Many people who are being employed wish to get out from employment and try other sources of income that can give them a better work-life balance. Some employees want to start their own business or become self-employed to become their own boss. If you’re one of those employees who are trapped in the corporate treadmill, chances are, you’re already eager to escape and change your life.
But before you jump into another world, you have to determine first what kind of new world will be best for you. Is it the world of freelancing or the world of entrepreneurship? Should you be a freelancer or an entrepreneur?
It is important that you know where you are heading to. To help you make the right decision, here are 20 differences between freelancers and entrepreneurs.
|1. Freelancers are freelancers for hire. They are selling their own workforce.||Entrepreneurs are builders of enterprise. They are selling the total workforce of their enterprise.|
|2. They build and promote their professional brands.||They build and promote their business brands.|
|3. They register as a professional practitioner. Freelancers can register their full name without using business trade names.||They register a company, which can be a sole proprietorship, partnership or corporation. They also register their own business trade names.|
|4. They face less complicated government compliance requirements.||They face more complicated government compliance requirements, such as business licensing, reportorial requirements and corporate tax filing.|
|5. They hire an assistant or don’t hire anyone at all other than themselves.||They hire all the necessary employees to operate and grow their organizations.|
|6. They don’t need business partners.||They need business partners and co-founders to form bigger companies.|
|7. They earn professional income.||They earn business income and may also earn compensation income for being an employee of their own corporation.|
|8. They earn based on the hours of their work.||They earn based on the hours of their work plus the profit share from their business.|
|9. As their labor force is lesser, they serve fewer clients than entrepreneurs.||As their labor force is bigger, they serve more clients or customers than freelancers.|
|10. They incur fewer expenses in relation to their practice of profession. Freelancers may work at their home and don’t need to hire employees.||They incur a lot of capital expenditures and business expenses, including office equipment, salaries of employees, office rent, taxes, and licenses.|
|11. They usually gain net income after deducting all their professional expenses from their professional income.||They are susceptible to business losses in their first three years of operation.|
|12. They are less likely to incur debts. Freelancers want more financial freedom and don’t like to take the risk of being trapped in debt.||They are more likely to incur debts because of the bigger financial and capital requirements their businesses need.|
|13. They have more time for their family and loved ones.||Early-stage entrepreneurs almost have no time for their family and loved ones. Highly successful entrepreneurs can already have more time for their family and loved ones.|
|14. They have better work-life balance than early-stage entrepreneurs.||Early-stage entrepreneurs face a lot of hardships and may have an extremely stressful life. They may only achieve work-life balance when their businesses already become successful and sustainable.|
|15. The goal of freelancers is to provide the best services to increase their professional value and demand for higher rate. Freelancers want to earn the most money by spending the least of their time.||The goal of entrepreneurs is to make their businesses achieve optimal growth by utilizing all the resources and opportunities available.|
|16. Freelancers are more likely to be their own boss than entrepreneurs since the first only serve few people.||Entrepreneurs have to deal with more stakeholders, including customers, employees and business partners.|
|17. They can work anywhere.||Early-stage entrepreneurs have to work closer to their team or employees in order to manage the business better.|
|18. Freelancers want to live a simple, happy and less stressful life.||Entrepreneurs have bigger dreams and ambitions in life. They will take any risk just to achieve their dreams even if it means sacrificing their own happiness and freedom.|
|19. Successful freelancers can earn stable income, which is more enough to cover a good lifestyle.||Successful entrepreneurs can earn limitless income than successful freelancers. Their employees and partners also grow with them.|
|20. Unsuccessful freelancers can easily stop freelancing.||For unsuccessful entrepreneurs, closing a business or company is a tedious process. Quitting entrepreneurship may not be an option once you get there. There's no turning back for most entrepreneurs.|
Entrepreneurship is not an easy task. It’s harder than employment since you will be dealing with employees, a lot of customers, business partners, and even the government. However, if you succeed in entrepreneurship, the reward can be greater than the rewards of employment and freelancing.
If you want to live a simple and happy life, then freelancing might be your best choice. If you are highly ambitious and a risk taker, then entrepreneurship might just be the right one for you.
Whatever your choice is, it doesn’t really matter. What matters is that you can stand and fight for your choice until you achieve ultimate success, whether as a successful employee, freelancer, or an entrepreneur.
To be a successful freelancer, you have to act as a true freelancer, not a businessman or an entrepreneur who exhausts or utilizes all available resources to maximize profit. To be a successful entrepreneur, you have to act as a true entrepreneur, not a freelancer who works more independently and relaxingly.