Freelancer vs. Business Owner: An In-Depth 11-Point Comparison

After we compared the difference between freelancing and an office job, it is time to jump in and make a similar comparison with having your own business.

Freelancing and running a business are very similar in many ways. They both provide freedom up to a certain point, and flexibility depending on work availability and urgency.

It is imperative to learn about your options before you decide which path to take. Do you want more independence or you want to have your days off according to your needs?

Let's explore Freelancing vs Owning a Business.

Comparison No. 1
Level of Independency

The freelancer has a satisfactory independency about when to work, the decisions he makes at work, and fixing any issues on their side. They are independent of having a set location, and can provide their services online.

The business owner is tied to his work. Every decision gets approved by him, and it's quite hard to be independent about the work hours.

You are fully independent about your salary as it will be paid based on your growth as a company. You will stick to the routines you set for your business, and clients can help you improve your methods by providing their feedback.

Comparison No. 2
Time off and Vacations

I know many businessmen and all of them find it hard to relax. They always think about their businesses.

They might worry about how to motivate their workers, how to expand their reach, or communicate an important goal. It's understandable because a business is like a "child", you create it, and at first it is very small.

Then it starts growing, and you see the progress every day and month. Having this in front of your eyes, it is hard to take a break.

Even if you want to relax and enjoy a holiday, it's likely that you bring your work with you. A business is part of your life, and you can't just ignore it and live as if it doesn't exist.

Freelancing is about finishing a job before a set deadline. Once you are done for the day, you can forget about the project until the next morning.

Whenever you need time off, you take it and it can be a longer holiday or a staycation, according to your preferences. During that time, you don't need to worry about work or deadlines, as you

Comparison No. 3
Opportunities to Grow

When you are freelancer, you can grow in your field. But if you become too good, customers are inevitably going to come back and become loyal.

Once you establish your skills and expertise, you will have repetitive tasks from the same or different clients. Doing the same tasks over and over again can limit your opportunities to grow.

As a business owner, the growth in different areas is unlimited. You can develop and sell a service or a product. Then you can expand your skills in becoming better promoting it.

You can grow in making your product even better, and learn how to effectively communicate with a variety of people to help you expand you reach.

Comparison No. 4
Personal life

Working on your own terms with clients will let you make a schedule that fits yours and your family's needs. The business that you are helping out is not yours, and you don't need to worry about any of the other aspects of its existence.

Your job is to complete your assignments before the deadline expires, and then you are free to go and enjoy time with your closest ones.

It is more engaging when your own the company that you work for. All the responsibility about reaching the goals and making profit is yours. It can be hard to pay enough attention to kids and your partner when you are busy and focused developing your business.

Comparison No. 5
Financial Situation

People who offer their services per piece can achieve significant results once they are known and recommended by returning clients. Their finances depend on their ability to meet high quality and timely delivery.

There is a set amount and limit on your earning. You choose your rates, but you can increase them up to a limit set by the average price for your service on the market.

For example, if you are doing data entry, and the average is roughly $20 per hour, you can charge $23. Your rate will depend on your experience and confidence in the job. However, you shouldn't set it above $30 as this will leave you with fewer customers.

When you have your own brand, their is no set limit on your salary. As you become more and more popular, your profit will increase. You are paid for your results, and the hourly rate is measured by the popularity and positive reviews of your company.

Comparison No. 6
Who sets the rules?

The rules are in the hands of your clients when you work per completed task. They provide you with specific instructions, and you need to adjust your work to their business requirements.

In some of the freelancing platforms you can create projects and showcase your work samples. What you transform them to is dependent on companies' needs.

In a business environment, the rules are set by the managers and the owners. As you possess the business, it's up to you to follow a certain direction or not.

It's a sense of power than comes by controlling the entire organization. Of course, you still have to adapt and cooperate with other businesses, but the feeling is different as you both have the same structure (registered company).

Comparison No. 7
Keeping Deadlines

Deadlines are very strict for the remote worker. If you miss a deadline without any valid reason, your reputation will suffer.

It is stressful to have a certain term, and even if there is plenty of time to fulfill your tasks, it feels psychologically demanding.

As the owner of a company the deadlines are vague. You can grow quickly or slowly, based on your tempo.

You can also work more when you are most productive, then choose to slow down when feeling overwhelmed.

As long as you keep going, the pace can fluctuate. If you are passionate about your business goals, you will want to speed things up, even if your capacity for handling all tasks is insufficient.

Comparison No. 8
Risk involved

While both freelancing and having a business involve risk, it appears in a different way. The risk of being left without a job is real for a remote worker, when a project ends.

The pace the world is changing is faster, and projects are created and disappear when a better opportunity pops up. Since you are working for clients, you depend of them for your salary.

Business owners create their opportunities, and the person who provides their salary is themselves. The risk is related to bankruptcy, investing in a non-profitable venture, and losing money.

Comparison No. 9
Legal differences

The laws vary from country to country, but generally, the freelancers can provide their services without any registration. They can choose to register, but this is not always necessary.

Companies have to be registered by law and all documentation should be presented to calculate the owed taxes. For bigger organizations, hiring an accountant is a must.

It will not only help for managing your income and expenses, but it is also required legally for certain types of businesses depending on their size and profit.

Comparison No. 10
Confidence in Communication

Confidence is an important skill for freelancers, and they usually use it to their advantage when negotiating with their customers. Your belief in yourself might suffer if you receive negative remarks about your work.

As your career is devoted to customer satisfaction it might be hard establishing at first if your experience in the field is scarce.

Company owners are very confident and relaxed about their communication with people. Running an business gives you the knowledge how to talk with others and help them and yourself grow.

Comparison No. 11
Who do you work with?

Freelancing allows you to choose your projects from the variety on the market. The situation is slightly different if you are working in a team with other freelancers.

In a company providing individual contract to their contributors, you don't get to choose the team you collaborate with. It's the decision of the organization to select the best fit based on qualification criteria.

In case you have a conflict with any of your teammates, it gets resolved by notifying the appropriate department within the company structure. It can take time to investigate and resolve the issue.

If you are running your own business, you choose who you work with. Small businesses can interact with people that inspire them and help them grow.

If a particular business partner fails to perform up to your standards, you can negotiate and make a switch. If a client is creating more trouble than profit, you can disengage and handle the situation on your own.

No matter which path you take, keep in mind your character traits and what would make you more fulfilled. Both undertakings are initially complicated, but with time you learn how to operate them smoothly.

I have tried both ways, and currently, I am juggling freelancing projects with making business and raising my child. It is overpowering, but at the same time rewarding to know you are creating a life of value for yourself and your family.

Working online is the future, regardless of the form it takes. We should learn to conform to the new circumstances, and that will help us be successful and content.