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What’s The Difference Between Freelancer and Small Business Owner Roles?

Small business owner

Freelancer vs. small business owner. You might think they are one in the same. In fact, there is a big difference between freelancer and small business owner goals, responsibilities, and risks.

Want to go out on your own, but not sure if you should freelance or start building a small business? Start off by asking yourself the following questions:

  • Do I want to hire employees, or just work alone?
  • If my business grows quickly, would that be a good thing? Or am I willing to turn away opportunities and grow at my own pace?
  • Am I prepared to deal with the complicated paperwork, legal filings, and financial loopholes that come with running a business, or would I rather leave these aside and focus on delivering quality work to my clients?

The Difference Between Freelancer and Small Business Owner Responsibilities

A freelancer works solo as a contractor for clients that pay her by the hour or by the project. A freelancer’s goal is to fill only her own available time, securing jobs that pay well and are a dependable source of work. In many cases, freelancers don’t need a business license or any formal registration with the government to operate.

A small business owner might start out working alone, but wants to (eventually) hire employees so she can build her business into something larger than herself that brings in stable and constantly growing profits. Small business owners focus less on the actual delivery of products and services (that’s up to employees) and more on running and growing the business. Small business owners need to deal with taxes, regulations, and employee issues along the way.

Financing a small business is also a challenge when starting out, while freelancers usually operate with very low overhead.

The Pros and Cons of Being a Freelancer

Freelancing gives you a great amount of freedom over the type of work you do and when you do it. Having a flexible schedule is great for people with young families or a family member who needs special care … or people who just prefer to go to the grocery store at off-peak times! Freelancers can control their workload depending on what they might have going on personally. For example, if you have school-age children, you might pass on a summer project to enjoy afternoons at the pool with your kids.

Freelance work can be unpredictable, though. As a contractor, freelancers sometimes have little to no warning of a client ending an engagement. And it’s difficult to market your services when you are in the thick of other projects, which can lead to gaps in your work schedule. Working freelance can also limit your ability to grow you income, since there are only so many hours in a day that one person can work.

Pros and Cons of Being a Small Business Owner

Being a small business owner gives you unlimited potential – You can grow it to whatever levels you desire, or sell it when it reaches a certain point. With proper planning and foresight, you can raise the business to operate and scale without you.

However, owning a small business is like having a baby, it’s a never-ending job that doesn’t conform to business hours or vacation schedules. Problems pop up when you least expect, and it will test your limits in ways you never imagined. But, as with children, when you’ve successfully raised the business to maturity, you’ll feel immense pride.

Freelancing and owning a small business both require an entrepreneurial spirit and a desire for freedom. Deciding which is the best for you, personally, requires weighing your ultimate goals and the risks involved.


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