If you’ve decided to turn a skill, hobby, or passion into money,then you’re probably wondering whether you should classify yourself as a freelancer or a business owner.
In today’s gig economy, as remote work becomes more popular, many people are choosing to work as freelancers.
Knowing whether you’re a freelancer or business owner can be important when it comes to creating your business plan and understanding your tax requirements.
So, how does a freelancer differ from a business owner?
Freelancing is about working independently with a selection of clients.
As a freelancer, you are your own boss to some degree, because you can choose who you work with, and decide which projects you take. However, you won’t have total control over your career because you’re still held accountable by clients, who will have deadlines you need to meet.
Freelancers need to create their own income, and there’s no guarantee of any consistent wage. However, you do have the option to set your own prices and manage your own performance.
The best way to describe a freelancer is as someone who trades time for money. If you don’t work, you don’t get paid.
You can do what you love and pursue your interests as a freelancer, but you also don’t have a sustainable or scalablebusiness. Freelancers have no commitment from long-term customers, and they need to be particularly good at finding projects as often as possible if they want to make money.
Freelancers also have the freedom to simply give up on their freelancing career or try something else whenever they choose. There’s nothing holding you into your job if you decide that it’s not for you.
The option is always there to simply stop responding to your clients, or let them know you’re going in a different direction.
A small business owner and a freelancer can seem very similar at first glance. As a business owner,you’ll also need to find clients, customers, and sources of income. You need to build a brand that people feel closely connected to and strengthen your position in your industry over time with marketing and promotion.
However, if you build a business effectively, you should be able to make a long-term income from it. Designing a small business means creating something that’s larger than yourself.
Eventually, a small business owner can keep the company running smoothly without having to be actively involved in the day-to-day operations themselves.
Running a small business usually means you need to hire other people to help keep the company running. Over time, your organization will grow to a point where it can scale and evolve to suit your needs.
Running a business doesn’t mean you aren’t hands-on in the company. The difference is that you spend more time working on the business, than in it. Your job becomes guiding the growth of the business and helping manage your teams.
As a small business owner, you’re usually under a lot more pressure to look after everything and make it all work. If your business fails, it’s not just you who suffers, it’s everyone connected with your company – including any employees you have.
A lot of people who start as freelancers think they have the mindset to become a business owner. However, they soon discover that it’s actually too stressful for them when they jump in. There are two very different styles of work involved here.
So, should you be a freelancer or a small business owner?
There’s no definitive answer to that question. Some people love life as a freelancer and appreciate the sense of freedom it gives them. You do have a lot of control over your career as a freelancer, and you have more flexibility to pursue your passions.
Many who end up starting a small business get their start by freelancing in a field they’re interested in. You can use your freelancing strategy to build the initial capital you need to launch your own company.
However, if you’re searching for something that’s going to make you reliable income long-term, you need to consider small business ownership. Ultimately, a freelancer will always need to work to earn an income. A business owner can guide the direction of a company’s growth and benefit from the profits.