Tips for making a financial plan as a freelancer

Reinhardt Haverans
27 February 2020

When you start out as a freelancer , chances are you're starting a sole proprietorship. If you are, making a financial plan is not an obligation, but it will greatly help you gain insights into your financial situation today and how to get where you want to be. Here, you'll learn:

  1. Why making a financial plan is important
  2. Essential parts of your financial plan
  3. How to start drafting
Before making a financial plan, lay the groundwork by making a business plan .
Making a financial plan as a freelancer

1. Why making a financial plan is important

When you start a company in Belgium, you will need to prove its projected profitability, show how much money you invested yourself, why you needed loans, how you plan on paying them back and much more. Chances are, if you've been a freelancer for a while, you've already had to do this.

When you're starting out as a freelancer, you'll most likely opt for the company form  of sole proprietor. If you do, nobody will expect a detailed financial plan from you. But that doesn't mean you shouldn't make one for yourself.

Making a financial plan as a freelancer grants insights into the near future and highlights opportunities to grow on the long term. Dig deep and present to yourself a financial plan like you would to a bank, an investor or your accountant to make sure you don't miss anything.

2. Essential parts of your financial plan

Every financial plan consists of several segments to make sure you have everything covered. Belgian accounting considers single-entry bookings for sole proprietors, while requiring double-entry bookings for companies. If you're the first, making a financial plan will be easier than you thought.

These are the segments you'll need to describe:

  1. Investments
  2. Costs
  3. Financing
  4. Margins
  5. Point of break-even
  6. Viability

Essential parts of your financial plan

1. Investments

What are investments?

Investments are large sums of money or more expensive products you buy to facilitate you doing your job. Contrary to costs, investments are singular injections of capital or goods.

When you invest in goods, you get a tax write-off over several years. That means the government will refund you a set amount of taxes over a number of years that is believed to be a realistic lifespan for the product you bought.

For instance, you buy a laptop for € 3000. The lifespan of your laptop is estimated to be 3 years before you need to buy a new one. You will receive a yearly tax refund of 33.3% of the taxes you paid on that laptop over the next 3 years, totalling the full refund you are entitled to at the end of that term.


What types of investments are there?

When you start, you can invest in 2 ways:

  • Financial investments
  • In nature

Financial investments are funds from your private equity that you put into your business. It starts you off in case you have to buy certain items, products, services and more to facilitate you running your business.

The second type, investments in nature, are when you invest goods you already owned as a private person into your business.

For instance, programmers are likely to already own a heavy-duty laptop with all necessary requirements for them to properly do their jobs. There's no need to buy a different laptop, but you can get a tax return on the remainder of the estimated time your laptop has 'to live' as explained earlier.

2. Costs

Costs are recurring or smaller necessary expenses you make to successfully run your business. Monthly or yearly software subscriptions, ergonomic aids, restaurants visits with prospective clients: any money you spend to facilitate your business can be put into your books as a cost.

These professional costs lower your net taxable income, meaning that making relevant costs end up saving you on taxes. Please mind that your costs are always relevant for your business. You might end up getting a tax return, but you are still spending money.

Make sure to always keep proof of all costs you make. Only VAT-receipts will be counted as a legitimate cost. If you can't prove it, it will be thrown out and it won't be returned come tax season.

3. Financing

Financing is when you get money from third parties. Traditionally those parties were investors, banks or the government, but these days modern alternatives like crowdfunding are also considered financing.

This part of your plan will help the people providing you with financing understand what you're going to do with the money, what kind of return you're expecting and when they will get their investment back.

Chances are high that when you need financing, making a financial plan will be necessary to convince possible financers.

 Notebook with crowdfunding sign on a table. Business concept.

4. Margins

As a freelancer, you probably offer multiple services instead of always doing the same thing. An IT'er, for instance, could choose to offer the following services:

  • Programming
  • Coding
  • Network management

That means when they're making a financial plan, they need to stipulate how much of their income will come from which service. They will add to their financial plan, without VAT, the price per unit per service, the total percentage of the gross profits per unit, and the total percentage of all performance the service will account for.

5. Point of break-even

Once you know how much costs you will make in a year and how much you project on earning with your different services, you can calculate how much you need to earn to break even. This is not the goals you're shooting for, but it is important to know beforehand after how much income you start to turn a profit.

Point of break-even = costs/gross profit margin

6. Viability study

The study of how viable your business plan is really comes down to how realistic your projected income is based on the current market and your position in it.

This is where making your financial plan meets making your business plan .

After finding out what the market looks like, who and where your audience is and how it all relates to your offer, does it hold up? Do you expect your business to turn a profit? Will people want what you have? Answering these questions will tell you how viable your business plan and financial plan are.

This is where making your financial plan meets making your business plan

3. How to start drafting

Drafting a financial plan can be daunting to begin with, even knowing what you know now. Start by looking for a template you see yourself working with, for instance in the templates that Office provides. It will start you off with a great foundation to build upon.

First, you fill in everything you can that you are sure of. Next, it's always a good idea to ask an accountant or someone you trust for input about your financial plan. They may find errors in logic from navigating the often complex Belgian laws for entrepreneurs.


Flanders Innovation and Entrepreneurship offers guidance to both native and foreign entrepreneurs looking to navigate the ins and outs of self-employment in Belgium. They will help you find your way and offer a great deal of resources concerning making a financial plan and a business plan.

Looking for more information about making a financial plan as a freelancer? Need more guidance in starting your own business? Contact our experts for personal support or check out our dedicated blog.

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