Are you an Entrepreneur or a Freelancer?

Hello and welcome to FYI.

This week’s post was inspired by a recent conversation with a friend. She had read the last two articles and was sharing her thoughts when suddenly she paused. She then asked, “So are you an entrepreneur or a freelancer?”

For starters, it’s a valid question and one most people haven’t given thought to. Reasons range from similarities such as working for self to “differences” such as having employees, team leadership, multiple sources of income, and being a registered entity. But even these are more simplistic than universal.

In our world, freelancers work in teams and have central figures that lead those teams. And those that aren’t part of teams, own registered entities with employees that perform selected tasks. An example of the former can be found at any Tailors’ shop, while my Architect friend who has a Secretary, Driver, and Personal Assistant represents the latter. Furthermore, a single freelancer can also offer services across different areas, which in essence translates to multiple sources of income. So those perceived differences are slowly becoming similarities.

But wait! Shouldn’t the fact that the Architect is self-employed and a business owner make him an Entrepreneur? His business is registered with the Corporate Affairs Commission.

This brings us to the fact that freelancing is the easiest way to start a business. But not all freelancers outgrow that phase. And while some entrepreneurs started as freelancers to save costs, others didn’t. They discovered brilliant ideas, raised capital, and built successful businesses without being integral parts of the daily process.

So again, being a self-employed, business owner doesn’t make you an entrepreneur. The truth is that people who make a living from their personal “hustle” interchangeably use the terms self-employed, business owner, freelancer, and entrepreneur. Interesting right?

Here’s our take.

Freelancers sell their skills and expertise. They may have a registered business name and address, and a few employees to boot but what generates income remains their input. If their services are required, those of their employees will not suffice. Growth in this field depends on more clients, greater work hours, and an increase in fees charged. It therefore means that networking and referrals are paramount to the success of freelancers.

Entrepreneurs on the other hand may or may not have the skills required. They instead have a grand vision and are willing to assemble a team and build a business to achieve it. Growth in this field depends on achieving scale through investors, more employees, new outlets, and distribution chains. Entrepreneurs therefore earn even when asleep and usually have exit strategies.

So there you go. Hopefully, with these guides, you can identify freelancers who call themselves entrepreneurs and those who combine both. Do remember that some freelancers grow to become entrepreneurs and cut the rest of us some slack. Oh and here are the posts that started this freelancing and freelancer traits.  

Now it’s your turn. Have you given this any thought or did you assume the differences were clear? Are you an entrepreneur or a freelancer?

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Editor’s Note: A version of this article first appeared in The Business Hub on 8^th July 2014.