Making the Transition from Freelancer to Entrepreneur

From the outside looking in, running a business and freelancing can appear quite similar. Both freelancers and entrepreneurs can set their own schedule, work from just about anywhere, and decide what projects interest them. From the perspective of someone stuck in the 9 to 5 grind, both a freelancer and an entrepreneur can seem like they’re “living the life.”

But in reality, being a full-time freelancer is quite different from being a full-time entrepreneur. There are subtle boundaries that separate a freelancer from an entrepreneur, and sometimes that line gets blurry.

If you are a freelancer, how do you know if (and when) it’s time to transition to the next step in your career?

Goals and priorities

If your genuine dream in life is to wake up when you want, work from home and have your pick of clients that pay well, being a full-time freelancer might hit the spot. However, it’s also all-too-common for freelancers to wake up one day and realize that the job wasn’t all they thought it would be. Maybe they’re bored to tears, maybe they don’t feel they’re achieving any particular dream, or maybe they’re just sick of running an operation they can’t scale. Ironically, being bogged down with freelance work you don’t enjoy can start to feel eerily similar to the 9 to 5 you thought you escaped.

Freelancing often leads to deeper desires; like the desire to run one’s own business, manage a team or solve a specific problem in the industry. Once given the breathing room to explore the realm of self-employment, some freelancers find that their goals become clearer and their priorities shift. This doesn’t mean that freelancing was a bad choice; it just means it might be time for a transition.

Related: What Do Freelancers Need to Know About Incorporating?

Is it time?

What are some of the red flags that it’s time for a change in your career path?

For one, the projects that used to excite you are now routine and uninspiring. If your portfolio is packed to the brim with similar projects for similar clients, you may feel your creativity is at a standstill. If you started freelancing before truly identifying your niche, you might have uncovered your specific interests through sheer trial and error. With that new information, you can always pivot your freelance operation to focus more on that niche.

But what if the job itself, the day-in-day-out, feels stale and unfulfilling? What if you’ve reached a financial plateau?

If it seems like freelance work is boxing you in, you may have mentally outgrown it. In this case, transitioning to entrepreneurship is worth considering.

Making the transition

Going from freelancer to business owner might seem daunting, but the shift can be much more seamless than it is for non-freelancers jumping right in.

As a freelancer, the bumps and obstacles will come as less of a shock, since you are already accustomed to handling your own scheduling, billing, marketing, clients and taxes.

In this sense, freelancing is the perfect prep school for entrepreneurship. It gives you a taste of the responsibilities and challenges without the financial risk.

However, running a business is still more complex; as it requires a distinct shift in both mindset and self-image.

The key to a successful transition is not getting caught in the gray area between freelancer and entrepreneur. It’s an incredibly easy trap to fall into, and an alluring one, too. The more time spent lingering in the freelancer/aspiring entrepreneur realm, the more likely you are to get discouraged, lose focus and lose money.

Seth Godin talks about this in his article, “The Freelancer and the Entrepreneur”:

“Sometimes freelancers get entrepreneur envy and start hiring other freelancers to work for them. This doesn’t scale. Managing freelancers is different from being a freelancer. Managing freelancers and saving the best projects for yourself gets you into trouble. The cash flow gets you into trouble. Investors don’t want to invest in you because you can’t sell out if you’re a freelancer at heart.”

Ultimately, the goal of the entrepreneur is to scale a sustainable business, and this can’t be done half-heartedly by someone whose mind is still in freelance mode.

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Adjusting to a new role

What tools can help during (or after) this transition to entrepreneurship?

One critical thing for the freelancer-turned-entrepreneur to remember is that their role has in fact changed. You are no longer a freelancer working for yourself. You are now an entrepreneur, and your job is to know your company’s vision, manage the direction of the business and make strategic decisions. Your job is not to be the full-time freelancer in charge of your business.

Again, it’s an incredibly easy trap to fall into. Working in your business feels the same as working on your business, but the difference is monumental when it comes to sustainability.

New business owners can avoid slipping back into old habits by leveraging every tool they can find. Once you begin hiring help, you must learn to leverage the help of other employees, an assistant, or even just digital tools to streamline their workday.

While entrepreneurs are known for wearing many hats, there’s a point at which juggling too many tasks becomes ineffective. An entrepreneur is not a self-hired freelancer; they are a manager.­­­­

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