Making the Move from Freelancer to Entrepreneur

January 7, 2021

There are certainly more ways than ever to capitalize on creativity and monetize your skills. The freelance economy has allowed for expertise to be commoditized and monetized across a wide range of verticals. Freelance marketplaces like Upwork and Freelancer have allowed Freelancers to make decent money. However, what happens when you are ready to turn your freelancing work into a serious business? Are you ready to take the leap from being a freelancer to being a business owner?

Taking the leap

The key to understanding the difference between being a freelancer vs an entrepreneur is that running a business requires more than just a technical knowledge of your craft. Being a technical specialist is only part of the puzzle. Creating a company vision, managing the direction of your business and making strategic decisions are what become your daily priorities once you make the transition.

The Mindset Shift

Not only does making this transition affect the tasks that you will carry out on a daily basis, it must be complemented by a mindset shift that powers something greater than yourself. Instead of thinking on a project by project basis, you must begin to look at your business holistically.

When you lead with confidence, and think about the collective vision for your business when conducting daily activities, you think differently. A freelancer primarily views themself as a source of labor; a business owner views him or herself as a source of value.

You begin to understand that all your business functions must complement one another in a symbiotic fashion. Planning sessions, strategic decision making about what to tackle next, and what bigger initiatives to pursue become the focal point of daily output.

The Process

The transition process from freelancer to entrepreneur can have many phases, but it is simple to think about it in a 4 step process.

  1. Incorporate Your Business
  2. Establish your brand
  3. Build Your Team
  4. Scale it up

In paving the way towards incorporating your business, productizing your services is probably the path of least resistance. You have a set of skills you have already been operating with and providing services for. By synthesizing the common threads amongst the clients you have provided these services for, you should be able to productize these services and package them into an offering that can be sold without the need for your 1-on-1 time commitment.

A productized business can scale and grow over time. It does not require you to bill man hours like traditional freelancing does. Divorcing as much of your time away from 1-on-1 client service delivery is the key to making a successful transition. To do this, reverse engineering what the customer actually needs in relation to a particular problem is the goal. You are already serving this need with your services. Your next job is to think about how to package these services in a way that can be delivered in a productized fashion.

Think about the outcomes that are associated with the services you are providing, and how you could package together productized services to help customers move towards these outcomes for themselves, without 1-on-1 supervision. Setting clear outcomes means that your customers can be assured that their problems are going to be solved.

Establishing a brand is a long term play. At the end of the day, this really comes back to intent, and the motivating factors behind that which you are building. Start by mapping your mission and company values early on in the process. This will serve to act as your north star as you grow and build up your brand image.

Building your team is the next step. While working freelance, you were probably working 1-on-1 directly with clients and engaging them yourself. Growing a team gives you the ability to delegate critical thinking as well as repetitive business tasks. This in turn, gives you the freedom to put more time towards higher return on investment activities. Think about the roles that will give you the best chance at optimizing your own internal processes, and try to hire for these first. This will give you the luxury of freeing up time to focus on the activities that give you the most traction.

Building your team and scaling up go hand in hand. Before we think about what this will look like, it is important to break your business processes down into two main categories.

The first category is internal processes around how your different roles and functions perform their tasks and responsibilities on a daily and weekly basis. For scaling up these efforts, you'll need to focus on workflow optimization.

The second main category is the innovation and ideation around your product and service offering. As with any business, your product and service offering is never complete. There are always ways to improve, re-create, upgrade, re-package and innovate on your core offerings. For scaling up efforts around innovation and ideation, it really helps to have your efficiencies of scale taken care of for your internal processes.

So what does scaling up really look like? Well, if you have validated your idea and already have a means of productizing your service offerings, scaling up should really be about making your daily and weekly operations more efficient. Workflow optimization for internal processes should focus on setting up your team with the best practises and processes for conducting their daily tasks. These should be documented, optimized and followed. Leverage technology where possible to aid your team with optimizing these processes. Whether it is marketing and lead nurturing tools like Hubspot or Salesforce, or communication and work management software like Slack, Monday or Trello, leverage technology to make your workflow management easier for everyone.

As your team grows, you should be able to achieve efficiencies of scale with task delegation, process optimization and workflow prioritization with some of the tools we mentioned above.

From an innovation and ideation standpoint, scaling your team should also give you greater bandwidth for ideating upon and improving your product and service offerings. As we have mentioned, freeing up creative bandwidth should be a net result of optimizing your internal processes, so it is best to get this right first. Creativity can be an elusive and fragile phenomenon, but by scaling your team, you have more brainpower and more people from which creativity can flow. Harnessing this creativity can take many forms, but by optimizing your internal processes, you give your team members more time to put towards thinking creatively about how your product and service offerings can be improved upon.

All of these ways of working might be a great departure from what you do now as a freelancer, but the reward is likely to be greater scalability and revenues in the long-term. The process of going from freelancer to entrepreneur certainly does not happen in a day, a week or even a couple of months. It’s a continual progression from one to the other. By creating repeatable systems and processes for your team, it allows you to save time, brainpower, and money that can be diverted to things that serve your customers and your business better.

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