When starting down the path of business, there can be some confusion, even identity crisis. How do you self-identify now that you are working for yourself, or selling your product or service to a general market? How do you accurately speak about what you do?
In a weekend away with some folks starting up businesses, Seth Godin encouraged these folks to know whether they were a freelancer or entrepreneur. “Knowing which you are is essential to your next steps in business”, said Godin.
To sum it up, freelancers and entrepreneurs must functions differently and in various capacities in their respective ventures. To mix up what you are doing will not only confuse you, but also confuse your customers.
Freelancer: Service Around What You Yourself Can Offer
The best way to test the waters of a new business is to freelance a bit. Freelancing is all you, that is, you are the one responsible for everything and making things happen. You business is tied directly to your skills and your ability to deliver on your promised service.
Freelancing is typically only based around services, not products. You provide this service at an hourly or project rate (though, in this case, you are still the one putting in the hours on the project, so it is an hourly rate of what you think a project might cost you).
It is easy to see that freelancing is highly personal as well. When your clients give you feedback, they are talking ti you about your work. In this sense, freelance work is not scalable, and is typically not based around products (though the services you offer can be productized).
Entrepreneur: Scalable Product or Service
You enter the realm of entrepreneurship when you are dealing with a product or service of which you can be scaled out. The product or service you provide does not require you to do the work all the time, and indeed, others can and should be brought in to do that work.
It is at this point in which you business moves beyond being dependent on the time you can put in it and begins to work past your available hours. This is a good thing, indeed, it is the reason you have a business at all. You are beginning to have a business which works without you controlling everything.
You can bring in others to do the work you were doing. Ideally, they should be able to do the work better than you can. Michael Gerber talks about this process in his book “The E-Myth” (Revisited), and actually encourages entrepreneurs to grow their business in a way it can be “franchised”. This is to say that systems are created and can be handed off to other people with the proper skills set to do the job well.
This is how businesses grow.
So, what are you, a freelancer or entrepreneur.
Please note: one is NOT better than the other!
However, it is essential to know whether you are a freelancer or entrepreneur in order to function properly in your business.
Photo Credit: Adam Glanzman