Is freelancing or self-employment right for you?
While freelancers are self-employed, not all self-employed workers are freelancers. Here's how to make an informed decision.
As alternatives to traditional employment become more accessible, more and more people are considering freelancing or self-employment as an option. Whether that’s in pursuit of a lifestyle change, a desire for fulfilling or flexible work, or to make some extra money on the side of traditional employment.
While both options offer increased autonomy and flexibility, they each present unique challenges and opportunities, and many people don’t realise there’s a difference.
So, I wanted to explore the defining characteristics of freelance and self-employed work and the advantages and potential challenges of each path so you can make the best decision for your own needs and professional goals!
What is freelancing?
Being a freelancer can best be described as a project-based approach to work. You may have long-term clients, but many clients will be one-off projects, and you may offer many different services and specialties.
This is what you can typically expect from being a freelancer.
Short-term or project-based work
Multiple clients simultaneously
Often remote or location-independent
Examples: Writers, designers, virtual assistants
What is self-employment?
A freelancer doesn’t need to own a business to freelance, but many make the transition to self-employment once they gain experience. Self-employment tends to be structured, and while you’ll still be looking for clients (or customers), there tends to be a more long-term and strategic approach.
This is what you can typically expect from being self-employed.
Long-term business growth focus
Potential for employees and physical locations
Product or service-based
Examples: E-commerce stores, marketing agencies, restaurants
Read More: Freelancing vs Self-Employment
So which one is right for you?
If you value flexibility
Both offer more control over your schedule than traditional employment. You can choose how much you work and when you work as long as you keep on top of things.
Self-employed people have the potential for more flexibility if they scale and have employees—though that comes with its own responsibilities.
Result: Both could work!
If you’re concerned about income
Freelancers may face feast-or-famine cycles, while self-employed individuals might have more stable income (but higher overhead costs).
Of course, freelancers have a very high earning potential, often even higher than those in traditional employment, because they can work on as many projects as they want and choose their own rates.
However, self-employment's scalability allows for long-term growth and, depending on the business, a more stable overall income. If the inevitable quieter periods and necessary money management of freelancing sound particularly stressful, then maybe self-employment is for you!
Result: Self-employment might be better!
If you want major growth
Self-employment often has more potential for scaling, while freelancing allows for diverse project experiences. That doesn’t mean you can’t be a high-earner as a freelancer though.
Result: Self-employment might be better
If work-life balance is a priority:
Both require intentional boundaries to maintain a healthy balance but it’s easier to choose your hours and projects as a freelancer. Being responsible for a team, for example, or having customers or products to manage might make this more difficult overall.
Result: Being a freelancer might be better!
Which path is right for you?
Consider your long-term goals, desired work style, and risk tolerance. Do you thrive on variety and flexibility, or do you dream of building a lasting business?
Remember, these paths aren't mutually exclusive. Many successful entrepreneurs start as freelancers and gradually transition into larger self-employed ventures!
If you want more advice about getting started as a freelancer or self-employed then book a consultation. Or if you need help with your business, our writing and marketing services might be what you need. Get in touch!
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