If you’re sick of the 9 to 5–which, let’s be honest, is more like the 7 to 7 with modern commute times–or just want to strike out on your own, chances are you are currently considering your options. And, yes indeed, how many options lay before you.
So, what’s the difference between being a freelancer and starting your own business in 2020? Which one would be more beneficial to you?
The thing with freelancing is the ability to take up small amounts of work even alongside a regular job. So you don’t necessarily have to quit your day job. Which, for some, can be the ideal scenario. It means that you have the security of a regular income, but you can also then supplement it month on month with some freelancing money.
However, many people then go on to make this their full-time occupation. Upgrading from the odd-jobs alongside their normal jobs, to then fill out their weeks with different freelancing work and contracts. When you become a full-time freelancer, you may exclusively work from home or a small community-managed space (if you prefer to work outside of the house).
For many, this is the ideal scenario. As you are still working for yourself, but you lack the strict regime of a full-time job and do not have the restrictions/requirements needed to start a full-time business.
Starting a small business can often feel like a much bigger commitment than freelancing. For one, you have to set it up legally with a business name, tax number, business rates, etc. If you’re just starting out, then this can seem daunting and a little bit too expensive for you to manage. Whereas, if you have been operating on a small-time basis for a while this can seem like the perfect way to ‘scale-up’ your current structure.
Of course, the major difference between being a freelancer and a business owner is fairly simple: branding. As a freelancer, you want people to trust you. As a business, you need people to trust your brand. So a lot more time needs to be focussed on branding, the way you sell your product and the overall growth plan that you have in place. Only then can you actively and securely begin to grow your business in a healthy and sustainable way.
At this point, being a business owner is much more overarching than simply being a freelancer. You may hire employees, rent a business space or even outsource some of the work in order to meet demands. The fact of the matter is that you will need to focus on the sales pipeline and closing said sales, as there will be much more to pay for in your business structure that needs accounting for.
In a lot of ways, being a freelancer and a small business owner does tend to overlap to a large degree. You have the same responsibilities, gathering clients and providing the income for the enterprise, whereas the way you go about this can be very different.
As a freelancer and a business owner, you are forced to learn how to grow your income into a sustainable business. In many cases, these are quite similar tactics. If you can learn to make money as a freelancer, then there is no reason you cannot do the same as a business too. You will be setting your goals on a slightly different scale (weeks vs. months). Pitching for freelance clients also ends up similar to pitching your business to clients, so it’s a similar build-up of skills.
Me vs. We
One of the biggest factors involved in being a business vs. a freelancer is the attitude that you need to adopt. As a freelancer, you will no doubt work on a feast and famine ratio. Some months will be really good vs. others that will see very little work coming your way. Being savvy with your money to support yourself through these periods is important, as it can ensure you don’t end up falling apart during the ‘famine’ period.
Whereas, as a business, it will be much more integral to secure long-term contracts–set up with the help of corporate solicitors–which can support your business. As without a steady stream of income every month, things can quickly fall apart.
At the end of the day, starting as a freelancer vs. a small business in 2020 is partly down to personal preference, but also what is available to you. The fact of the matter is that in some cases you will have the budget to support a small business. And, if not, starting as a freelancer is a great way to build those funds over time.
Whether or not you want to start a business or simply dip your toes in the freelancing waters, it’s important to plan out your next steps. As the more, you plan the clearer your choice will become.