The gig economy has revolutionized the traditional workspace, bringing about a lexicon of professional identities often used interchangeably. Freelancer vs consultant, freelancer vs independent contractor, freelancer vs self-employed, freelancer vs entrepreneur… Do they all mean the same thing?
Not quite. In this deep dive, we’ll unravel the nuances, from freelancer vs business owner to freelancer vs agency, to equip you with the knowledge to navigate and position yourself in today’s online marketplace.
Freelancer vs Consultant
Freelancing and consulting are paths often crossed by individuals seeking autonomy in their work lives, but there’s a fine line between the two.
A freelancer is a professional who works on different projects for multiple clients. They’re typically hired to execute tasks and deliverables in their niche—think graphic designer creating a logo or a writer crafting web content. Freelancers commonly charge by the hour, project, or retainer rate.
Autonomy & Flexibility: Freelancers have control over their schedules and client choice as well as handle the specifics of the assignments they take on.
Consultants, on the other hand, are experts in their field who guide businesses or individuals towards solutions to their problems. They analyze issues, strategize, and provide recommendations. Consultants might also help implement these strategies, but their primary role is advisory.
Expertise: The main currency of consulting is knowledge and strategic thinking—often with a focus on solving more complex issues than those tackled by freelancers.
Both freelancers and consultants enjoy independence, but while freelancers are hands-on executors, consultants are strategic advisors.
It’s not uncommon for freelancers to evolve into consultants as they gain experience, expertise, and mostly–confidence in their services and value. Consultants can command higher rates (not always, though!), so this can be a natural progression both professionally and financially.
Freelancer vs Independent Contractor
This comparison splits hairs even further, as both terms are incredibly similar in the context of work structure.
In the realm of semantic technicalities, a freelancer is someone who works with multiple clients, generally on smaller, short-term projects. (Many freelancers do work with long-term, consistent clients, however.) They identify with a “gig” mindset, providing services that range from creative to technical.
Client Volume: Freelancers often work with several clients, sometimes globally, thanks to remote work technologies.
An independent contractor is akin to a freelancer but can work on a more long-term, extensive project. The term “independent contractor” is also a legal designation used to define a worker’s tax obligations in regions such as the U.S.
Project Depth: Contractors might work with fewer clients but usually do so on a deeper level over a longer period.
Ultimately, while functionally similar, the distinction often comes down to the scope of work and regional legal definitions concerning worker classification and taxation.
Freelancer vs Self-Employed
The comparison between freelancer and self-employed status is largely a matter of perspective and how individuals categorize their professional activities.
Freelancers are inherently self-employed, as they operate their own mini-business of one. They are hired for specific expertise and usually don’t employ others, although they can and do contract out to other freelancers for support sometimes.
Solo Operation: Most freelancers brand themselves with their personal identity, relying on their individual reputation.
Being self-employed is a broader term encompassing anyone who runs their own business and isn’t employed by someone else. This term includes freelancers, but also small business owners, entrepreneurs, and even franchise operators.
Business Model Flexibility: The self-employed classification covers a broader scope of business arrangements and can involve hiring employees, unlike the typically solo freelancer.
The key takeaway—it’s a square-rectangle situation: all freelancers are self-employed, but not all self-employed individuals are freelancers.
Freelancer vs Entrepreneur
The freelancer versus entrepreneur comparison delves into the heart of professional intentions and goals.
Freelancers trade their time and skills for income. They are typically specialized and may not necessarily be looking to scale or grow beyond their personal capacity for work.
Individual Focus: Freelancers are about the work itself, not necessarily the act of scaling a business (although we encourage and teach our members inside Fully Booked VA to do just that!).
Entrepreneurs are innovators and risk-takers. They create businesses with the intention to grow, scale, and possibly sell. Entrepreneurs are willing to build a structure that’s bigger than oneself, often involving a team and a long-term vision.
Growth Mindset: The entrepreneur’s primary focus is on building, operating, and scaling a business as a separate entity from themselves.
While freelancers might be entrepreneurial in their zeal and independence, true entrepreneurs are playing the long game of business growth and development.
Freelancer vs Business Owner
This comparison considers scale and scope.
The essential freelancer is a solo act. They own their job, but their business typically doesn’t scale beyond their personal output. They’re a ‘business of one’.
Personal Liberty: Freelancers prioritize the freedom to choose projects and control their own schedules.
Business owners have taken the step beyond themselves to create a system that operates, to some degree, independently. They might start as freelancers but eventually grow to manage a team or a larger set of resources.
Operational Oversight: Business owners oversee the mechanics of a business—it’s not just about the work they personally can produce but about managing the workflow and growth of the company.
The key difference lies in the scalability and the fact that business owners may or may not still be doing the primary work of the business.
Freelancer vs Employee
Freelancers and employees sit at almost opposite ends of the traditional work spectrum.
Again, freelancers have a high degree of autonomy and flexibility. While they have to handle self-promotion and send invoices, they also get to decide who they work for and what projects they accept.
Freedom: Freelancers don’t report to a boss in the traditional sense—clients are not employers but customers.
Employees work for a company or someone else and have far less control over their work life. They trade autonomy for the stability of a steady paycheck, benefits, and clearly defined work hours and roles.
Stability: Employees tend to have more predictable work and financial stability (although, as we’ve learned these past few years–not always!), sometimes at the expense of freedom and flexibility.
The major differences are tied to the trade-offs between stability and autonomy.
Freelancer vs Agency
The last comparison looks at the individual versus the collective.
Freelancers work as independent individuals, possibly teaming up for projects but largely controlling the workload, client interaction, and project fulfillment themselves.
Direct Control: The freelancer’s clients deal directly with the person completing the work.
An agency is a collective that offers a range of services managed and executed by a team of professionals. Clients engage with an agency as an entity, rather than with individual workers.
Resource Pool: Agencies offer a breadth of services and the ability to handle larger or more varied projects than an individual freelancer typically can.
The contrast is clear—one is a solo play with direct client service, the other a team effort offering a broader scope of services.
Professional terminology often overlaps, but distinctions are important for tax purposes, market positioning, and scaling. Whether you’re a freelancer honing your craft, a consultant offering expert advice, or an entrepreneur building an empire, each path offers a unique array of freedoms, challenges, and rewards.
Understanding where you stand can help navigate the terrain of professional identities, ensuring you make strategic choices that align with your career goals.
Having said that, if you’re looking to make a change in your career and quality of life, none of these titles really matter right now. Yes, we said that. What does matter is making a move toward autonomy and freedom of choice when it comes to how you spend your time, who you work with (not for), how much you earn, and the kind of work you do.
The rest of the details (like what you’ll call yourself) sort themselves out along the way–we promise. Getting started as a freelancer is an entry point to possibilities you likely can’t even imagine right now. It’s a low-friction way to begin earning income independently while working remotely, and the sky truly is the limit when it comes to how you develop your business.
The important thing to remember is that you get to decide. If offering services remotely and replacing a full-time income is your goal, then being a freelancer can provide that for you. If you have aspirations to find out what you can achieve personally and professionally, you have lots of room to explore and grow, as we’ve outlined here.
You won’t know until you move forward and commit to making that change you’re seeking.
Why not you? Why not now?
Ready to start your freelance journey? Enroll in VA Foundations and let’s take your next step–together!