Solopreneurs vs. freelancers? What are the key differences between the two, and should it matter what you call yourself when youâre the lone hand in your âbusinessâ? In simple terms, a freelancer sees himself as an outsource worker who does assignments and projects for others (clients). The solopreneur sees himself more as a business owner and likes to create and sell his own products instead of doing jobs for others, to their requirements. These days the lines are blurring between solopreneurs and entrepreneurs. Many a freelancer, when asked, would probably say his next step of growth is to become a solopreneur.
- Freelancers see themselves more as professionals than business owners
- Solopreneurs see themselves more as one-person teams running businesses
- Freelancers succeed best when their own names become their brand names
- Solopreneurs can work under their own names or choose business names
- Freelancers generally do contract work for clients with requirements
- Solopreneurs sell their own product creations besides working for others
- Freelancers can earn only by trading time and not from passive income
- Solopreneurs have room for passive income from selling their products
- Freelancing can be done easily as a side-gig along with a 9-5 job
- Solopreneurship is hard to do as a side-gig (though some are successful)
- Freelancing could be a first step out of a 9-5 job into independent work
- Solopreneurship could be the eventual aim of many growing freelancers
- Freelancers, as job workers, have to be tactical in their perspectives
- Solopreneurs, as business owners, need to take a strategic long-term vision
- Freelancers can grow by upskilling in their specific areas of expertise
- Solopreneurs can grow by upskilling in the several facets on business
- “Freelancerâ speaks more to what you do and how professional you are
- “Solopreneurâ speaks more to how you do business, your attitude, and why
VIDEO: Mark Copeman talks about how To stay motivated as a solopreneur or a freelancer (Must watch: 7:39 minutes)
In this well-thought-out video, Mark Copeman asks all solopreneurs and freelancers to increase their motivation by thinking about why they do what they do. He also suggests having a balance sheet. Even when you see slow results in business, you can notice and add the increments of work you do to your balance sheet. You can feel sure that your every bit of work will produce returns one day soon. The other significant point he emphasizes is that we can all grow faster as solopreneurs and freelancers if we embrace our constraints.
Differences in business ownership
1. Freelancers see themselves more as professionals than business owners
Among the key differences between freelancers and solopreneurs is how they perceive themselves. Freelancers see themselves as talented professionals and not as business owners. If asked to explain what they do, they would probably say, “I am an artist” or “I am a blog writer”. They wouldn’t say, “I have a blog writing services business”.
It could be because of this self-perception â and market-perception â of freelancers as individuals that they often command lower fees than solopreneurs. Technically, a freelancer doing blog writing and a solopreneur owning a blog writing business would be doing the same job. They would be undertaking writing assignments for clients. But somehow, freelancers are seen as “job workers” while solopreneurs, as business owners, are seen as “senior management”. Therefore freelancing fetches a lower rung of fees.
Many freelancers get tempted to showcase themselves as businesses to raise their fee level. They try to become solopreneurs after a while. If they have long suffered low fees, they may think that a change of perception is needed.
Much depends on the type of clients a freelancer may service. Some clients, in some instances, may offer a freelancer a lot of work if the freelancer chooses to project himself as a “diligent cost-efficient worker”. On the other hand, in some other circumstances, clients may want a pricier solopreneur charging for the brand value of his business name. I have seen an example of this situation exactly. A company’s blog was “farmed out to freelancers”, whereas the CEO blog of the same company was “contracted to a solopreneur” with a well-recognized business brand name.
2. Solopreneurs see themselves more as one-person teams running businesses
The self-perception of a solopreneur is different from that of a freelancer. A solopreneur sees himself essentially as a businessperson. The fact that he is also the lone worker in his company doesn’t usually make a jot of difference, so long as he and his clients see that he is the boss of his business.
The minute someone begins to visualize himself as a boss, everything changes for him. He sets higher standards of professionalism for himself because he believes he has a business name to guard. He expects to get customers from the higher economic rungs of his audience. He expects respect from clients and is willing to return the same. In short, he becomes conscious of being a person in power.
In business, confidence is nine-tenths of the game. So how you position yourself â as a freelance worker or a solopreneur business-owner â makes a great deal of difference to your self-confidence and demeanor. This attitude then projects itself outward and touches everybody who comes across you. The body language of a solopreneur, if you’ve noticed, can be a lot different from that of a freelancer.
Why only body language, even spoken language can be different when confidence is at the root of a person’s psyche. For example, a freelancer who has delivered a project late to his client may say, “I am sorry, Sir, I’ll make it up to you in the next phase of this project.” A solopreneur with more powerful self-perception would probably explain away the delay in words like these: “Regrettably, this delivery has overshot its deadline, but I am sure we can fix the cause to make the next phase of delivery earlier than expected.” Notice the crucial difference between using the word “I” versus the term ‘we”.
3. Freelancers succeed best when their own names become their brand names
Most freelancers work under their own names and donât usually try to find other business names for themselves. A lot hinges on making a mark as a recognizable talented individual known by name. For example, if a client referred to a freelancer as ââ¦ that fantastic photographer Alex Gerardâ, he would feel fantastic. However, he would think it disastrous if a client referred to him as ââ¦ that gifted chap â I forget the name â but heâs got a site called FuturePhotographyâ.
Also, freelancers may invariably have only a personal bank account (on their names) and not business bank accounts. They may need to invoice on their names to fall into the correct tax bracket. They may also need to make their social profiles based on their names for quick recognition.
Even if a freelancer wanted to set up a business later, he could continue operating with his name as his brand name. The only caveat is that itâs hard to sell a business if you want to if itâs so closely tied to your name. You obviously wonât be selling yourself with the business to the new owner, for what will the new owner do with your name? He cannot even transfer the goodwill you have earned through your name for the value he is paying for your business.
If you donât ever envisage owning a business, and you think youâll be happy being a freelancer forever, thereâs nothing better than your name to trade under. Think how your name will become a legend if you succeed beyond your wildest dreams?
4. Solopreneurs can work under their own names or choose business names
As business owners, solopreneurs can choose to make their names the names of their business â or they can choose different business names that echo the brand values they want to promise to customers. As we said earlier in this article, having a business name separate from your personal name makes the business easier to sell later, if you wish.
There are some experts, however, who emphasize that your solopreneur business should never be in your name – for other reasons. According to Alexandra Watkins, founder of Eat My Words, a company that creates brand names for clients, you should not name your business after yourself.
We see personal names used all the time for businesses, like Mia’s Shoes or Danny’s Pet Store. But what do these mean to the customers? Do customers get any sense of the value your brand offers from such a name? That is her point.
The only exception to this rule, according to Alexandra Watkins, is this: “The only time to use your name as your business name is when it lends itself to wordplay, such as a consultant named Steven Lord. His business is called ‘Lord Knows!’ She also quotes “The Wynn Hotel” in Vegas as a great example. It makes sense to use the owner’s name Wynn as a pun. Alexandra’s rationale for business names is, “Often your name will get forgotten in the mix of all the other company names if you simply use your personal name.”
Differences in business earnings
5. Freelancers generally do contract work for clients with requirements
Freelancers often work on several jobs for multiple clients at one time. They trade their services. They usually earn money on a per-job basis and charge hourly or daily rates for their work. Freelance work is generally short-term.
While other businesses do not officially employ freelancers, they may subcontract freelancers for specific projects or campaigns. Itâs common for freelancers to work on several different jobs or projects at once, but some freelance contracts may restrict who else the freelancer can work for until they finish the project.
Most freelance assignments come with some specific and tight requirements from clients. Some projects that require creativity may allow more room for the freelancer to come up with unasked-for ideas.
Freelance jobs can be specialist or non-specialist. For example, a freelance Virtual Assistant can be a Jack-Of-All-Trades, capable of multitasking and helping other business owners with many different types of tasks. But the more sought-after freelancers are those with specialist talent in graphic design, copywriting, website development, photography, translation, bookkeeping, coding, etc. The rarer the talent, the more the freelancer can charge.
6. Solopreneurs sell their own product creations besides working for others
A prime area of difference between solopreneurs and freelancers is that solopreneurs can create and sell their own products in addition to working for other clients â which freelancers generally do not. To do eCommerce, you need a full-fledged, ongoing marketing campaign to support the products.
Depending on whether a solopreneur is selling products for the B2B or B2C market, the kind of marketing campaign needed will be very different, and the psychology of the buyers too. In a solopreneurâs life, about 80% of the time goes into marketing. Itâs far less for freelancers.
Freelancers also need some marketing, but if they are smart, they will get onto the right platforms where exchanges between businesses and outsourced workers happen (like Upwork.com or Freelancer.com). Such platforms attract substantial customer footfall, so they spare freelancers a lot of marketing effort. Solopreneurs, on the other hand, may need dedicated websites to build brand power, attract traffic, convert visitors into buyers, and make sales.
The balance between marketing and sales is also different for solopreneurs and freelancers. Solopreneurs usually sell their products or services by rising above the competition and differentiating themselves by their branding and propositions. This method requires much more focus on marketing than it does on sales. Whereas freelancers may find it easier to market and get clients, but their hurdles will increase at the sales stage when they may have to edge out the competition by making painful sacrifices – like reducing rates or promising more than the brief requires.
7. Freelancers can earn only by trading time and not from passive income
Since freelancers make their money by doing contract projects for others, there is no chance of making “passive income”. They have to trade their time for each project, and this limits their ability to scale. They can only handle a handful of clients concurrently, as many as their time would allow.
Many freelancers try to increase their earnings by getting referrals from past clients for new ones (which reduces marketing costs). They aim to handle more complex or lucrative projects in the future by being choosy about clients. They also scale to an extent by converting all their standard processes into templates, so they don’t have to build every project from scratch if they’ve done similar work before.
If a freelancer can improve the quality of clients he gets, he can perhaps earn more from the client projects he can handle. Building relationships with clients to make repeat purchases from the same freelancer for future work is another way of making sure earnings are steady, if not more.
In the final analysis, there is a limit to a freelancer’s time available to handle his work. A freelancer who works for others ultimately has to match his clients’ pace. Even if he wants to finish a project fast to manage more projects, the clients may be slow in reverting at the crucial stages. Successful freelancers usually scale by landing that one huge paying client who dumps a lot of high-value work on them, bringing both money and fame. After that, there’s a chance to raise the freelancer’s rates manifold.
8. Solopreneurs have room for passive income from selling their products
Solopreneurs who create and sell their products through their businesses have many opportunities to convert their sales into passive income streams. Passive income is income where you produce a product and put it on sale, and after that, without any intervention from you, it keeps earning from your eCommerce system day and night 365 days a year. You literally can sell volumes of the product even as you sleep.
Passive income products require a bit of upfront planning to make them truly independent of your intervention. If you anticipate all the queries people may have before buying the product, you can put up an FAQ page. You can make the support of the customers more manageable by offering a free money-back guarantee if a customer is unsatisfied within the first 30 days of purchase. Try to automate the sales processes, refunds, cancellation, and query handling processes. You can then be genuinely hands-off and earn massively and passively.
Even solopreneurs who offer consulting services (which are limited by time-trading) can productize their consulting into courses that can sell passively. Alternatively, they can repurpose their knowledge into apps and tools that can sell passively. The secret is to try and productize what you may have offered as a one-to-one service.
Passive income allows scaling to an enormous degree. The more passive income products you have to put on your shelves for sale, the more income potential you create. Successful solopreneurs usually spend a lot of time creating an endless array of passive income products, which then earn by themselves without limit.
Differences in business focus
9. Freelancing can be done easily as a side-gig along with a 9-5 job
Freelancers are often referred to as âside-giggersâ these days because many do freelance work side by side with holding 9-5 jobs. For freelancers. Many opportunities for moonlighting arise from their 9-5 jobs. Their day jobs act as their source of contacts for freelance assignments. Clients may want to hire them but not the companies they work for. Sometimes this treads on the ethical territory to be taking on such assignments.
Since a freelancer can limit the number of clients he handles simultaneously, he can choose ones that fit the extra hours he has available after his regular job. Whether he takes one client at a time or more, he can use the extra side-business he has to earn more, learn the ropes of independent working, and also how to manage client relationships on his own.
What side-giggers find most difficult is to manage meetings with clients â online or offline â at reasonable hours. Many side-giggers, therefore, prefer clients from other time zones who are comfortable with their working times when he is doing his night-owl act.
Side-gigs sound easy to do, but sleep deprivation is a real brain-fogging malady, and freelancers need to understand that. They have to restrict the days on which they do their side-gigs so they can catch up on sleep every couple of days or so. Working a straight week of all-nighters is a crazy way to live and can degrade your mental faculties very fast. It is not worth it if all you can extra is small dollars.
10. Solopreneurship is hard to do as a side-gig (though some are successful)
Solopreneurship entails all the aspects of running a business. You create and sell your own products, you may offer services via consulting, you have to manage the back-end tech of your website, you have to keep your business administration in order, you need to do the marketing for your products and brand, and you have to keep the account books updated â among many other things.
Isnât that a tall order to do as a side business while still holding a 9-5 job? Most solopreneurs would balk at the sheer workload and multitasking required and wonder if they have what it takes to do solopreneurship as a side business. Some solopreneurs, though, are adventurous enough to try, but they have to severely limit some of their ideas to fit the time they have on hand.
Those solopreneurs who have become successful side business owners are often just a tad higher than freelancers. They do just a bit more than a freelancer would. They may handle client projects or manage to create a few products for sale via eCommerce, all the while using a whole load of automation tools. This system is an expensive way to do a side business if you want to make it a proposition to earn more.
One good case study I have come across is a solopreneur who began as a blogger offering his services to others during his side-business hours. He continued endlessly with his side business by adding outsource workers to whom he could farm out blogging projects whenever he couldnât handle them himself. The profitability per piece of work was less, but at least he could scale to the maximum extent that his extra work hours would allow.
11. Freelancing could be a first step out of a 9-5 job into independent work
It is often a fearful thing to take the first step into independent earning. This fear applies both to people in 9-5 jobs or even to those who’ve never been in a job. If you want to create a business for yourself eventually, you may not yet have the nerve to dive headfirst into the challenging waters.
Freelancing gives you an excellent opportunity to test your ability to handle a business by first just setting up as an individual doing job work for others. You’ll learn many things in the process. You’ll learn how to get clients, bid for projects, promote yourself, and clinch deals. You’ll learn how to handle work phases, get client approvals, and get your money out of clients. You’ll also learn how to handle several projects for different clients simultaneously without losing your head.
Importantly, you will learn how setbacks are par for the course and how to handle yourself and save such situations. You’ll understand that maintaining and building on relationships can beget you more projects, more referral clients, and more money. You’ll also figure out how to apportion your time, improve your productivity and strive for excellence in all that you do so that your name slowly evolves into a recognizable and respected brand.
All this is invaluable learning for anyone who wants to start a full-fledged business online as a solopreneur and would like to be able to “earn while they learn”. Independent earning can be both enticing and daunting to many people. But fortunately, freelancing offers a way to dip your toes in the water and see if you have what it takes to become a solopreneur eventually.
12. Solopreneurship could be the eventual aim of many growing freelancers
Freelancers who evolve into experts at their trade often dream of becoming solopreneurs – because solopreneur businesses help them break out of working for clients to create and sell their own products. This jump offers them a whole new level of independence and demands risk-taking than they have tried before. It always beckons as a possibility.
Solopreneurship comes with the label of being a “business owner”, which freelancing doesn’t give you. Further, there is a great stretch needed in learning new facets of a business. A freelancer can afford to be preoccupied with just the work he does for clients, but a solopreneur has to manage many more parts of his single-person company, all of which may need new learning.
It can be exhilarating to be a worker one day and the next day make the mental shift to being the boss of your enterprise (even if you are the lone worker in it). You’ll likely want a spanking new website that emblazons your business name across the Internet, and you may want to put on sale a whole array of products you’ve created in your niche, done to your standards of excellence and not someone else’s diktats.
Successful solopreneurs have, many of them, started as freelancers and jumped to a different level of independence as business owners after they have begun to feel more self-confident and ready to take more considerable risks. They may be people who have handled clients but don’t want to anymore. They may want to beat out on a path to unleashing their creativity on their grand ideas for products and services. The jump from freelancing to solopreneurship can be heady and wonderful. It has its challenges, but then, what is life without that excitement?
Differences in business growth
13. Freelancers, as job workers, have to be tactical in their perspectives
To be âtacticalâ means to worry more about completing tasks and actions to precision than to spend time in planning whether those tasks are the right ones to do. Freelancers often donât have to do strategic planning before they undertake tasks, i.e., they donât have to check if the plans will be the right ones for the project. That is the purview of the clients whose projects they handle.
Clients see the role of freelancers as limited to executing upon the plans they have made. They donât expect or encourage freelancers to question their strategies, and they expect only that the freelancer will obey all instructions to the full in letter and spirit.
In the absence of the ability to contribute to strategy, many freelancers may find clients request tasks that make no business sense. For example, letâs say a client wants a freelancer to do some backlinking for his site. The clientâs brief may say, âSend outreach emails to these 40 people in my list to ask for backlinksâ. A freelancer who has some experience may know that he will get results faster if he reaches out to the people who backlink to the clientâs competitors. But the client may insist that he doesnât want the freelancerâs opinion on this topic and has decided who the outreach prospects should be.
Sometimes, a freelancer may be relieved he doesnât have to delve into strategy, and he can merely answer the call for tactical help. The freelancer may feel like he is a lone player and cannot adequately help with the strategic thinking for a large business client. Whether a freelancer sees his limited âtactical perspectiveâ as a blessing or a curse will depend on how much he knows of business. If successive projects show him that he knows more than his clients do, he should consider becoming a solopreneur.
14. Solopreneurs, as business owners, need to take a strategic long-term vision
Unlike freelancers who need to be more tactical in their approach, solopreneurs, as business owners, will need to be strategic thinkers â both for their businesses as well as those of clients (if they offer services). The words âstrategyâ implies âplanning towards specific resultsâ. Solopreneurs must plan before they act, and the plans must be goal-driven.
Planning also implies that they must take the long-view for the achievement of significant results. If a solopreneur is handling a project for his client, he needs to give his client the best advice for the sustainability of results. Likewise, for his own business, his strategies must always be long-term. He can then pace his progress in steps that donât exhaust his energy and budgets too early.
Successful strategic-thinking solopreneurs are often those who are pro-active and not reactive. They constantly pitch new ideas, initiate new projects, and figure out the next big thing. They approach what they need to do today as imperative for reaching a much larger, long-term goal. They are forward-thinking. They believe they are creating the future with every action.
To sum it up, strategic thinkers arenât interested in immediate gratification. Instead, theyâre interested in achieving meaningful goals that require careful planning, monitoring and vigilance, and consistent work. They play the long game â and this also allows them to make much better tactical decisions.
15. Freelancers can grow by upskilling in their specific areas of expertise
Now and again, technological changes will affect the online world of business. Such evolution requires constant awareness of emerging technologies, trend watching, and upskilling. Freelancers, who are primarily engaged in completing projects for customers, need to upskill in their existing talents.
If freelancers learn and grow by upgrading their domain knowledge in the expertise areas they already get paid for, they will widen the scope of their earnings. Itâs always a good idea to see which trends and new technologies will most impact earnings and study up in those areas to be ahead of the curve.
Constantly honing skillsets also enables freelancers to bid for projects that lie outside their usual ambits. Whenever technology changes substantially, companies always demand freelancers who can do sophisticated, up-to-date jobs. If you stay at the bleeding edge of technology, you can bag orders that your competition may not yet be entirely at grips with.
There is also the concept of shoulder niches you can think about to see if you can widen your talent base. For example, if you are an SEO expert freelancer, knowing about the impact of Googleâs latest algorithm upgrades will enable you to help clients in ways that competitive freelancers may not yet be able to manage with familiarity. As a rule, always look to upskill every quarter. Thatâs how fast technology and trends change in the online business stratosphere.
16. Solopreneurs can grow by upskilling in the several facets on business
Unlike freelancers who need to be single-minded about upskilling in their talent areas, solopreneurs may have to upgrade many different areas of their businesses whenever technology changes. The question solopreneurs need to ask themselves would be, âWhich area of my business should I prioritize for upskilling in, so it has a domino effect on the rest of my business? Where will upskilling cost the least and produce the most dramatic changes in my business?â
Intelligent and successful solopreneurs never madly rush to learn new courses or buy new books or expensive research the minute there is an impending technological transformation on the horizon. They wait to see where the new technology will most impact them and their customers. They assess which of their products or services will gain the most from the upgradation of technology. They then time their upskilling carefully.
Being too early in the process of embracing change may mean becoming a guinea pig for the new tech or perhaps going down the wrong garden path. Being too late may leave solopreneurs behind the competition. Upskilling will be at its most cost-effective and produce maximum benefits if timed correctly – after many use cases in the market prove the sustainability of the new technology.
Thereâs one more thing to remember about upskilling as a solopreneur. Always be ROI-conscious when you spend on sharpening your knowledge and skills in any area. If it can guarantee monetary gains within a reasonable time frame, the expense of self-improvement is an investment. Otherwise, itâs an expenditure that needs to be put on the back burner till the market shows many examples of surer returns from adopting the new technology.
Differences in business satisfaction
17. âFreelancerâ speaks more to what you do and how professional you are
When you are a freelancer, people evaluate you by what you can do for them. Your ability to deliver what they ask for becomes the prime yardstick of your brand or personal worth. It can often happen that you are seen less as “you the person” and more as “the one who can do this task”.
Your cherished values of excellence in work, or what you see as satisfying your customer, don’t matter so much. The customer decides what delights him and what doesn’t â and even if you disagree with his standards, you are not in a position to dictate terms. You may know that what the client wants is not suitable for his brand, and you may even tentatively broach the point with him. But if he doesn’t understand the import of what you are saying, you have no option but to deliver what he wants.
Freelancers often rue that clients are so fixated on their briefs that they won’t listen to better ideas. But alas! You cannot tell someone anything they don’t want to know. You have to learn to give clients what they want against your own better reason. This acceptance marks you out as having professionalism.
In the end, most successful freelancers are those who’ve learned that there are limitations to looking for personal fulfillment. You may not get creative satisfaction, but you will get money. Hopefully, you will get more than enough money to cover up your dissatisfaction with the kind of work you have to do sometimes for that money.
18. âSolopreneurâ speaks more to how you do business, your attitude, and why
Solopreneurs have a good time, relative to freelancers, in satisfying their souls by doing work they can love. They can set their standards of creativity and innovation, aim to reach new joys every day in their work, and do work only if it reflects their stated values.
People will respect them for the authority they emanate, and clients will not quarrel with their views. Clients will be more amenable to listen to them as they too are business bosses who know what they are talking about. As Simon Sinek often says, “People will be more open to working with you if they know the ‘why of business rather than your ‘what'”.
Branding becomes critical to your message about your business values, ethics, purpose, and a yen for excellence. Your brand value will need constant reinforcement via various ways of communication to act as the prime evaluation criterion for your business. Remember this. If your branding is powerful, people will tend to gloss over your mistakes and make much of your plus-points.
In the final analysis, everybody desires evaluation for their worth rather than their craft alone. Solopreneurship ensures you that respect for your worth in a way freelancing can not. But again, merely saying you have those values and then acting consistently to them are two different things. When customers learn to respect your brand and what it stands for, it is up to you to always keep it that way and not let your brand slide from the pedestal it occupies.
So What Are Your Thoughts? Do Share!
This post is incomplete without your input. The community of solopreneurs would feel galvanized to hear from you … so do share your thoughts on this topic with us, in the comments field below this post.