By Michael Luchies, Entrepreneur and Writer
Entrepre….freelancer. I still do it.
As I type or say the word “entrepreneur” when referencing myself and what I do…I cringe. I’ve intentionally avoided it by calling myself an “entrepreneurial writer” or by saying I’m self-employed.
I have a degree in entrepreneurship, have a business, and support myself through several different activities and clients, but I still feel like I’m a freelancer living in the body of an entrepreneur. It has nothing to do with my mindset, but the product of my actions and efforts. I’m not shying away from the entrepreneurial path and I’m very proud to pursue entrepreneurship, but I know deep down inside that I’m not truly an entrepreneur…yet.
This is a similar struggle to what many small business owners and entrepreneurs go through when attempting to grow their business. They aren’t transitioning from freelancing to becoming and entrepreneur, but they are going through a transition — from small business owner to the entrepreneur of a growing, high-powered business.
I recently had the opportunity to speak with Jon Godwin, CPA and Founder of Godwin Start-Up School, to discuss how freelancers can successfully transition into becoming an entrepreneur. Both Jon and I agree that mindset and making an intentional shift into entrepreneurship from freelancing is the primary action we need to take to accomplish the shift. However, there are several other missing ingredients that his comments helped me become aware of, and also apply to entrepreneurs looking to grow their small business. Here is a list of 7 important activities and aspects of moving from freelancer to entrepreneur.
– Determine if Being an Entrepreneur, Growing Large is a Path you Desire
There are certainly benefits to turning your freelancing activities into a business, but there’s no one forcing you to become an entrepreneur if it’s what you don’t want. Freelancing can be extremely rewarding and sustainable if approached properly.
Entrepreneurship doesn’t happen by chance, it takes intentional actions and smart decision making. Some of the world’s most brilliant inventors have failed because they tried to turn they didn’t truly understand what it took to turn their creations into a business.
Jon Godwin says: “Decide if being an entrepreneur is the path you want to take. Being honest with oneself here is very important, as it can mean the difference between success and failure in business. There’s nothing wrong with remaining a freelancer, if that is the decision you make purposefully.”
– Accept that Skill isn’t Enough
Take any of your favorite entrepreneurs, actors, athletes or musicians. Even in these highly specific occupations, those that stand out and rise above the rest rarely have only that skill to rely upon.
You may be one of the world’s best dribblers, but you can’t make it in the NBA unless you have other skills that help your team succeed. You need to be able to pass, have great vision, be able to play defense, and be an effective shooter.
Realizing this is just a small step, but a big one is important. “Freelancers struggle with the notion that technical knowledge and skill isn’t enough to make it all the way to entrepreneur territory. Having the courage to let go of that one notion is what differentiates a freelancer from an entrepreneur,” says Godwin.
– Be Willing to Outsource and Hire
Piggybacking on the concept presented in the previous section about celebrities who need to be multi-faceted – they also are smart enough to outsource things that other people are better than them at. Michael Jordan didn’t start off designing shoes for Nike. Many of the greatest books by celebrities are written completely by ghostwriters.
Getting other skilled people to handle other parts of your business is a key to getting more down and making sure each aspect of your business is being handled by an expert in that area. If you aren’t passionate or skilled in marketing but have to do it for your business and decide not to outsource, your efforts are likely to be just a fraction as effective as those of someone who loves marketing and is one of the best in their field in it.
According to Godwin, There can even become a point in your business when the whole reason you started the business is what you need to give up. “An entrepreneur is prepared to outsource the very technical skill that got her started in business to further the vision of the business. A freelancer is heavily dependent on her skill to make money, and doesn’t yet understand how important a team can be to growth and success. An entrepreneur knows, even though she may not be comfortable with the knowledge, that it may be necessary to cut ties with the very idea that started the business in order to make the enterprise successful.”
– Forecast the Future
“Successful entrepreneurs can look into the future through the lenses of realism, not unbridled optimism or pessimism. Freelancers are often too busy to look into the future, since keeping up with the present is all they have time to do,” states Godwin. You may not be a fortune teller, but as an entrepreneur, you need to be able to forecast what’s coming. If you’re only being reactive when it comes to your business, you’ll be a couple of steps behind companies that can anticipate changes in the marketplace and how their business can capitalize off of those steps.
– Find a Coach
Regardless of how unique what you do is, there’s someone that has done something similar before. First-hand knowledge from someone who has experienced what you’re going through can help catapult you and your business past potential roadblocks. Entrepreneurs are excellent networkers, not because of being outgoing, but out of necessity and the tremendous benefits of having an extensive network. “Freelancers are inclined to work alone, head-down; entrepreneurs consider the larger picture, including the help of expert outsiders, in allowing them to further their vision,” says Godwin.
– Separate Personal and Business Revenue and Expenses
I neither had the time nor did I think there was a reason to separate personal and business revenue when I made $2,000/month as a freelancer, but it’s just as important whether your freelancing work is bringing in $2,000/month or $200,000. Not separating income and expenses overstates your income, meaning you’re earning even less than you should at $2,000/month. If you aren’t accounting for those $20 lunch meetings and writing off expenses, you’re losing money.
Successful entrepreneurs make the most out of available funds, so don’t neglect the accounting and bookkeeping sides of your business just because you think you don’t need to worry about it yet.
– Turn Services into Products
Freelancers often work on a per-hour basis. I used to charge $35 an hour because I thought that was more than fair and a nice compensation for my work. The problem is that not all of the work you put into your business is billable. If I only had 10 billable hours in a week, I might as well have quit to work a $15/hour job to make more money. Business, even service-based businesses, sell products not hours of work. Package what you do!
I now offer monthly packages which ensure I’m being properly compensated for all of the work I’m putting in. It also allows me to provide specific progress reports and promise deliverables to my writing clients.
What can you do today to grow your business beyond where it is?