There is a distinct difference between being an entrepreneur and being a freelancer, and this is something I think anyone who is considering starting a company or venturing out on their own should think about carefully before proceeding.
I should start with the disclaimer that the career of a freelancer is no less challenging, virtuous, or in any way inferior to that of an entrepreneur. Surely, the challenges facing an entrepreneur (everything from legal aspects to accounting and finance issues to marketing and so on) are also faced by the freelancer. However, the main goal of an entrepreneur, and this cannot be stressed enough, should be to work on their business, not in it.
In my mind, the definition of a company is "a system that delivers value to the consumer in exchange for value back." The value delivered to the consumer can be any product or service (a smoothie, superior investment returns, bookkeeping services) and the value back to the company is usually monetary. An entrepreneur, then, is someone who works on creating this system and furthermore constantly improving and growing this system. This means as an entrepreneur you are not compensated on a hourly basis for the work you put in; you should instead be constantly be working to improve the operations of your company by designing, updating, and implementing more effective and efficient ways to get things done in order to deliver value to the consumer in the best way possible. This is why being a freelancer is not akin to being an entrepreneur. By definition, a freelancer is compensated for the hours they work to provide a service, or even a fixed amount they receive to complete a project. Nevertheless, their compensation is contingent on them putting their own time in. Whereas an entrepreneur should ideally be able to perfect a system that pulls in cash without them having to spend any amount of time working within the operating structure of the system.
You will see me refer a lot more to thinking of companies as "systems" in the future. I think this is the best way to go about envisioning a start up, and from there hopefully expanding it and succeeding. I would love to get your comments on any of this!
