What is the difference between a freelancer, a sole trader and a business owner?
There are a few ways to look at each but here is my take:
- A freelancer is someone who provides services but doesn’t have an employer.
- A sole trader can be interchangeable with a freelancer. They can still be a service provider but they can also have a business selling products to customers in Australia or across the world.
- A business owner oversees departments, staff and an ever-expanding (hopefully) number of opportunities.
Being a freelancer doesn’t mean you’re not a business owner (in my opinion).
If you have started freelancing and you’re happy to take whichever jobs or money come your way, there is no need to change the way you view yourself. After all, freelancing as a service provider or being a sole trader who doesn’t have grand revenue targets are both great ways to find work/life balance.
However, even if you never plan to expand your team to anything more than yourself and perhaps some contractors or a virtual assistant, it’s my recommendation that you think like a business owner.
Have a look at why I recommend this mindset:
Business owners have goals
Even if your goal is small, it will give you a sense of purpose and direction. There are few successful business owners who don’t have a clear idea of what they want in the long term.
I resisted setting goals in my early days as a freelancer because I was very happy with what I had. But when my partner fell sick and I was faced with the threat of being the sole provider for my family, I set a goal to make that possible. From there, big things started to happen.
Business owners make plans
Having a goal to essentially double my income meant that I had to figure out how to make that happen.
It forced me to take stock of what was going well and what wasn’t working in my little micro business. I was also inspired to figure out which steps would take me where I wanted to go.
Instead of each month blurring into the next, having a business owner mindset and figuring out what is the next best move can help you reach your goals sooner.
Businesses have departments
Team-based businesses have people devoted to sales, marketing, strategy, financial control, operations, quality control and product delivery.
Even if it is just you, these departments are all important. You need to devote time to each so the entire business can thrive.
It seems like a lot but some areas only require a few hours of attention each month for the payoffs (i.e. a stready stream of enquiries or money in the bank at tax time) to make themselves known.
Business owners are focused on improvements
Good ones are anyway!
How can your little business be more efficient, more productive and deliver more value to your clients?
Small changes can make big differences. For example, setting up auto-responses and creating email templates can give you back several hours each month. Another example of moving towards a growth mentality is to start outsourcing repetitive tasks so an assistant or software platform so you can focus on generating more income.
Business owners support each other
One of the things I love best about considering myself a business owner is getting to know other business owners. I can learn from them, they can learn from me and we can collaborate to share ideas.
I really love the business owner community in Australia. People tend to be very eager to share advice and be positive about their fellow business owners’ achievements. There is room for everyone and most business people aren’t in direct competition with each other so there is no undermining and a lot less bitchiness than in a traditional office.
Business owners understand the importance of brand
Having a mission and values for your business tells your clients what you are all about and helps them decide if they want to work with you.
Sharing your own can help the clients you want to work with most make a faster decision.
Of course, you can be a successful freelancer without being McDonald’s or NIKE but if you create clarity about who you are, what you offer and what you stand for, you’ll be easier to recognise and remember.
If you want to be a six figure freelancer, thinking like a business owner will help you reach your goal sooner. It may require a little more effort but you’ll learn to work smarter, not harder and the results will start to show.
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