Within the past few weeks, a number of people have asked me for advice on growing their businesses. The question I ask before giving any advice is whether one wants to be a freelancer or entrepreneur. When I started my first business I was a freelancer. Today, I'm an entrepreneur, building my third business.
The chasm between freelancer and entrepreneur is wide and deep. Let's look at why.
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With that said, let's have a conversation.
Definitions We'll Be Using
For the purpose of this article, we will leave dictionary definitions aside and use these two:
Freelancer – a self-employed individual who seeks to remain self-employed in a profession of his/her choosing.
Entrepreneur – one that builds a business greater than oneself, and creates value beyond what an individual can provide.
With those definitions in hand, let's look at examples.
Example A: Freelancer
I started my first business when I was 22. I was doing IT work – building and supporting IT networks and computers – and running around the DC-MD-VA area. After 12-16 hours of performing IT work, I would return home, where I had to do all of the finance, marketing, sales, and other work involved in running a business.
I also formed strategic alliances with companies so I could provide more services than I myself performed. This included things like web design, web development, computers, firewalls, and much more.
It was during this time that I obtained many Microsoft, networking and other computer certifications.
I was, by definition, a freelancer.
Example B: Entrepreneur
My second business – Atlantic Dominion Solutions (the name of which I continue to use today) – started as an IT services firm in Florida, but quickly morphed to a web development firm. We built custom online applications for companies that ranged from startups to Fortune 50 clientele (Chrysler was a client for a two years).
Within a year-and-a-half of quitting my job and doing the business full-time, I had 9 full-time employees on payroll and more than $500,000 in yearly revenue.
In addition, I:
- Held a developer conference 2 years in a row with more than 150 attendees each year
- Taught web-development classes
- Sponsored developer conferences in the U.S. and Europe
- Spoke at developer and project management conferences in the U.S. and Europe
- Built 3 online applications and sold two (Scrum'd, Expens'd)
- Performed project management consulting for an Inc. 500 company
This was on top of obtaining multiple project management certifications.
I say this not to brag, but to show the major difference in approaches. When I was a freelancer, the value I created via my business was limited to what I myself could do. With the web development business, I was able to work with a Fortune 50 company, hold a yearly conference, build and sell products, and much more.
The Current State of Dempsey Marketing
Today at Dempsey Marketing we have a team of 10, including my wife and myself. We grew from an individual – me – within the past 5 months.
This past weekend, while working with Lauri and the Saltar Solutions team, we helped Dean Hyers achieve #1 rankings in 3 categories on Amazon for Winning Presence for Business Presenters. 4 days after launch, it continues to hold those positions.
I just published our first Entrepreneur Guide: Quickly Create A Website To Generate Leads. It is the first of many such guides to be published on the Kindle.
We hold monthly webinars, post between 3-7 times per week, and are increasing the number of clients that pay us on a monthly basis to perform all their marketing. We are also fortunate to have a client who has transformed the lives of literally tens of thousands of people.
We would not be in a position like that today if I was acting like a freelancer – I have to be an entrepreneur. That statement brings me to the point of this article.
The Commonalities Between Freelancer And Entrepreneur
Regardless of which path you choose, there are things you need to learn and constantly improve on:
- Marketing your business – keep new business coming in
- Sales – turning leads into clients
- Finance – a lack of cash will kill a business faster than you can say “oh shit I'm broke.” You need to be able to control your cash flow, and that means being able to keep track of what's coming in and out, and reading financial reports for the business.
- Operations – streamlining processes so you can provide a higher level of service to your clients
- Account management – keeping clients happy means you keep clients, and your business continues to exist
- Service – whatever service you provide, you need to get better at your craft
- Product Development – if you create products in addition to or instead of services, you need to continuously improve the products
That's a large list, and, in my opinion, why a lot of businesses fail – they fail to grasp the totality of what is required to run a business. It's why, when I had my first business, I would burn out on every 3 weeks – I was trying to do it all.
Your approach to this is one of the major factors between your being a freelancer or entrepreneur.
The Freelancer's Approach
A freelancer will look at that list and perhaps outsource one or two things. He might find a book keeper and a CPA. Regardless though, he will continue to do a bulk of the production work.
The freelancer won't always value his time beyond the hourly rate he charges clients. For instance, when working with a client, you have the overhead of:
- Your website
- Project management systems
- Time managing the project – communications with your clients, subcontractor and partners
- Software and hardware to perform services
- The marketing it took to get the client in the first place
- The sales time it took converting that client from a lead
And then freelancers wonder why they're working like crazy and aren't making enough money…
The mindset of a freelancer is very telling. For my Life Of The Freelancer project (now closed), I interviewed more than 200 freelancers in a variety of industries. After attracting more than 2000 daily visitors to the site (a year-and-a-half ago), I found a major flaw in my monetization strategy: almost every freelancer I encountered saw themselves not as someone building a business greater than themselves, rather they defined themselves by the job they did – web developer, web designer, accountant, etc.
The chasm between freelancer and entrepreneur is one of mindset, and the resulting action.
The Entrepreneur's Approach
When I changed my focus from serving freelancers to serving entrepreneurs, an entirely new world opened up, and has allowed me to take Dempsey Marketing to where it is today. And we continue to move forward.
Entrepreneurs see things differently. And while many began as freelancers, they have leaped across the chasm. Here are traits I see in all entrepreneurs:
- They are not defined by their business, rather they define their business based on how they want their life to be. How they do is more important than what they do.
- They surround themselves with individuals smarter than themselves in various areas, and acknowledge this fact.
- They focus on creating scalable business systems in order to create greater business value.
- They do little to no of the hands-on work of the business.
- They create the larger vision for the business, and ensure that each person that works within the business is aligned with that vision.
- They are always seeking new opportunities, but remain focused enough to ensure that opportunities they currently exploit don't fall by the wayside.
The greatest trait of entrepreneurs is this: they think really really big, and act on that thought.
- Andrew Carnegie sought to mass produce high-quality steel, and built “the most extensive integrated iron and steel operations ever owned by an individual in the United States” (Wikipedia)
- Henry Ford sought to create an affordable car that every American could buy. More than 109 years later, Ford Motor Company continues to produce American cars.
- Steve Jobs sought to combine liberal arts with technology, and put a computer in every home. He used this philosophy to literally change the computer, music, and mobile phone industries.
- Richard Branson built the Virgin Group from a company hand-delivering records from a basement office to more than 300 businesses.
Not all entrepreneurs are business people:
- Florence Nightingale is considered the founder of modern nursing
- Juliette Gordon Low founded the American Girl Scouts
- Maria Montessori is famous for her work in the education of young children, a method used in Montessori schools today
- Susan B. Anthony was a tireless campaigner for gender equality and inspired a nationwide suffrage movement. (U.S. History)
- Harriet Tubman led more than 300 slaves to freedom
- Martin Luther King Jr. was assassinated during his quest for black equality in the United States
Do you have to be these people to be an entrepreneur and wildly successful? No. However, you must think bigger than yourself.
Your Choice: Freelancer or Entrepreneur
Today you have a choice between two very different paths: freelancer or entrepreneur. While many of the skills you acquire on these paths are similar, the mindset with which you approach your business is very, very different.
If you simply want to work for yourself, you can choose either road.
If you wish to hone your craft and do the job you do, not growing beyond yourself and perhaps a subcontractor or two, you've chosen the path of a freelancer.
If however you've chosen to build something larger than yourself, to create greater value than you yourself can provide, to leave behind most of the day-to-day hands-on work of the business, to surround yourself with people more knowledgable than you in many areas, and drive it all forward with a vision that will knock most people on their ass – you've chosen the path of the entrepreneur.
Many years ago while building my web development firm, I realized I had to make a choice. On the one hand, I could become the best web developer I could be. On the other, I could learn more about business, and for the most part set aside creating code and focus on building a company. I chose the later.
Which do you choose?