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Freelancer, Consultant, or Entrepreneur: Whatâ€™s the Difference?
All too often we bandy around the words freelancer, consultant, and entrepreneur as if they are interchangeable, although they are not. Sometimes our clients are confused. Often we are, too. When we aren’t clear about how we offer our products and services, it makes it difficult for potential clients to know whether or not to hire us. This article describes the differences between freelancer, consultant, and entrepreneur.
Remember the poor little bird in P. D. Eastman's much beloved children's book Are You My Mother? The one who hatches from his egg while his mother is out scratching around for food and can't figure out who he is? By the middle of the story, this confused hatchling is in the midst of a full-blown identity crisis, wandering around asking everyone, "Are you my mother?" That's how it is in the business world. We bandy around the words freelancer, consultant, and entrepreneur as if they are interchangeable, although they are not. Sometimes our clients are confused. Often we are, too. When we aren't clear about how we offer our products and services, it makes it difficult for potential clients to know whether or not to hire us. What's the difference? According to the Merriam-Webster Dictionary: a freelancer is "a person who acts independently without being affiliated with or organized by an organization; who pursues a profession without a long-term commitment to any one employer." A consultant, on the other hand, is "one who gives professional advice or services as an expert." In a completely different category is the entrepreneur who "organizes, manages, and assumes the risk of a business or enterprise." Freelance vs. Consultant Technically, there isn't much of a difference between being a consultant and being a freelancer. Both are independent contractors working for multiple clients. They are their own bosses. The main difference between the two is that one gives professional or expert advice and the other offers a deliverable. Freelancers Freelancers offer a deliverable--something concrete and tangible. Deliverables can include writing an article for a newspaper or magazine, designing a web site for a client, or painting a commissioned artwork for a building opening. Freelancers get in, do the job, and get out. Often enjoying a variety of assignments while working from home, they earn their living by contracting for work on a project-by-project basis. At the end of the year, they have plenty of 1099s to show for it. Fields where freelancing is especially common include journalism, writing, copywriting, computer programming, software development, graphic design, film production, landscaping, architecture, translation, fine art, music, and acting. Consultants Consultants give professional or expert advice, generally to management. They may come in and evaluate how a company can streamline their production efforts or render a professional opinion on an accounting audit. They give their advice and opinion so that others can make informed decisions, select the best course of action, or accurately forecast an outcome. Consultants, like freelancers, enjoy a wide variety of projects and earn their living by contracting for projects on a project-by-project basis. Unlike freelancers, most of their work is done outside of the home. At the end of the year, in addition to 1099s, they may also have some W2s to show for their work. Fields where consultants are especially common include financial planning, strategic planning, marketing, research, training, business planning, business review, computing, integration of new technology, medicine, psychology, and law. Entrepreneur vs. Freelancer and Consultant Freelancers and Consultants Freelancers and consultants sell themselves. Though they may have a few employees working for them, their focus is on getting a job done rather than running a business. What drives freelancers and consultants is the pleasure and satisfaction of working for themselves, setting their own hours, and deciding what projects they will or won't take on. They don't like to take too much risk. Entrepreneurs Entrepreneurs, on the other hand, sell their business. They focus on building something big, lasting, and profitable. They enjoy taking calculated risks and manifest their vision in the form of a business. For them, it's all about making it big and leaving behind a legacy. Some famous entrepreneurs include: Bill Gates, Donald Trump, Martha Stewart, Oprah Winfrey, Hugh Hefner, Michael Dell, Mary Kay Ash, Debbi Fields, and Anita Roddick (founder of The Body Shop). Freelancers and Consultants as Business Owners Freelancers and consultants may decide to start up a small freelance or consultant business, although they have no interest in overseeing or operating a large company. They like putting themselves out there--just not too much. Freelancers and consultants are their product or service. Without themselves, their business is not sustainable. Entrepreneurs as Business Owners Entrepreneurs, on the other hand, are all about their business. Though they may start out small with only a few employees, it is just a matter of time before their small business expands. The very nature of an entrepreneur is to take risks, think big, and grow. Often, venture capitalists and other investors are involved. An entrepreneur's business is sustainable and can survive after they are gone. Conclusion Knowing the distinctions between the three very different categories is just the beginning. At the end of the day, it's all up to you to determine how you label yourself. Whether you're a freelancer, consultant, or entrepreneur, it's up to you to decide for yourself the kind of success you want.