. Don’t get caught up in trends and keeping up with the freelance Joneses

2. Make sure you know what you are doing well enough in order to compete

3. Be sure that what is driving you to make a change is correct

Whether you choose to add another layer of services to your freelance business or you’re seeking to set up a physical product doesn’t really matter. If you make sure you’ve ticked all 3 of those boxes, you’re onto something.

Designing your adventure

The reason why you should ignore trends and other freelancers is because there’s commonly an over-supply of ideas if you look to your competitors for advice. Think of Thai in Newtown or indie bands in Melbourne- someone thought they were great to have as part of the culture. But at a certain point, it got a little ridiculous when everyone else jumped on board.

Any decent startup entrepreneur will tell you the secret to a great idea is timing. We like to think it’s the elements of problem solving or the authority we’ve accrued but the reality is, if you are too early or too late on a trend wave, you won’t have the longevity you seek.

There is a current glut in the market with freelancers offering workshops and educational products. I am in essence a part of that (you’ve bought my product to learn after all!). But you’ll notice some specific differences between what I offer and others put out there.

That’s because my research showed freelancers have a bunch of questions, are often cash and time poor, and need to be able to drop in on their educational opportunities to solve the problems that bug them the most. I didn’t look at what everyone else was doing (mainly big ticket online courses or face-to-face teaching). Instead, I built my own offering.

When building a product, here is what you should look at:

• Knowing your audience – I used the Freelance Survey and the Freelance Jungle to research the need for a freelance course and what it should contain.

• Know the problem you are solving- there’s no point in producing something that doesn’t match the need of your customers.

• What will customers pay to solve that problem – this is a tricky part because people will always tell you underinflated or overinflated figures on what they would be willing to pay. But you can think about how important the problem is you are solving in relation to that audience and match that against what they currently do to get around that problem.

• What solution they currently employ- don’t just compare your idea with direct competitors. For example, if you want to launch an online course, consider how people learn outside similar course offerings such as face-to-face, books, blogs, workshops, DIY or on the job etc

• Your ROI – your competitors don’t necessarily know how to price what they offer. They certainly don’t know what it costs for you to do what you do. So make sure you price against what makes your business viable. Then return to the other points above and compare what you need to charge against what people are willing to pay.

And this doesn’t just work for your new products as well. Always make sure you know what it costs for you to be in business. Set aside a percentage of what you earn for your own marketing, blogging, admin and non-direct client costs and incorporate that into your pricing.

Make your business sustainable by knowing what it costs.

Strategy versus reaction

At any given time, we’re being pulled by our client’s ideas and our own. It’s important to know what the strategy should be for your business. Comparing your ideas against the opportunities available doesn’t need to be a headache. But it does need to be strategic in order for you to work out what you need to do.

Whenever you are greeted with an opportunity, look at the pros and cons in terms of:

PROS:

1. How will this make me money?

2. How will this help me acquire customers?

3. What impact does it have on my overall brand?

4. What level of effort is required to gain a return on investment?

5. Does it suit my long term goals for the business?

CONS:

1. How much will it cost to launch this idea?

2. How much time will it take away from revenue generating activities in the initial stages?

3. What is the maintenance level required to make this successful after launch?

4. What determines if this idea is a success?

5. What other factors outside my sphere of influence will impede this product’s success?

6. What is the opportunity cost of devoting time and money compared to other ideas I may have?

If you aren’t asking these questions and finding out the answers, chances are you are reacting as opposed to building a strong strategy. You have to know this so that if you change your business model or extend what you offer, it becomes sustainable over time.

You may also need to consider partnership questions in tandem with what you are assessing. We’ll cover this next lesson.

But for the meantime...

The fallacy of pricing for immediate gain

Launching a product or service that doesn’t pay for itself is stupid. However, launching something and betting the farm on it generating cash and making a profit straight off the bat is just as dumb.

All business offerings take time to mature in the market. Nobody starts something and makes thousands and millions straight off the bat. What you usually see of a successful product is the tip of an iceberg with an awful lot of hard work beneath it.

You know this through being a freelancer. You’ve had to push your business in order to gain traction. This doesn’t really change when you decide to change your business model or launch a new product.

If you launch a product to pay you back straight away, you’re courting disappointment. Or you’re playing it pretty safe and probably won’t get to the potential of greater income later. So often, it becomes a question of short term gain versus long term profitability.

You have to ask yourself whether you can wait for bigger money. And you have to ask yourself if you can afford to fail, too.

What most freelancers forget is that products take time to cut through and often require their own nurturing and attention. While you wait, you’ll need to understand if you can afford the time and potential loss of income associated with that.

Betting the farm on the idea has an emotional cost if it fails, too. So you need to be prepared for this distinct possibility. I know a lot of marketing out there is geared more towards all the gains you receive and how much you will make after taking an amazing leap.

But the failure rates for new products are still high and you need to be able to remain sustainable so that any failure doesn’t take your business down with it while you transition.

• How much can you afford the idea while it grows?

• How much potential will it give you in the future?

• Is it better to play safe and expand later?

• Is the attempt to crack the market worth the possibility of failure?

Desire versus business sense

“I like teaching”
“I’m tired of working on X”
“I’m sick of crazy customers”
These are personal statements that are better dealt with through a little soul searching, counselling or a holiday. They are not the cornerstones of smart business product development.

Every freelancer hits a wall at some point (most around the 5 year mark) that will cause you to want to launch a product or diversify your services. That doesn’t mean you should do it.

You can’t fix tedium with products, especially ones that are not well thought out or strategically aligned with your brand. Always think of your customer in relation to your skills in order to create a product that is indeed useful.

And if you are feeling burnt out, stuck, unhappy and ready to punch clients, look at what you can do to improve your outlook on the stress reduction, relaxation, refreshing the thinking level instead. Take the emotional out of the equation and critically examine the desire for a new challenge against what your business needs.

Practising learned ambivalence comes down to:

• Knowing the cost of your idea in terms of time, money and effort

• Matching that against predictions on how quickly it will be adopted

• Understanding (roughly) how long it will take for your product or new service to reach maturity

• Having a safe enough distance from the new idea that it’s not placing undue pressure on the business

Go through each of these sections and asking yourself hard questions in relation to your motivations and what you want to get out of the process. Ask yourself if you want to change the business up in real terms. Do some maths. Plan a strategy.

It’s far better to approach these kinds of changes from the point of view of having a plan for both your current and future business. Not to mention your stress levels!

Next lesson, we look at whether partnerships and collaborations are a good idea.