Employment, as we’ve come to know it, has changed drastically in the past two decades. Nowadays, people are free to work wherever and whenever works best for them. One of the results of this trend is the rise of dozens of names and titles that seemingly describe the same thing: freelancer, entrepreneur, self-employed, and so on.
While all these terms have come to refer to someone not employed in the traditional sense, they do have their own definitions and differences worth understanding. First, let’s start with simple definitions.
The Definition of Self-Employed
Working for oneself as a freelance or the owner of a business rather than for an employer. ‘a self-employed builder’ – Oxford Dictionary
Think of self-employed workers as anyone who calls themselves the boss of their business. If you get to decide which hours you work, what you work on, and how you work on it, you’re self-employed. Entrepreneurs, business owners, and startup founders can fall into this category.
It’s not uncommon for a freelancer to refer to themselves as self-employed on government documents or client negotiations. In this context, self-employed simply means “not traditionally employed”.
Examples: Daniel owns a business fixing up broken computers. Lisa runs her own service coaching people within their career. Both would be considered self-employed.
The Definition of Freelance
Self-employed and hired to work for different companies on particular assignments. ‘a freelance journalist’ – Oxford Dictionary
Freelancers, or contractors as they’re also known, are also self-employed. The main difference is that freelancers take on a variety of jobs from a variety of clients. While self-employed, you can typically focus on doing the same work and make money off products or services you sell, freelancers may drift from client to client, one day working on a webpage, another day working on an ad.
Examples: Joe is a freelance programmer. Last month he was designing a website for a client, this month he’s working on a different client’s app. Melissa is a freelance writer- she may be writing press releases for a client one day, and writing blog posts and articles the next.
The Similarities Between Freelance and Self-Employed
For the most part, both self-employed and freelance workers get to enjoy a certain level of control over their work. Both get to decide when and how to work. A freelance writer has freedom in the words they choose and sequence, while a self-employed business owner has freedom in running his business how he pleases.
When tax season rolls around, both the freelancers and self-employed people will have to fill out Form 1099. You can find a copy of Form 1099 on the IRS website here.
Both freelancers and self-employed people have the ability to express themselves through their work. For the self-employed business owner, the control is over what kind of business the brand works on. For the freelancer, they have the freedom to choose which clients they want to work with. Traditional businesses don’t always have the ability to choose who they work with.
The Differences Between Freelance and Self-Employed
Level of Control
While both freelancers and self-employed people can choose how they work, the freelancer doesn’t always have the ability to choose what he works on. He can choose the clients, but at the end of the day, the client chooses the project and sets the expectations.
Freelancers are always self- employed, but self-employed people aren’t always freelancers. They may own a business or startup, and focus primarily on a certain line of work. Titles matter even when people pretend they don’t – self-employed may connote a sense of individualism and achievement, while freelance might imply one works for multiple clients and is not necessarily dedicated to one.
Speaking of dedication, freelancers and self-employed people differ greatly on who they deliver their work to. Self-employed people are loyal to their own business’s work, and to the customers that purchase their product or service. Freelancers tend to drift between clients, so if one relationship sours, he must find a new one (potentially abandoning the project he’s been working on with the previous client). Check out our previous post on building trust with your clients and customers.
Which One Should I Call Myself?
At this point, you may wonder- what should I refer to myself as? Well, that is entirely up to you. No one will bat an eye if you call yourself self-employed when you’re a freelancer, and similarly, you can consider yourself a freelancer at times when you’re self-employed. What you need to think about is the connotation.
Freelancers have a certain reputation for working on several projects. Ask yourself- is this something you want your clients to know? Do you want to emphasize the fact that you work alone, and perhaps on multiple projects at a time?
On the other hand, self-employment can mean a number of things: from business owner to freelancer, it’s simply an umbrella term for anyone that pays themselves through their own labor. That can be helpful if you want to give off the idea that you are independent and autonomous.
Ultimately, the choice is yours. Either way, it’s not about what you call yourself, but how you do it!
For more guides and resources for businesses, entrepreneurs, and freelancers, visit Novel Coworking’s blog today.