Entrepreneurship is often confused with freelancing and vice versa. In fact, entrepreneurship is usually used to refer to everyone who starts or runs a business. But that's not the case.
Entrepreneurship and freelancing are two distinct forms of self-employment.
Both offer tremendous benefits in their diverse ways. As we'll see, people are attracted to either of the two based on their personality, knowingly or unknowingly.
The world of work has drastically changed. People no longer see regular jobs as fulfilling or secure. Toxic work environments and burnout syndrome are on the rise.
Now more than ever, people are thinking out of the box to achieve financial freedom without going the traditional 9-5 route.
That said, if you’re ready to work for yourself, are you an entrepreneur or a freelancer? Both offer the ability to “be your own boss,” but in different ways. How do you even know which one to pick as a career path?
First, let’s get the basic definitions.
What Is an Entrepreneur?
An entrepreneur is a person who starts a business — typically around a new product or service — and takes up all the risks with the aim of making a profit.
Entrepreneurs find gaps in the market, create ways to meet that need, usually different from existing models, and spend time and resources operationalizing their venture. With limited finances and resources, the entrepreneur may initially take up all the major responsibilities, such as sales, marketing, and distribution.
But with the determination to scale the business and get high returns, the entrepreneur sources better capital, hires qualified talent, and builds organizational systems to build a business that's bigger than themselves. At the same time, an entrepreneur also understands that when they first start out, they may be the one who juggles all the balls and wears all the hats.
Related: Do You Have What It Takes to Be an Entrepreneur?
What is a Freelancer?
A freelancer is an individual who gets paid for working on specific projects.
Unlike entrepreneurs or business owners, they look for established markets to offer a specific service. They work for different clients simultaneously and charge different hourly rates or project-by-project rates. The bottom line is they need to work to get paid.
Freelancers can find clients on their own or use one of the many freelancing platforms that connect them to potential clients around the world.
What Are the Differences Between Entrepreneurs and Freelancers?
Entrepreneurs and freelancers may seek creative and financial freedom through their ventures, but there are distinct differences in how they approach certain things.
Time
Entrepreneurs invest copious amounts of time (sometimes equivalent to two regular jobs) to make their business operational. Bouncing off between meetings, calls, and emails is just part of their day as they work to scale and make their venture profitable.
They understand that work-life balance might be out of whack for a season. But when their efforts bear fruit, they receive great rewards for years — even generations.
Freelancers exchange time for money, meaning they only get paid for their work hours. Therefore, a freelancer can earn income quicker than an entrepreneur in the same field. While they may invest time in their ventures differently, one truth still holds. They both require strategic time management practices to achieve their goals.
Both entrepreneurs and freelancers need stellar time management skills to excel.
Whichever you opt to become, the following are reliable time management techniques to help keep things on schedule without compromising productivity.
Skills vs. Ideas
Entrepreneurs build their businesses around new ideas and innovations. They focus on providing a lasting solution to a problem. The better the idea, the more profits they get. Of course, you need the skills to back it up, but a good business person also knows when to delegate, outsource, and build a team.
For freelancers, it's all about their skills. While they may be required to use their skills creatively to achieve their client's vision, they are primarily hired to get a specific job done.
Business as an Asset
Entrepreneurs build on their ideas, scale up the business, and make it an asset that pays them indefinitely, even without their direct input in the daily operations. In some cases, they can sell the business off for a hefty payday and move on to start a new venture.
Freelancers can only scale their craft to earn more money. They can't sell their business as an asset because they are the asset.
Entrepreneurship or Freelancing: Which One is Right for You?
Entrepreneurship is not for everyone, and neither is freelancing. They both call for unique personality traits for the best chances of success.
While there are definite overlaps in traits required by both entrepreneurs and freelancers, some traits have been highly connected to being successful in one or the other.
Entrepreneurship is a good idea if you have:
- Creativity — If you can envision possibilities and apply your creativity to make them viable solutions that solve problems.
- Passion — Passion is the fuel that drives an entrepreneur to create a business idea and pursue it with focus until it yields results.
- Robust Work Ethic — Entrepreneurs are willing to put in the time and energy required to make things happen. Even when it calls for 80-hour weeks for several years.
- Strong Extrovert Traits — if you love networking, pitching ideas to investors, and leading people (this is not to say that introverts can’t be entrepreneurs; just that both have different strengths and weaknesses).
- Ability to Embrace Failure — A business can grow, or it can die. Entrepreneurs are ready to take the risk of failure and are equally ready to start over.
Freelancing is a good business to start if:
- You Love Helping People — Creating things that others love and enjoy is the motivation that drives every freelancer.
- You Can Thrive in Solitude — Freelancing can be quite lonely. But if you enjoy your own company and work effectively alone, then it could be a fit. Extroverts would benefit from having some ambivert traits here.
- You Prefer Flexibility — Freelancing offers you control over the workload you can take at a particular time.
- You’re Reliable — Your clients need to be able to rely on you to deliver quality work on time, every time, with minimal supervision.
- You’re Disciplined — You can motivate yourself to meet goals and deadlines on time when doing work for others.
Which One is Better - Entrepreneurship or Freelancing?
If you are trying to decide between entrepreneurship or freelancing, tentatively speaking, neither is better than the other.
Depending on your personality, career values, and work preferences, one of them may prove better than the other — for you, that is. If you prefer to work on one task to earn money quicker but don't like the demands of running a business, freelancing may be a better fit for you.
However, if you prefer creating a business from scratch and you're willing to delay earning for a while to make it grow with the potential to give you recurring revenue, then entrepreneurship might be more tailored to you.
As mentioned earlier, entrepreneurship and freelancing provide gratification in different ways.
It just comes down to which one is right for you based on your personality. Additionally, it’s important to choose a field or industry that matches who you are too — many a freelancer has gone down a path doing things they didn’t love, just to make a buck, and ended up as unhappy as if they were at a job they hated.
How Can You Discover Your Entrepreneurial or Freelance Personality?
If you can identify your preferred business model between entrepreneurship and freelancing, you have successfully completed one part of the task. The next important task is narrowing your career options to the entrepreneurship or freelance field that best fits your personality.
Here’s how you can do it:
- Research — gathering information from successful entrepreneurs and freelancers' biographies, for instance, can give you insights into your area of interest.
- Personality Tests— These career assessment tests deliver a broader understanding of yourself and your work preferences.
Research can give you valuable information based on other people's experiences. In contrast, a personality test assesses your internal motivations and preferences. It gives you actionable insights you can use to make career-changing decisions based on who you are.
Benefits of a Personality Test for Entrepreneurs and Freelancers
A personality test is an introspective career assessment tool that benefits entrepreneurs and freelancers alike.
These benefits are:
- You get to identify your strengths that you can build on
- You get a better understanding of your weaknesses that require improvement
- You can avoid certain pitfalls, such as getting stuck in an unsuitable career path
- You foster better team communication and collaboration
Which Personality Tests Help Me Choose My Self-Employment Path?
Personality tests are simple and effective career assessment tools that can help you match your interests with the right entrepreneurship or freelance path.
We recommend these personality tests to help you become successful at being your own boss:
Holland Code Test
The Holland Code Test is a career interest test that helps you determine the best business for you based on your personality in these six categories: Realistic, Investigative, Artistic, Enterprising, and Conventional. It's possible to find some of your strengths in different categories, but there are almost always dominant traits that drive you to open one business and not the other.
Similarly, the test results will help you choose between entrepreneurship and freelancing and which specific business ideas in your preferred category carry the best odds of success based on your personality.
Big Five Personality Test
The Big Five Personality Test evaluates your business traits based on five core personality traits: Openness, Conscientiousness, Extroversion, Agreeableness, and Neuroticism.
While only openness and conscientiousness traits are strongly related to starting a business, everyone has the potential to turn the job they love into a business idea. The test will help you identify the key strengths and weaknesses that set you up for success in your entrepreneurial or freelancing path.
Myers Briggs Personality Test
The Myers-Briggs Personality Test helps you gain insights into your business preferences and a broader perspective of how you interact with the world. The test analyzes your preferences in these four focus areas:
- Extraversion (E) and Introversion (I)
- Sensing (S) and Intuition (I)
- Thinking (T) and Feeling (F)
- Judging (J) and Perceiving (P)
Based on the results, you're placed in one of the 16 personality categories with a four-letter acronym.
Some of the best business-oriented personalities include ENTP, ENTJ, ESTJ, and INTJ. But again, everyone has the potential to start a business and make it thrive if they capitalize on their strengths and fill in the gaps brought about by their weaknesses.
So, Are You an Entrepreneur or a Freelancer?
A personality test can help you decide whether you're better suited to be an entrepreneur or a freelancer. You'll get to learn the why behind your business decisions. It can also give you clarity and a better sense of direction in your career.
Whether you venture into entrepreneurship or freelancing, you'll get a chance to be self-employed and live out your dreams! What do you want to do with your life?
