Should I be a freelancer or entrepreneur?

You have to decide should I be a freelancer or entrepreneur?

The distinction is so critical that I have to explain both.

So a freelancer means: people pay you money and you do “work” and if you don’t do “work” people don’t pay you money. Freelancing is a great way to make a living.

Now an entrepreneur is: someone trying to build a business bigger than themselves.  Twitter will be fine if Dick Costolo goes on his yacht for four weeks, so he makes money while he sleeps. That an entrepreneur builds something that he or she could sell one day, or take public one day if they choose.

So, if you’re a small businessperson you’re largely a freelancer with support, someone who understands the natural size of their business and wants to enjoy the craft of doing it every day.

The reason that it’s so important that you choose is because if you’re a freelancer and business is going well, your tempted to hire people to do more of the work. You start saying to yourself, “this is great I get $200 an hour for this graphic design work and I can go hire someone for $30 an hour to do graphic design work, keeping $170.”

And as you’re adding more employees you start to act as an entrepreneur, which is all well and good except the cheapest person you can hire is you. So when in doubt, you hire yourself, which is a problem because you just hired yourself to do the work and then there’s no one left to get you clients. Now there’s no one left to figure out the strategy, now there’s no one left to raise money and on and on…

So what you end up doing is having a nervous breakdown because as business slows down you do more of the work. And you’re so busy doing that, that your business can’t grow anymore and now you’re neither a freelancer or entrepreneur.