You’ve been freelancing for a minute, and you’re starting to realize, “Oh sh*t, I only have so many hours in a day. I need to start scaling.” Or “I am sick and tired of dealing with clients who act like my bosses. I need a little bit more freedom.” If you are finding yourself in one of these situations, you may be ready to transition from freelancer to business owner.
What’s the Difference Between a Freelancer and a Business Owner?
You may be confused about why there is a difference between these two positions, so let’s get super clear on what makes a freelancer and the components that make up a business owner.
First, I’d like to reference Robert Kiyosaki’s Cashflow Quadrant.
Cashflow Quadrant model is simple. Most entrepreneurs start on the left side of the quadrant, where you find two squares.
The top square is labeled “Employee.” The second square is marked “Self-Employed.”
Most people not only start in the Employee square but mainly stay in this square of life financially, which is where you can get taken advantage of financially.
The final part of the Cashflow Quadrant is moving to the right side, in the business owner quadrant.
The next quadrant on the bottom right is investor. In this position, you have money coming in passively either from investing in companies, real estate, the stock market.
If you’re an employee, obviously you’re trading time for money. If you don’t want to be in the employee square of the quadrant, then you need to start moving through the quadrant to the next square, self-employed. This is the square where most freelancers reside.
When you’re a freelancer, you’ve moved from an employee because you want to be your boss. You do have more control over your time. However, now you have to pay your taxes, as you don’t have an employer to pay them for you now. The bonus of freelancing can take deductions to lower the tax rate you pay in your business.
Next, freelancers find out the amount of the workload they must do to accomplish building a business and the limited amount of time they have to achieve their goal.
What you do with your time is even more important now because you’re still trading time for money, however, to create more income, your choices are to work more hours in a day, take on more clients, work more than five days a week.
Having clients can be stressful and time-consuming; you may be frustrated and tired with the amount of money you’re making for the time you are putting into your new business.
My Freelancing Story
When I transitioned from freelancer to business owner, I’d been freelancing for eight years, and at one point, I got tired of dealing with editors. I think what did it for me was one morning when the first thing I woke up to was an email from an editor acting like my boss.
And I was like, F you, it is December 26th. And those of you who’ve been following me for a while know that I wouldn’t say I like authority figures.
That was my first sign; my next was reaching a cap when I approached six figures. My workload was overpowering me, I needed more freedom, more scalability, and I needed less writing work.
I started the transition in 2017, and I want to share with you the steps you can take to get out of this transition phase.
What You Need to Figure Out as a Business Owner
When you are moving to a business owner, there are a couple of things you got to figure out. The first is scalability. To scale your company, you need to figure out how to sell more with an automated process. One example is to create a high ticket, on-demand program, or consulting. Make sure to go through the market research, product development, and learn how to sell it. Selling high ticket is faster and creates more money and cash flow.
Next, you need to have leads coming in all the time, to sell a large quantity of your high-dollar product. Once you know what you’re selling, and once you have your marketing system in place, you can start the process of moving into a business owner.
Creating a Team
Now that you’ve scaled, you’ll need more help, and this is where hiring comes in to play.
Figure out what key performance indicators are hiring financial people. Ask yourself, who can I bring on here to keep running my scalable business so I can start stepping away and not have to be so involved?
Resources that are mentioned or add value to this episode:
- Persuade To Profit
- Make Money Your Honey Book
- How to Make Your First $100K Online (Even If No One Knows Who You Are)
- Book a Free Mini Coaching Session with Amanda
- Listen to my episode on How to Know When to Transition Your Career
- Read Robert Kiyosaki’s Cashflow Quadrant
- Watch my YouTube Channel Amanda Abella
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