Freelancing is a wonderful way to be your own boss while earning an income. However, many freelancers aspire to grow their businesses by pursuing entrepreneurship.
Entrepreneurship can open the door to a variety of new opportunities and business partnerships. On the downside, entrepreneurship also tends to be much more stressful and time-consuming at the beginning.
This can seem like a difficult proposition; however, there are five key steps you can follow to successfully move from freelancer to entrepreneur:
- Know the difference between freelancing and entrepreneurship
- Create a business plan
- Learn how to scale
- Keep a growth mindset
- Look for funding
Each of these steps has its own unique challenges, and it can take a while to learn how to implement all of these consistently. By focusing on these key areas, you will be able to start the transition!
1. Know the Difference Between Freelancing and Entrepreneurship
The line between being a freelancer and an entrepreneur can sometimes be a bit blurry. After all, both freelancers and entrepreneurs are working for themselves.
The difference between freelancing and entrepreneurship is that entrepreneurs take on more financial risk for the sake of profit. As a result, an entrepreneur’s business is able to run around the clock, meaning their business runs even when they are not present.
This results in many benefits for the successful entrepreneur, including greater financial success, more personal freedom that all freelancers love, and the ability to focus more of your time on growing your business rather than simply generating income to operate it.
However, as you would imagine, these benefits are not instant. Instead, they require extensive planning and effort to acquire. Thus, it is important to look at some of the most central tasks you will need to accomplish to go from being a freelancer to an entrepreneur.
2. Create a Business Plan
The first step you should take when transitioning from freelancing to entrepreneurship is to create a business plan. This will help you create a roadmap of your business’s direction over the next few years.
One great way to get started on your business planning is to set clearly defined goals. Once you can articulate the purpose of your business, you will find that you can better communicate its value to future customers, investors, and partners.
According to Investopedia, a good business plan includes an executive summary, products and services, market analysis, financial planning, and a budget. However, depending upon your type of business, you may want to add additional components such as a marketing strategy or map of your organizational structure.
When working to create a business plan, it can help to have a seasoned professional look it over. This is great for identifying issues that you may not have considered. You should also consider asking a mentor to take a look at your plan and provide feedback. This can be a great way to ensure you are well prepared for your new endeavor.
3. Learn How To Scale
When it comes to moving from being a freelancer to an entrepreneur, your time is by far your most important asset. Effectively managing your time requires that you are able to learn to scale your efforts.
While there are many things that go along with learning how to scale, three of the most important things are streamlining processes, outsourcing busy work, and improving productivity.
A key aspect of scaling your business is learning the different ways you can streamline your current processes. In reality, there is an entire line of literature aimed at different ways to do just this. Therefore, spending some time learning how to identify which processes to target and how to improve them will pay dividends.
One great way to streamline your processes is by using project management tools like Trello, Notion, or Asana. Once you see the various steps you complete when helping your clients, you will be better able to see which areas you might need help in. These can be parts of your process that are time-consuming, need expert help, or you simply don’t enjoy!
Outsource “Busy Work”
An entrepreneur’s goal should be that their actions all contribute added value to growing their business. With today’s automation technology and the rise of virtual assistants, there are more ways than ever to outsource dreaded busy work.
One of the ways that I was able to do this for my business was by learning how to outsource work. Outsourcing work can save you time and money, both of which are often in short supply for new entrepreneurs.
As your business grows, you will find that many things can keep you distracted. Finding ways to stay productive as a new entrepreneur will be key to ensuring your growth is sustainable.
When new entrepreneurs struggle with this aspect, it can often help to revisit their vision and mission, using those statements to guide their daily plans. You will also find that you need to be intentional about acquiring the business skills to help you grow your business.
You might find that you work much less than when you had a 9 to 5 or while freelancing. This isn’t necessarily a bad thing, as long as the time you are putting in is of quality. However, if you find you are wasting time or even going full days without working, it may be time to build a more structured routine or find an accountability partner.
4. Keep a Growth Mindset
In both personal finance and business, you will find that mindset is everything. A growth mindset involves taking personal responsibility for your success and striving to focus on your own professional development and growth. People with a strong growth mindset tend to analyze failures for important lessons that can help strengthen their practice.
There are many ups and downs on the road to entrepreneurship. Research has consistently shown that a growth mindset is key to success. In fact, many universities even spend time trying to cultivate this characteristic in students now. As you develop your growth mindset, you’ll find that you are more resilient and able to adapt to changes in the environment more quickly.
If keeping a growth mindset is something you struggle with, there are many ways to develop one. In fact, a growth mindset is something people tend to work on strengthening throughout their lives and careers, part of being a lifelong learner.
5. Look For Funding
Growing from a freelancer to an entrepreneur certainly takes planning, time, and energy. However, this is one other important thing necessary for the recipe as well – money. For many people, this may be one of the more difficult aspects to attain, requiring planning and considering the different opportunities.
There are many ways to help fund your new business. Some people prefer to ask friends and family to invest, which can be a great option for finding reasonable payment terms. That being said, most people prefer to apply for business grants or loans so that they do not run the risk of mixing their personal and professional lives.
Check out resources like the Small Business Administration, and your state/local governments for available grants. Grant funding is the best because it is free money you can use to start your business!
Of course, one of the most traditional methods for acquiring funding for your business is through a small business loan with a bank or credit union. This is one of the ways your research into your business plan can really pay off, as this will be a key component used by banks to evaluate your application.
Final Thoughts on How To Go From Freelancer to Entrepreneur
Many people strive to grow from being a freelancer into becoming an entrepreneur. It is a task that takes time and effort but is also incredibly valuable once you succeed. If you are hoping to walk down that path, keep these steps in mind as you begin your transition.