Going IT Alone: The Handbook for Freelance and Contract Software Developers: A detailed guide to self-employment for software and web developers - from identifying your target market, through to managing your time, finances, and client behavior

Whatever services and/or products your freelance business provides, you will most likely find that all clients are unique; there are characteristics shared by those who have a commonality, such as the industry they operate in, business structure, or any other factor. These shared characteristics are the ones that allow you to categorize your market into segments that identify the following:

These identifications and others help you to build the foundations for effective marketing and business strategy. By understanding the characteristics of the types of buyers in the market, you will be able to tailor what you offer and how you appear to match what you know appeals to them. This approach affects everything from product development and service delivery to marketing and managing your finances—simply...

A common mistake made by many new market entrants is the use of price as a selling point; with these entrants trying to undercut the competition and then falling into the trap of not being profitable enough to justify the effort, or even making a loss. Sun Tzu, a military strategist whose philosophy is studied by industry leaders, wrote:

Like the generals who win on the battlefield, smart people fully evaluate the field they operate within and identify the position they hold before concluding the type of pricing strategy to use. Understanding the market environment in relation to your own attributes opens opportunities to identify to target your products and services at spaces occupied by little or no competition. Described thoroughly in the book Blue Ocean Strategy, these spaces in the market are opportunities for you to establish yourself...

Quality is a factor that everyone would like, but its delivery is often restricted by skills, time, resources and budget. The definition of quality is something that changes between different groups of people; another reason to identify market segments that share characteristics. Whether the buying criteria is based on money, time or another factor, your ability to be successful with the market segment comes down to whether you are positioned to profitably deliver the quality that its buyers expect.

Whether it is state run, a private sector operation, charity or social enterprise, cash is the blood flow of any organization; without it, the organization cannot function and will cease to exist. In the same way, an organization with no cash flow isn't able to function properly to meet its objectives. Whether you operate purely for profit or to benefit a community, your ability to identify what people want to buy and at what prices will dictate whether you succeed or fail.

Understanding who you intend to sell to will allow you to clearly define what your business is about, who you intend to deal with, what you will offer, and how you plan to be profitable. The key to understanding your market is research, so make sure that you do this thoroughly and make use of reliable information sources.

Even when your research indicates a high demand for what you plan to offer, a clear focus should always be kept on whether your ideas are financially viable. All markets can be separated into multiple segments, categorizing buyers who share common characteristics. In terms of pricing, this often translates to the three general categories of budget, standard, and premium buyers; each needing to be tackled in a unique way to guarantee that your services or products can be delivered in a way that meets their quality expectations and is financially viable. It's important to identify what can be offered for the market segment(s) you target from the start so that you can...