There is a tendency to believe that if we have a good idea for a business, all we need to do is build it and they will come. Unfortunately, if they don't know you're there or what it is you do, nobody will beat a path to your door. You need to know if there's enough of a market out there for you to make a living.
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Competition Analysis for Freelancers

There is a tendency to believe that if we have a good idea for a business, all we need to do is build it and they will come. Unfortunately, if they don't know you're there or what it is you do, nobody will beat a path to your door. You need to know if there's enough of a market out there for you to make a living, and with whom you're going to be slicing up that market pie. Chances are, someone is already doing what you want to do, and already has established clientele. Face it, you're an unknown entity, and you will either have to unseat the competition or find your own customers who need your unique talents.

There are two types of competition out there, and this applies to any business: internal and external. The internal competition is your potential client's employee who, in addition to their regular duties, also does the same thing you do in their "spare" time. Or, the company may have established a bona fide department to do the work that you are proposing to do for them. The external competition comes from other freelancers like you - all vying for subcontract work from the same market base out there.

I have found that neither type of competition needs to be particularly threatening. In fact, I have worked successfully with both types, including the big company with the in-house resources but with more workload than they can handle.

The good news is that even the direct, external competitors are usually more than willing to tell you about the market. Some may be rude and hang up on you when you call, but chances are, they're not the kind of freelancer you want to be anyway. Some competitors may even offer to subcontract work to you if they're overloaded. It happened to me!

It can be daunting picking up the phone and asking them if you can pick their brains. But you have to talk to them. You need to find out what rates you can charge, what niche areas of your field aren't currently being fulfilled, what companies are or are not subcontracting and whether or not there is enough work in the area to sustain another person with your talents.

A simple acronym to remember is SWOT: Strengths, Weaknesses, Opportunities and Threats. What Strengths do your competitors possess that you don't (for example a knowledge of a particular industry) and does that represent a Threat to you getting work from a particular company or geographical area? What Weaknesses do they admit to that represent an Opportunity for you in your market?

Depending on your market, it may actually be difficult for you to find external competitors to talk to. Freelancers tend to be low profile because they often work alone, and don't often list in the Yellow Pages™. In that case, select several companies that you would like to do work for, and ask them how they handle their outsourcing requirements.

Maybe they'll tell you who they're subcontracting to, or that they look after their own requirements internally, thank you very much. Or, maybe they'll ask you to interview with them for an upcoming project. Bonus - competition analysis and sales lead in one phone call! Once you complete this exercise, you will be in a much better position to determine whether or not you have a chance of making a living at this in your region.

This is merely an introduction to SWOT analysis. Read more about the subject. There are plenty of basic business books covering it, or just Google™ "SWOT". Competition analysis makes simple sense. You wouldn't dive into waters without knowing if they're deep enough or contain hazards, like piranha fish. The same thinking should apply to any business you are contemplating entering.


Gordon Wood is an engineer, writer and stock photographer in London, Canada. His main activity is technical writing, which he conducts through his company, Task Partner. He has served in various industries, including microelectronics, anti-submarine warfare equipment development, heavy equipment manufacturing, medical imaging systems, digital projection systems and contract electronic manufacturing. Gordon's photographic work can also be viewed at RealWorld Photography

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