Being your own boss and claiming your business on your taxes is something freelancers and entrepreneurs have in common. But the similarities end there, which is important for freelancers to understand if they want to expand their operation, start a business, and make more money.
The Difference Between a Freelancer and an Entrepreneur
An entrepreneur’s business is an entity separate from himself, which he takes part in. A freelancer is, herself, the business – without her it wouldn’t exist. This distinction is huge. Entrepreneurs can make money while they sleep, take more time off (eventually), and sometimes make a bigger difference in their communities. Let’s look a little closer to see why.
Freelancers work to get paid and get paid only for the work they do. Essentially, they trade time for money. While they can take on a lot of clients to increase their billing, no matter how large their client base, they will always have a cap on their income because there is only so much time in a day.
Now, if you are a top notch freelancer – I mean, you’re really at the top of your niche; you have a big following and an incredible reputation – you can make a whole lot of money and participate in some really amazing projects. But most freelancers are not that lucky.
Most successful freelancers are great at what they do but without the recognition it’s tough to climb to the top. Clients have their pick of many worthy options. You aren’t going to get away with charging huge sums of money unless you are elite. And getting to that level takes a whole lot of skill and a little bit of luck.
So what do you do when you want to move past that barrier? Become an entrepreneur and start a business.
Entrepreneurs offer a service or product beyond what they, themselves, can make. And, as a result, they employ people to do the things they either can’t do themselves or don’t have enough time to do. Rather than offering just web-design, for example, they offer a full-service marketing service which includes web-design, written and visual content, SEO, etc. This is clearly more than one person could handle offering all by themselves.
The products or services that an entrepreneur offers are multifaceted, and are produced by an entity apart from himself. In fact, this product may not depend on the entrepreneur, himself, at all.
An entrepreneur has the ability to make money when he or she isn’t even present – while sleeping or on vacation. A freelancer cannot do this. Freelancers only make money for the products or services they create. If the business makes enough money, the entrepreneur could hire a complete team and quit working if he were so inclined.
The business is something that can be sold (even if no one wants to buy it). Again, a freelancer can only sell her services and not the business itself. People pay for the freelancer’s creations – once the freelancer is gone so are the products and services she provides.
Start a Business and Become an Entrepreneur
So, when is it time to take the leap from freelancer to entrepreneur? Well, you have to be ready both mentally and financially. Becoming an entrepreneur requires money and a team. Starting a business takes planning and strategy. But once you’ve set it up – once it’s rolling – the sky is the limit.
A person needs to prepare for the leap on many levels. They need to make sure that their lives allow for the demands. Do you have the time to devote to this? Do you have the money or can you get it? Do you have the skill set? Are you a risk taker and a leader? Once you’ve determined that you have what it takes, you need to get down to business and start building.
- Make a business plan
- Hire a team
- Market your company
None of these are easy things to do. They take a whole lot of time and strategy. But they are requisite in order to build something that is bigger than yourself. Are you ready for the challenge?