14% of the entire UK workforce consists of independent professionals, contributing £109 billion to the UK economy, according to the latest figures by IPSE. There were 1.91 million UK freelancers in 2015, a rise of 36% since 2008; and freelancers now account for 6% of the UK workforce.
Contractors, freelancers and entrepreneurs will have a chance to get together and share experience, knowledge and inspiration on 9 June 2016 when the Association of Independent Professionals and the Self Employed (IPSE) organises the National Freelance Day, a celebration in support of the enterprising individuals who took the step to start on their own.
More details about the event and how to get involved can be found here.
If you’re reading this post you’re probably in the mindset of setting up your own business or certainly considering to do so in the future. We’ve identified several ways to start on your own and here are the differences in personality and aspirations that would help define your path to business.
Are you Entrepreneur?
This is a vastly popular term used by increasingly large number of people worldwide who choose to break off the corporate chains and explore what they can do best – prioritise, experiment, risk, learn and win. Some terminology variations for this business type include solopreneur, e-preneur, lifestyle-preneur, mom-preneur or even want-a-preneur – depending on their strategic focus.
Entrepreneurship is often associated with a state of mind and inherent personal trait rather than a professional occupation. Entrepreneurial individuals are extremely focused and driven, value freedom and independence, and focus on achieving quick results and business growth.
Successful entrepreneurs have a strong business acumen. They understand their particular niche in great detail which facilitates the quick evaluation of new information and speedy business decisions. The sound judgement usually results in effective strategic moves, although entrepreneurs are prone to taking risks, and learning from success and failure alike.
They like to envision, oversee scenarios and devise strategies to keep them a few steps ahead of competition. They’re always forward looking, positive and on the hunt for future opportunities.
Being effective communicators, they liaise, coordinate and delegate tasks to achieve efficiency and optimisation.
Entrepreneurs thrive in starting up with scarce finance and growing a self-sufficient profitable entity at speed. Scale and efficiency makes their achievements attractive to investors, and sale is among the common scenarios that follow a successful business case.
The key difference compared to freelancers and contractors is, as Seth Godin says, building long term money machines with value on their own, regardless of the individual. Their ventures make money for them while they sleep.
Does this sound like you?
These personal and professional traits are essential for highly focused individuals pursuing concrete goals and results, however, by no means isolated to entrepreneurs only.
In varying degrees, these are must-haves for any type of business owner aspiring for professional achievements and business success.
Freelancers are independent workers that work with multiple clients and usually on more than one smaller project at a time. This stems from the industry characteristic they tend to service. The majority of freelancers are in the creative industry and the arts; over 50% of freelancers are writers (copywriters, journalists, PR, script writers and fiction writers) plus many more freelancers in other visual arts such as photography and music.
Freelancers are characterised by their tenacity as they rely solely on themselves to win business; the majority of freelancers don’t use agencies to secure contracts and they rarely delegate work to external parties..
Freelancers enjoy the benefits of choosing their work and keeping the best gigs for themselves. They rarely outsource or delegate work to external parties. The beauty of their jobs is in its completeness, personal touch and dedication. Freelancers work for themselves and are their own brand. This means being excelling at their own specialty is a must for their future success. Building reputation takes time and commitment, while long-term relations prevail over interest in individual projects.
Freelancing is rarely associated with aspirations for growth and big projects – they enjoy gradually building up relationships with clients to increase their revenues up to a level that still allows them to maintain a healthy work-life balance. A freelance business is self-funded without external investment, it’s a hobby for life and not a highly profitable business in the traditional sense.
Freelancing can be a flexible way of working (providing you have the financial means to work less) as the projects are smaller and the working patterns are set by deadlines rather than a contract. For many freelancers, the hours can be long or unsociable – journalists and photographers are prime examples. It takes dedication and hard work to build a freelancing business until you have a solid client base to work with.
The catch with freelancing is that, unlike entrepreneurship, the business is entirely related to the individual at all times. Any period of downtime directly impacts their accounts and unscheduled breaks could potentially harm the business. Freelancing rarely provides firm financial stability.
Professionals engaging in this as a main occupation need to plan ahead for eventualities and have a strategy to smooth out the gaps in their cash flow stream during quiet times. These are some of the reasons why freelancers take up this option in addition to a full-time job, while travelling or taking care of children. It’s often meant to provide an additional source of cash as opposed to a major income stream.
If you still don’t recognise yourself in this profile, then perhaps you are…
Contractors are experienced professionals who work independently with bigger businesses. They are usually hired to fill a skills gap in a large organisation where budgets are not enough to employ full-time staff.
These professionals share common characteristics with freelancers but are more focused on generating steady revenue streams through various longer-term contracts rather than short projects. While freelancers might be working on several projects simultaneously, contractors would usually focus on one contract at a time and work on it for a longer period. They often engage an agent to keep their pipeline full and secure the next project once their current job is completed.
Unlike permanent employees seeking long-term stability from one employer, contractors have made a clear career choice to drive their own professional development as an alternative to a permanent employment. Job satisfaction is important, however, existing knowledge and skills, and opportunity to achieve more profitability and tax efficiency are the primary reasons to be in this business.
They’re not pursuing growth or investment. While entrepreneurs value the inputs of the different business functions for optimisation, contractors are well-versed in delivering all aspects of a project and don’t rely on external professionals to assist with their task. They also tend to seek variety and apply their existing knowledge in different industries, whereas entrepreneurs usually focus on the same industry to pursue growth.
Similar to freelancers their name usually represents their own brand, although normally their limited company exists as a separate legal entity.
To counter potential illegal practices, it’s important to have a clear contract in place between the contracting business and the client, as opposed to the contractor as an individual. Contractors need to be able to demonstrate their identity as a business. During the execution of the project contractors enjoy a large degree of independency, which is key, not only from personal, but also from legislative perspective.
If this still doesn’t match your professional description, then perhaps you are a…
For some, flexibility and ease are the most important aspect of working for yourself; usually to ensure that there is a good work-life balance. Many new parents looking to return to work, or full-time employees looking for additional income pursue home-based franchise opportunities.
This is a good option for flexible workers that are more risk-averse and want the support of a proven brand and company behind them. The franchise market is growing in the UK with a huge variety of franchise opportunities from 930 franchisor brands; from swimming instructors and beauty product vendors to restaurants, 561,000 people are employed in UK franchise businesses.
Franchisees want to build their own business, have flexibility around their other commitments and be a part of a well-respected brand. Becoming a franchises usually involves some form of investment and in return the brand provides stock, training and their marketing clout.
The business skills often developed within the franchise business can lead to further independent working – starting a fully-fledged independent business.
Small business owner
Small businesses sometimes originate from expanding contracting businesses, or , or expanding a freelance discipline to a wider resource pool. They’re often family-run with a small team of external employees. Small business owners might have started as entrepreneurs, on their own or with a partner, exploring a market opportunity and fitting skills from previous jobs. They usually require some form of initial investment to start and reach a comfortable size, however, a skyrocketing growth is not the aim.
In the end, who are you?
The path you choose to pursue your business goals will largely depend on the current market opportunities, your financial position and your attitudes to risk, perseverance and free-time. Each approach has its own pros and cons and your own circumstances will define what fits your professional and personal goals best. Are you ready to take the step forward? Find out more about the two events kicking off this week and how they can encourage your business endeavours.
More on the Global Entrepreneurship Week 2015
Contractors, freelancers and entrepreneurs will have a chance to get together and share experience, knowledge and inspiration during the Global Entrepreneurship Week (GEW) 16 – 22 Nov 2015. It’s the world’s largest festival of entrepreneurship – a worldwide initiative with a mission to inspire and encourage people to explore their talents for business and innovation.
The GEW campaign started in 2008 in UK as Enterprise Week and for the last 6 years it’s gained popularity and recognition globally. This year for the 7 days between 16-22 November 2015 activities and events will take place simultaneously in more than 140 countries around the world with over thousand events across the UK alone.
The nature of the initiative is quite versatile. It connects people of various personal and professional background to entrepreneurs ready to share their experience and offer opportunities for start ups.
This year’s motto is Make it Happen. The initiative aims to encouraging you to be more entrepreneurial and seize the opportunity. Do so it a single step – network to get feedback on your idea, update your skills on a training course, or and find a mentor – just Make it Happen during the Week. If you’re a tweeter and use the #GEWMakeit hashtag, you’ll probably find plenty of inspiring ideas on social media.
In the UK the Global Entrepreneurship Week is hosted by Youth Business International (YBI) who are a global network dedicated to helping young entrepreneurs get started in business.
The National Freelance Day 2015
The National Freelance Day is nationwide event designed to encourage discussions and find solutions to issues faced by self-employed professionals. It aims to support enterprising individuals and unlock their potential for developing the right business skills, aptitude and agility for sustainable growth. Headline events this year will take place in London today, 12 November 2015. For more information on the events, visit http://www.nationalfreelancersday.com/ or join the debates online with the #NFD2015 hashtag on Twitter.
In the meantime, take a look at this fun infographic showing the Evolution of the entrepreneur over the last several centuries and follow us on Twitter @inniAccounts and LinkedIn to hear first when our next post comes live!
Start up with confidence. Download your free book
"I really wish I had access to this book when I first started - I highly recommend this for any early business owner"
Start your company with confidence by reading our best-selling book "Preparing to Set Up Your Limited Company" which is now available for free. Simply enter your details below and we’ll email you your copy, instantly.