The difference between an entrepreneur and a freelancer

The difference between an entrepreneur and a freelancer

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During my studies I started to work as a freelancer. I didn’t study for web-development and webdesign, but somehow I rolled into it. First I worked via an employment agency, later I decided that it was time to determine my own hourly wage. I know freelance life from the inside out, and along the way I came to conclude that being a freelancer is something way different than being an entrepreneur.

Freelance life

Freelancing is an essential step in the entrepreneurial journey. You have to learn how to find clients, talk to them and get them to pay you. You have to learn how to develop skills and ideas and test them in the marketplace. Because you have to be present in all kinds of areas, you’re literally a jack of all trades.

And freelancing is great, because for all intents and purposes, you can get started immediately.

Once I went to Morocco with my boyfriend and traveled the country for one month while working part-time. I used some hours out of the morning to work on the project, while I was sitting on the terrace of our Kasbah watching the city to awake.

Freelancing is a great way to leave the 9-5, and to experience a great sense of freedom. It can learn you many things outside traditional work life. If you do that in a creative and smart way, you can earn way more money than what you would get in a traditional job.

But it can also be challenging. The truth is that almost anything can make money if you want, but attracting the right clients, getting found, developing a sense of the kind of projects you want work on, negotiating for a fair salary, etc, etc, is a whole other playing field. In the blog Getting paid and being recognized as a capable freelancer, I write more about this two-sided problem for both clients as freelancers.

The way both spend their time

What I basically did while working as a freelancer is exchanging my time for money. Freelancers are compensated by the hours that they work, and so I did too. I got paid when I worked and when I would take myself out of the equation, the business wouldn’t work anymore.

As this is the case for freelancers, entrepreneurs do things differently. They focus on growth, use money (from others) to scale up systems, automation and, eventually, employees that work without their direct involvement. They create things that are bigger than themselves and let others do the work that’s needed on daily basis.

That’s not to say that they’re not hands-on when it comes to certain tasks, it means that they have a team behind them to help lessen the workload so that they can focus on building their business. So basically entrepreneurs are in the business of managing others to get the work done.

So the goal of a freelancer is to have a steady job with no boss, to do great work, to gradually increase demand so that the hourly wage goes up and the quality of gigs goes up too. Therefore, the goal of the entrepreneur is to sell out for a lot of money, or to build a long-term profit machine that is steady, stable and not particularly risky to run. In short, the way both spend their time are different from one another.

Generalist or specialist?

I would say that entrepreneurship is about finding a gap into the market, rather than a gap in a project. A freelancer is compensated for his skills and fills up the gap with those skills. The freelancer brings the project to completion and that helps further bring the product to completion.

Therefore, freelancers support entrepreneurs in their attempts to fix the bigger issues of the market. It’s about becoming remarkable in your work, whereas entrepreneurs wear different hats. So the end goal of an entrepreneur is more like a generalized mindset over having a specialism.

Freelancer vs Entrepreneur – Don’t mix them up

Sometimes freelancers get entrepreneur envy and start hiring other freelancers to work for them. Although it may sound nice, or even clever to you to manage freelancers and saving the best projects for yourself, it actually can get you into big trouble.

First of all, keeping your cashflows separate from eachother is very important in business. Whether you’re self-employed or an entrepreneur. In both cases it’s important to keep them far away from eachother because it brings a lot of unnecessary financial risk to your workforce.

Secondly, if you’re an entrepreneur, it is impossible to succeed by using your own labor to fill the gaps. That’s because your labor is finite. It doesn’t scale. If you can’t sell out as an entrepreneur because you’re a freelancer at heart, investors don’t want to invest in you. That’s because if it’s a job only you can do, you’re not building a system, you’re just hiring yourself and making the system depends on you. When you stop working, the business wouldn’t thrive anymore.

But the solution for that trap is easy. If you’re a freelancer, hone your craft. Figure out how to do the best work in your field, learn to say no, build on your reputation and how to do the best work for the right clients. If you’re an entrepreneur, make sure that you build a business (whether big or small) that’s steady and works when you’re away.

Conclusion

So whatever you decide to do, don’t mix them up. The difference between an entrepreneur and a freelancer is simple. Freelancers work hard for their money, and entrepreneurs work hard to set up systems that make them money.

As long as you don’t mix them up, you’ll never get the problem of being too risky. Whether that is mixing up your cashflows or building a system that doesn’t scale because it depends too much on you.

Whichever of the two you choose, I would say the job should fit with your goals and mindset and how you want to spend your time. Don’t pretend as something that you’re not and make the decision on how you want to serve!

Let me know what you do and how you think freelancing, being a employee or being an entrepreneur serves you well. Use the comment section below!

Interested in more blogs about freelance life? Head over to these articles:

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