The 9 Elements of a Strong Business Model for Freelance Creatives

The 9 Elements of a Strong Business Model for Freelance Creatives

April 21, 2011 by

I’ve been reading some fascinating stuff about putting together business models for a new venture I’m working on. Through doing the research, I’ve realised that formulating a business model that applies to freelance creative professionals is just as important as a model for any other minor and major business organisation.

What is a business model, and why do freelancers and self employed people need one?

A business model describes the reasoning behind how an organization or individual creates, delivers and captures value. Essentially, it is the framework through which an organisation makes money.

If you don’t have one in place, your money-making strategy is likely to be cloudy, less efficient, and confusing for you.

As a freelancer, you are in the business of creating and capturing value in this way, so it is crucial that you have a model in place when you set out to do business.

Here are 9 key elements of business models for creatives that you would benefit from knowing.

1. Customer Segments

This defines the different groups of people your creative work is aimed at. Make sure you know specifically who you are working and marketing for.

2. Value Proposition

This describes the value you are delivering to your customers. This is the response to the question: ‘What problems of our customers are we helping to solve?’

The value proposition of a graphic user interface designer, might be to improve the user experience of people using a site that would be of interest to site owners, for example.

3. Channels

Your business channels cover the methods you use in showing and delivering your potential customers the value in your product or service.

This could include the website you use in selling your products and the social networking sites you use in sharing information about your business.

4. Customer Relationship/s

You should be thinking about how to engage with your customers, and how to carry out a long term relationship with them. If you are dealing with more than one customer segment, you might find a very different type of relationship style is required.

For example, it might be crucial to dedicate considerable time in dealing with some clients face to face or on the phone.

With a different area of business, such as in selling merchandise, for example, it might be sufficient to make the process more automated and less personal, but it all depends on the nature of the market segment you are dealing with.

5. Revenue Streams

This represents the money you generate from one or more market segments.

You need to be crystal clear on exactly how you intend to create revenue from your business. For most creative freelancers, it would be a case of agreeing to carry out a service of some kind, and being paid on a ‘per job’ basis.

As another example, an alternative revenue stream could be subscription payments brought in from the customers of a printed magazine.

6. Key Resources

This describes the most important assets required to make a business model work and is key in the functioning of all other aspects of the model.

Such resources are all the elements required to contribute to your Value Proposition (2.), including your own personal skill, but also physical assets like software, hardware, printers, canvases, cameras and scanners.

7. Key Activities

These are activities that are crucial in making the business work. Like key resources, such activity is required to create and offer a strong Value Proposition, reach markets, maintain existing customer relationships, and earn revenue.

A key activity for a web designer might be in solving problems of web user experience and require face to face meetings with clients, whereas for a sports photographer, this would be in preparing for and documenting sports events, as well as delivering photographs electronically to customers.

8. Key Partnerships

These describe one’s network of suppliers and partners that exist to allow a business to function properly.

In some cases, partnership for freelancing or other creatives are not a part of their business model, but others, such as in the case of a collaborative group of illustrators working together or in marketing the work of a combined illustration collective, can act as a powerful element of an effectively functioning business.

9. Cost Structure

This defines how you go about paying for the things you use within your business. Being clear on your cost structure is an important element of your business model because it will define where and when you add or subtract costs.

You might create luxury furniture requiring high value materials. In which case, your business would be more value-driven, and depend on more expensive items.

On the other hand, you might provide a cheap and basic web design service that markets itself based on keeping costs low, with high output. In which case, you would strive to reducing costs wherever possible in your business.

These 9 elements all come together in creating a sound business model structure if used properly and appropriately.

It is definitely worth thinking about how each of these elements applies to your business and where certain areas might need tweaking in order to maximise value for the services you offer and therefore allow you to earn more of the green stuff.

Do what most freelance creatives don’t do, put together a business model that defines how you create value, and push ahead!

*Credit must be given to several sources of business model advice, including Alexander Osterwalder’s book: Business Model Generation, which I thoroughly recommend.

About the Author: Alex Mathers

Alex is a project starter, sometimes finisher, writer and illustrator. He started Red Lemon Club in 2009 with the aim of helping talented creative people leave their mark.

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"Your blog inspires me so much, and helps me feel somehow not as insignificant, despite the plethora of artists around the world."Natalie, artist

  • DeAnna

    This is great advice, something I need to do. Thanks for the push!

  • Alex Mathers

    Good stuff, DeAnna! Good luck :)

  • Will

    Excellent advice. This is something that can seem daunting and overwhelming. But you layed it out very concisely, and it was easy to understand. Thank you. This will be very useful to me.

  • John McDougle

    It is so easy to think that all you have to do is create great work and people will somehow find you and buy it. I see so many people talk about proudly about how they don’t have a plan and how they get all of their customers through word of mouth.

    This post shows how you need to think about the whole of your business if you want to thrive as a freelance creative, working on both creating and communicating. You do potential customers a disservice by not helping them find you.

  • Alex Mathers

    Well said John, this kind of stuff is important, if you take yourself as a creative professional seriously.

  • Faye Sharpe

    Hi Alex
    Absolutely right. Every business needs a model. How else will you know what ‘good’ looks like? How are you going to make that dream come true if you haven’t thought through the details. Creative entrepreneurs have the skills for imagining their futures, but many think they don’t have the time. It’s a simple, very valuable, process but it does take time… to think.

  • Alex Mathers

    Thanks Faye, great comment. The time taken to think through your business model, is worth it in the long term.


    Well said,Thank you john!

  • Self Marketing

    very nice article thank you for advice…!!

  • Lieven

    love your website with all these interesting articles.
    But i think it’s too bad that you don’t give credit in this article to the creator of the business model canvas you’re talking about: Alex Osterwalder and his book ‘The business model generation’.

  • Alex Mathers

    Thank you Lieven, for making me aware of my inability to give credit properly. This is something I rarely do, and I’m ashamed to say that in this case I had forgotten. Credit has been given!




  • Jim Robins

    Interesting and useful thoughts Alex. Thanks!

  • Alex Mathers

    Sure thing Jim! Alex

  • mahesh

    Hi alex
    Good info!!We are a group of creative designers.Today we started an FB group.DezinGuru.Welcome

  • Dan Clugston

    Thanks for the insightful article, well worth reading and implementing, even for a non-illustrator, but still creatively minded freelancer such as myself. Cheers Alex!

  • Alex Mathers

    Thanks Dan – there’s no doubt that what you do is creative – thanks for dropping by :)