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Freelancer, Consultant, Entrepreneur: Which Are You?

The important differences between freelancing, consulting and being an entrepreneur.
Small Business Expert and Business Catalyst, ALKAMAE
September 27, 2017

In the world of business we bandy around the words freelancer, consultant and entrepreneur as if they are interchangeable. But are they?

According to the Merriam-Webster Dictionary: a freelancer is “a person who works independently, selling work or services by the hour, day, or job, with no intent to pursue a permanent or long-term commitment to any single employer.”

A consultanton the other hand, is “one who is paid to provide professional or expert advice in a particular field or specialty.” And in a completely different category is the entrepreneur who “organizes, manages, and assumes the risk of owning a business or enterprise.”

Which one is right for you?

Freelancer vs. Consultant

Technically, there isn’t much of a difference between being a freelancer and being a consultant. Both are independent contractors working for multiple clients. Both are their own bosses. However, the very important difference between the two is that one offers a deliverable while the other gives professional or expert advice.

Freelancers

Freelancers offer a deliverable—goods in a deliverable state that are concrete and tangible. Deliverables can include writing an article for a newspaper or magazine, designing a website 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.

Entrepreneurs are their business. Because of their business, they are sustained.

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, and integration of new technology, medicine, psychology and law.

Entrepreneurs

Entrepreneurs sell 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. Entrepreneurs focus on running their business and building something.

Hardwired into every entrepreneur is the natural tendency to take risks. And while venture capitalists and other investors may be involved, what drives entrepreneurs is the thrill of building a business that is sustainable and can survive after they are gone. Entrepreneurs are their business. Because of their business, they are sustained.

How They Compare

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.

Freelancers and consultants may decide to start up a small freelance or consultant business, although they might have no interest in overseeing or operating a larger business. 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.

So what's more comfortable for you: selling yourself or selling your business? Would you rather be a freelancer or consultant working for yourself, beholden to no one, enjoying a variety of assignments mainly working from home? Or, are you more interested in manifesting your vision and building a business to call your own? Knowing the distinctions between the three very different categories will help you decide.

A version of this article was originally published on April 29, 2011.

Photo: Getty Images
Small Business Expert and Business Catalyst, ALKAMAE