Freelancer vs. Entrepreneur: What’s the Difference?

If you work for yourself and network with other self-employed people, you’ve probably met self-described “freelancers” and “entrepreneurs.”

For instance, I often say I’m a freelancer based on the nature of the work I do — writing and consulting for clients. But I hire various experts (like lawyers) as needed, have a business name, and maintain both a website and marketing channels for my work, just like many self-identified entrepreneurs.

In this guide, we’ll take a closer look at what some of the common differences are between freelancers and entrepreneurs. By the end, you’ll be equipped to consider where your own business falls … and decide how you want to define yourself as a professional going forward.

How are freelancers and entrepreneurs different?

The line between “freelancer” and “entrepreneur” can be fuzzy. Many people have different lists of criteria for what pertains to each type of business.

Freelancers often provide a creative, technical, or administrative service to multiple clients. Such work can range from carrying out day-to-day admin work to providing high-level management strategy. A freelancer is self-employed, has responsibility for their own schedule and benefits, and sets a rate of their choosing.

Entrepreneurs are also self-employed, but they might:

Run a full-service marketing agency with employees
Operate a cleaning company staffed by multiple people
Visit customers’ homes, offices, or job sites to practice a trade like plumbing or carpentry
Run an online or in-person boutique
Outsource or subcontract some of their work to another freelancer or company

Typically decent amounts of initial investment and risk are associated with being an entrepreneur. You might need to lease a building, buy equipment, or pay for a team of employees. To fund your expenses as an entrepreneur, you may seek investors or take out loans.

Ultimately, though, there’s no single litmus test for being an entrepreneur. A freelancer who’s committed to building a business around their craft can call themselves an entrepreneur, too.

Are independent contractors entrepreneurs?

“Independent contractor” is a formal term for someone who’s working on a freelance basis for their clients. While you may personally identify as an entrepreneur, there could be situations where you’re considered an independent contractor for tax and legal reasons. You could also be called a “vendor” by your customers whether you’re a freelancer or an entrepreneur. A lot of these language differences have to do with how your customers have their purchasing and ordering systems set up.

Are solopreneurs freelancers?

Solo entrepreneurs, or “solopreneurs," can range from one person who’s running a small online e-commerce store to an individual who provides a strategy consultation service to businesses. All kinds of self-employed people consider themselves solopreneurs. Ultimately, you can choose the term that best aligns with the way you view your work and role.

Key similarities between freelancers and entrepreneurs

Whether you identify as a freelancer, a solopreneur, or an entrepreneur, you’re still your own boss and engaging in some type of business model. As a result, freelancers and entrepreneurs often encounter some common requirements and shared experiences, including:

Registering your business and reporting with your country’s tax authority
Maintaining social media channels for marketing to new clients
Engaging in professional development
Creating and maintaining a website
Outsourcing specific tasks to other professionals
Pitching business ideas and projects to potential customers
Paying self-employment or small business taxes
Being responsible for your own schedule and work-life balance
Working to generate new business on a regular basis
Getting comfortable with important decision-making related to money, expenses, hiring, and more

Pros and cons of freelancing vs. entrepreneurship

Each way of working has some unique pros and cons, too.

	Pros	Cons
Freelancing	Freelance work is typically easy to start using your legal name and personal brand Formal business registration could be optional depending on where you live You can set your own schedule You get control over which clients you work with Freelancing works well for full-time work or as a part-time side hustle You can set your own freelance rates	Depending on your business model, you may not be able to obtain loans and investment funding Your freelance income may depend entirely on your ability to complete a specific volume of hourly work Freelance contracts can be short-term, requiring you to find a continual pipeline of new customers
Entrepreneurship	You can run an online business or a brick-and-mortar store You can often set your own rates and schedule Some startups may be able to get funding via loans and investments Your income may not require you to directly complete hourly work (i.e. you may have employees, make digital products, or sell physical goods)	Some businesses may require an upfront financial investment The price you can charge for some physical goods may be capped by the manufacturer You may need to achieve a certain level of business growth each year to stay in business

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Know, though, that not all freelancers work on an hourly basis and not all entrepreneurs have a team of employees.

Important skills for freelancers and entrepreneurs

Regardless of how you name or structure your business model, it’s important for self-employed people to know how to:

Handle scheduling and project management
Talk to potential customers and clients
Build a personal brand on LinkedIn or other social media channels
File the right legal and tax paperwork for the business
Pay for business expenses and maintain personal income

Luckily, you don’t have to figure everything out on your own. Other freelance business owners and entrepreneurs in your network can provide mentorship, and you can directly hire consultants and professionals with specific skills. You get to decide what you do and don’t want to tackle in your own business.

For example, I’m pretty good at maintaining websites and of course writing content, so I do all of those activities in my own business. And my business finances aren’t too complex, so I’m comfortable balancing my books every month.

But I have no interest in managing my own taxes, so I hire an accountant to help me with tax filing every year. I hired a lawyer to make my contracts, and I’ve engaged freelancers over the years as needed — including illustrators, graphic designers, and business consultants.

(You can hire your fellow freelancers and entrepreneurs, too. The process is simple: create a client profile, define your needs, write a job post with the help of Uma, Upwork’s Mindful AI™, and get clear proposals from qualified freelancers. The process is even easier if you sign up for Business Plus and get access to additional Uma features like instant interviews.)

Grow your freelance career with Upwork

Whether you’re looking for your first freelance job or want to make the first hire to help grow your business, Upwork is the place to start. Sign up or log in today to explore jobs, consult with clients, post a job for your startup, and more.

This article is intended for educational purposes and should not be viewed as legal or tax advice. Please consult a professional to find the solution that best fits your situation.

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Freelancer vs. Entrepreneur: What’s the Difference?