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?

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

Freelancer Traits

Hello and welcome to FYI.

This week, we follow up our last post with a look at the personal traits that determine if you can succeed as a freelancer. So let’s start with the two major differences between freelancing and full-time employment.

The first is that most full-time employees are entitled to payments such as medical, contributory pension, paid leave, and holiday travel in addition to an annual salary. These are generally referred to as benefits and perks. Freelancers by the nature of their jobs do not enjoy these benefits. They therefore work a lot harder to earn enough to cover these costs.

The second major difference is in what is referred to as security. Full-time employees enjoy financial security based on a cyclical salary or wage (usually monthly) which means that they are sure of what is accruable at any time and can plan accordingly. They also enjoy what is termed job security. This is based on the assumption that once employed you will continue to be until retirement. Financial and job security are also beneficial because they allow access to yet-to-be-earned income through loans; especially mortgages. Freelancers on the other hand are only entitled to payments for specific work done during the period covered and have to be on a continuous lookout for opportunities to earn. They however enjoy the possibilities of flexible working hours and simultaneous income streams from multiple clients as opposed to a single employer.

So how do you know if freelancing or full-time employment will suit you better? The answer lies in personal convictions. But basically, if your answers to these questions are yes, you might make a good freelancer.

  • Are you a self-starter?
  • Can you prioritize and multi-task? 
  • Do you know your self-worth?
  • Can you brand and continuously recreate yourself?
  • Are you good with money?
  • Do you have patience?

Self-starters motivate themselves to work and need minimal input from superiors or colleagues. Multi-tasking means you can complete several things over a short period by determining the right sequence of steps based on scales of importance. Knowing your self-worth means understanding the value of your work and not being scared to negotiate or charge fees that are commensurate with your skill set. Branding means the ability to gain the attention of prospective clients by improving your skills and showcasing them progressively over time. Being good with money means the ability to plan and track expenses as well as save a part of your earnings. Patience refers to the ability to not give up easily, the willingness to continue learning, and to accept lots of changes. These traits while essential to everyday life are even more so for freelancers because they are their bosses, brand managers, and financial planners. So if you find them strange, you might be better off settling for a regular job.

But here’s the thing. The employment rate in Nigeria is on a decline relative to population growth. The changing global economy and the need to reduce running costs means big companies are rapidly switching to part-time or contract hires that have specific (sometimes renewable) engagement periods with no benefits attached. It’s why Nigerian Banks and Telecom companies continue to retrench and modify job requirements. It’s also why outsourced roles are replacing traditional full-time employees within the Civil Service in areas such as cleaning, waste disposal, and recruitment. This trend is likely to continue for the foreseeable future. It means opportunities for regular employment will be even harder to come by.

So think about it, if the major differences between freelancing and full-time employment lie in benefits and security, and the global economy is gradually taking them away, shouldn’t you be paying attention?

Before we sign off, here are Katy Cowan’s 8 reasons to go freelance and Amber Weinberg’s 12 reasons not to.

Now it’s your turn. What are your thoughts on freelancing, part-time/contract jobs, and full-time employment?

Editor’s Note: A version of this article first appeared in The Business Hub on 25th June 2014.

Freelancing

Hello and welcome to FYI.

This week, we touch on a potential solution to the spiraling unemployment issue.

A freelancer is anyone who offers services to clients without being committed to an employer. Initially, these workers were mostly found in writing, design, or marketing. But with the increasingly borderless internet world, it has evolved to cover almost every field; including education, music, photojournalism, web development, consulting, and event management. Together with outsourcing, it’s revolutionizing the way we work. It’s why American families have Math tutors for their kids in Bangladesh, and a Nigerian music video shot in Ajegunle is edited in an isolated room in Johannesburg.

Formerly a self-employed discipline, freelancing has in recent times also evolved to include part-time roles that do not compete with services offered by your full-term employer. A typical example is a Pharmacist who edits articles or designs websites, and a female Banker who bakes for special events (She left the Bank a month ago). Moreover, dynamic trends in freelance marketplaces are allowing clients to meet freelancers online through sign-up sites.

So think of any person with a set of skills that are in demand and you have a potential freelancer; Architects, Engineers, Pharmacists, Lawyers, Literature and Linguistics Graduates, Social and Political Scientists, etc. All that’s necessary is the right attitude and a little bit of luck.

Now that you have a basic understanding of what a freelancer does, here’s an excellent article I found from Forbes’ Deborah L. Jacobs just before posting this. It’s about “The Secret of Successful Freelancing” and there are two interesting takeaways.

“As a Freelancer, I viewed the work world as a series of opportunities – a philosophy that few job hunters share” and,

“There are few things more valuable than being at the right place at the right time”.

Most important is her continuous mention of learning opportunities and valuable new contacts, which takes us to this interesting networking conversation.

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P.P.S. Oh, and notice how we keep including links? It is because reading is a shared quality of some of the most successful business leaders. So please share all the interesting articles you come across.

Right! That’s it then. Till next Wednesday, remember to say hello to the next stranger you meet. It might be the key to an amazing networking story.

Have you been going about the job hunt wrongly? Or are you a freelancer? What freelancing stories or difficulties would you like to share with us?

Editor’s Note: A version of this article first appeared in The Business Hub on 11th June 2014.