What Makes a Freelance Business Sustainable?
This is the first in a series of blogs summarizing learnings from The Future is Freelance Forums. These forums are where stakeholders from all levels of the freelance ecosystem (freelancers, agency leaders, coaches, platform CEOs, enterprise leaders, etc.) come together to surface and solve the biggest problems facing independent work. These summaries will serve as a place to house our collective wisdom on these topics. As such, I want to credit everyone who attended this forum for these insights.
What does sustainability mean, and how are we intentionally designing our businesses to foster it? In my work with solo business owners, sustainability (or lack thereof) is one of our biggest challenges. Sustainability is slightly different for everyone, but some common themes arise.
Defining the sustainability criteria allows us to design our businesses more intentionally to foster it. This applies not only at the individual level but also at the systemic level.
- How might our work look different if the whole ecosystem shared some common criteria for sustainability? How would our platforms and communities function differently?
- How might our tools be designed to contribute to systemic sustainability instead of hinder it?
- How might our business model change if designed with sustainability in mind?
We set out to think about this as a collective, and here’s what we learned. For each area, I outline sustainability for a solo business owner and key questions for other stakeholders in the freelance ecosystem. For the sake of simplicity, I’ll refer to these stakeholders as “freelance leaders,” which means agency leaders, coaches, platform CEOs, enterprise leaders, etc.
Define What We Need From Our Work
While there are some common criteria, sustainability looks different for everyone. Defining what we need to get from our work (and revisiting/redefining it regularly) ensures that we’re consistently designing towards that ideal.
This may sound simple, but we all get stuck in automatic mode, going through the motions, doing what we've been told is the “right thing,” chasing stuff we think we want, and working in our businesses all the time instead of on them. If we aren’t explicit about what we need from our work, we’ll never get it.
Money and financial success are key criteria, but money alone is insufficient to ensure a business's sustainability. Considering Maslow’s Hierarchy, we must first meet our basic survival needs, but survival is the bare minimum. Sustainable work must also meet our other criteria, including flexibility, fulfillment, growth potential, and real client impact.
Questions for Freelance Leaders
- How do your tools, practices, and structures reinforce a cookie-cutter definition of success instead of inviting people to define it themselves?
- What criteria do you use to measure success? Is money the only metric?
Know Who We Serve
One key trait of an unsustainable business is wasting time on clients who aren’t the right fit. There are many reasons we end up wasting our time on the wrong clients:
- We don’t know who our ideal clients are.
- We have trouble with boundaries and saying no.
- We have a scarcity mindset, so we feel obligated to chase any lead and take any work that comes our way.
- We don’t have a network of peers to whom we can refer people who aren’t a good fit.
Knowing who we are best positioned to serve (and not serve) is one key to a sustainable business. As solo business owners, our time is our greatest asset, and we can’t waste it on people who aren’t the right fit—it isn’t fair to us or them.
It is tough to say no to people if we don’t understand the people to whom we should say yes. Defining your ideal client is one of the best ways to focus your efforts and ensure sustainability. Don’t just define them by sector, need, or business size; consider who you like working with. There are many ways to “niche down”—it doesn’t have to just be about what their business looks like.
Being crystal clear about your ideal clients allows you to get more fulfillment from your work. When you focus on the right people, you stop wasting your time and theirs and have the most significant impact.
Questions for Freelance Leaders
- How do your tools, practices, and structures help freelancers consider idea client criteria and tailor their experience to those definitions?
Doing OUR Work
Sustainability also means focusing on OUR work, which is the work only we can do. This criterion goes hand in hand with knowing our ideal clients—it is impossible to do what only you can do if you don’t know who you serve.
So many of us copy what others are doing, implement “best practices” we’re told make a successful business or marketing strategy, and follow the standard steps that everyone else tells us are the right thing to do.
In many ways, this is what we have to do to learn what works and doesn’t work for us, what our style is, and how to be our most authentic selves. (I know because I’ve done this many, many times in my own business.) But we have to learn from others and then find our own way. As long as we’re trying to be like everyone else, we’ll never be able to embrace what makes our work unique.
Understanding OUR work allows us to build a unique, strategic business.
- We can focus on the services we’re best positioned to deliver and outsource or refer out the ones we’re not.
- We can interact positively with “competitors” and work with them as allies.
- We know when to say no to work, delegate tasks we’ve outgrown, systematize what we do, and pivot if needed.
Questions for Freelance Leaders
- How do your tools, practices, and structures push freelancers to tailor their services, collaborate with peers, and learn from each other?
Proactive Strategy
Sustainable businesses plan ahead, learn from their work, and make proactive choices instead of reactionary ones. It is hard to do any of these things if we’re constantly putting out fires, working more than we should, and focusing on things that don’t have the highest impact on our work.
A proactive strategy is not about sitting down once a year and “setting goals.” It’s about:
- Consistently examining the things in our business that are working and not working.
- Testing things out in short sprints and adjusting as needed.
- Setting up time rituals for ourselves to build better habits and make incremental changes over time.
Operating like this has implications for all business areas, from a robust pipeline to healthy systems and services evolving as we grow and client needs change. What are the time rituals you have in place as a solo business owner to consistently evaluate how your business is working?
Questions for Freelance Leaders
- How do your tools, practices, and structures give freelancers the space and checkpoints needed to craft and refine strategy?
- How can your tools, practices, and structures embed the time rituals needed to build better habits and make (and measure) incremental progress over time?
Financial Sustainability
In some ways, financial sustainability is the basis of a sustainable business. Returning to Maslow’s Hierarchy, it is impossible to think about higher-order things if we don’t meet our basic needs.
A key criterion for sustainable pricing is decoupling the relationship between time and money. As solo business owners, we only have so much time. To a certain extent, our time will always limit what we can accomplish, but pricing mechanisms (e.g., hourly pricing) make growth and strategic thinking very hard.
Sustainability also means knowing our business finances inside and out. We cannot make strategic decisions about our prices, time, or expenses if we don’t understand our income, expenses, and profit margins.
Strategic decisions also include knowing how much money we need and not pushing ourselves beyond that. This takes us back to defining what we need from our work; if we’re not clear about our financial needs, we can fall into the trap of chasing money for the sake of money and not what money gives us in our lives.
Systemically, financial sustainability cannot happen without price and income transparency. We must talk openly about money, prices, and profits to help each other get paid what we deserve.
Questions for Freelance Leaders
- How do your tools, practices, and structures support freelancers in understanding their finances and thinking strategically about them?
- How do your tools, practices, and structures foster income transparency and support wage growth instead of a “race to the bottom?”
So What? Now What?
I’ll leave us with a quote (paraphrased) from Maari Casey, CEO of Uncompany, who was one of our featured guests at the forum on sustainability. She summed up five essential things every sustainable business needs:
- Strong community
- Great clients
- Solid operations
- A Yoda (business mentor or coach)
- A cheerleader (someone who is always in your corner)
The learnings from these forums are not meant to sit on a shelf. I encourage you to think about each of these areas and ask yourself the following questions:
- What would you add?
- How have you designed your work to foster sustainability based on these criteria?
- In what ways will the sustainability of your work contribute to the sustainability of the freelance ecosystem?
If you’re ready to build a more sustainable business, learn more about my agile, community-based coaching method and book a Free 30-minute Clarity Call with me.