I was at an entrepreneur seminar on campus last month, and Director Bill Howe was talking about how he owns an auto dealer consulting business. He went on to say that he helps auto dealers improve customer service and marketing. His business had a name, a logo, business card, and he was listed as President. The problem was that he was the only employee, and instead of owning a business, he was merely a freelance consultant.
Often entrepreneurs are confused with owning a business, and being your own boss. The distinction is subtle, but actually quite noticeable once discussed. If someone is a freelancer, they choose their own jobs, market themselves, and work with clients directly. Essentially, a freelancer is similar to a service employee at a large firm, but standalone and instead of working for that company, instead works directly for clients. Web designers often are the lone employees are their small businesses, yet consider “owning the business”, which upon closer examination is not true. I myself am guilty of such mistake, and after discussing the differences with my father, realized that I was instead a freelance web designer, and not an entrepreneur.
In my scenario, I would own my web design business if I had a salesperson who marketed PixelTorch, worked with clients, and managed the programmers; a programmer; and a designer. The business could run on autopilot, and I would essentially oversee the operations and make adjustments. Instead at PixelTorch, I am the designer and the salesperson, which instead of makes me a freelance web designer, as opposed to a business owner.
Do you guys think a freelancer is considered an entrepreneur (a person who undertakes and operates a new enterprise or venture and assumes some accountability for the inherent risk)?
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I agree completely, Ryan. I’ve been a freelancer for years, but also an entrepreneur by your definition and there definitely are differences. If you can run as a freelancer and eventually sell your company, then sure, you’re an entrepreneur too. But you’re right in that there are subtle differences and many freelancers get confused when they market themselves. Many times we try to look bigger than we are, which just simply becomes lying. It’s unfortunate, but it happens.
However, when you really want to talk about semantics, a freelancer is still an entrepreneur as they are taking on the entire risk of the company. It’s still a company, even if it’s one person running it. I think what you’re getting at is the difference between a big business mindset and a small business mindset (reference: Rich Dad, Poor Dad). The person with the big business mindset will think of how to automate their way out of a job, thus creating new jobs for each role you play or hat you wear. The person with the small business mindset believes they are the best person for each job or each hat. They can’t give up control. They are also known as the “technician”, which is what creates the demand for the product or service in the first place (their quality, speed, price or whatever). But in the end, if the person who starts the company (the freelancer) can’t systematize the roles they play, they’ll never work themselves out of being the technician and into a big(ger), automated, business. They’ll die as the technician, working one hour for those dollars. They’re not creating an enterprise. They just create their own job.