Despite what some people might think, there’s a huge difference between freelancing vs. entrepreneurship. Even though they have a few similarities, there are major differences to consider before diving in to one or the other.
Both freelancers and entrepreneurs have an independent spirit. They don’t want to work a 9-5 job, tied down to a desk all day long. They’d rather be able to work where they want, when they want.
Marketing and sales are two of the most important skills for entrepreneurs and freelancers to master. Because a constant stream of clients is necessary for growth, there must be a daily emphasis on reaching out to new audiences and attracting new clients.
Tax laws allow both freelancers and entrepreneurs to deduct certain things from their taxes. Office equipment, utilities, and office space, and even educational material can be deducted to help save on the tax bill.
Finally, both freelancers and entrepreneurs are in charge of their own prices. Even though prices are dependent on what the market is willing to pay, the freelancer or entrepreneur can always shift into a different market if they want to demand higher prices for their work.
The biggest difference between entrepreneurship and freelancing is the end goal. Freelancers are typically short-term minded. Even if they get paid fairly well, they’re essentially trading time for money. Entrepreneurs are more focused on the long-term. They won’t make money immediately like freelancers will, but they will develop sales systems that allow them to separate income from time.
This usually stems from a difference in motivation. A freelancer may be just trying to make ends-meet, pay off debts quickly or just have some extra spending cash. An entrepreneur wants financial freedom so they can pursue their dreams, whether that’s philanthropy or just having nice stuff!
Freelancers tend to get very good at just a few skills. If they can master their craft, copywriting and marketing, they can do very well for themselves. There is no need for them to learn many different things, because all they really need to do is what they get paid for.
Entrepreneurs don’t have that luxury. They need to learn more different things, although they don’t necessarily have to master them. For example, a business owner should know at least the basics of accounting, marketing, sales, copywriting, etc. Having a basic understanding of these skills allows the business owner to communicate with his employees and team better.
Leadership is another major difference. A freelancer typically doesn’t need to bother with learning about managing or leading people. They only have to worry about themselves, which can be very liberating.
A business owner must learn both management and leadership if they want their business to consistently grow. Hiring employees is a necessity, but those employees can be either full-time or freelancers.
Finally, entrepreneurship tends to take more emotional fortitude than becoming a freelancer. The lack of consistent cash flow is not easy to deal with, but is something that most business owners must learn to manage for weeks or even months!
Which is Best?
To be honest, the best option for you just depends on your current goals. If you need money NOW, become a freelancer. But if you have cash flow and can wait a few months before making money, starting a business may be your best option.