I recently watched a short video on David Siteman Garland’s show, The Rise to the Top in which Seth Godin explains the difference between being a freelancer and being an entrepreneur.
Here’s what he said (in essence):
A freelancer is someone who basically trades hours for money. If I spend a certain number of hours designing a web site, for example, I can then send an invoice to my client for x number of hours.
Under this definition, the most money a freelancer can make is equal to the number of hours in any given month multiplied by your going rate.
Conversely, he defines an entrepreneur as someone who can make money during all hours of the day, even when he’s sleeping.
An entrepreneur focuses on building something bigger than himself/herself. Something that can generate passive income. Something that can grow exponentially in relation to the number of hours you put into it.
(You might also like: 9 ways designers can generate passive income)
Do you agree?
So is this the true difference between freelancers and entrepreneurs?
Do you believe there really is a difference between a freelancer and an entrepreneur? Leave a comment and let me know.
A wrench in the works
Here’s the wrench that I just can’t shake. I’ve got one hold up on these definitions:
What about the designer or freelancer who doesn’t charge by the hour, but charges by project?
Are they a freelancer (essentially doing the same work as the “freelancer” Seth describes) or are they an entrepreneur (getting paid more per hour depending on how quickly they complete a project)?
Why charging by project turns you into an entrepreneur
Seth’s theory and definitions just reinforces the theory I have been a proponent of for ages: Charging by the project instead of by the hour is still the best option.
And that’s the moment when (according to Seth Godin) you transfer from freelancer to entrepreneur.
Imagine you’re charging $100 for a project.
If you complete the project in 1 hour, your income rate is $100 and hour.
But if you decide your going rate is $60 and you complete the project in an hour, you’ve lost money.
So, if your confident in getting the job done well and quickly, charging by project is really the way to go!
Do you agree? Let me know in the comments.
Both are great options!
Assuming you subscribe to Seth’s theory, there’s a pretty big difference between an entrepreneur and a freelancer.
But neither one is better than another.
Whichever one fits you best is the one you should run with.
So which are you? An entrepreneur or a freelancer?