Identity crisis: Are you a freelancer or do you own a small business?

Originally posted on Medium.

For the past few weeks I’ve been talking with a lot of people about this. Freelancers, small business owners, entrepreneurs, whatever you want to label them. It’s quite interesting to see that almost all of them ended up talking about this: am I a freelancer or do I own a small business?

I call this an identity crisis — when a freelancer wants to be perceived as a business but keeps acting like an individual. The reason why this happens is because the line that separates both worlds is very thin, but these are also two very different realities even if you’re a lone ranger. It’s a question of mindset and acting like it.

“You are the product of your business.”

Here are some concerns when facing the market as a business owner and not as a freelancer:

1. Is one person enough to be a business?

This is where everything starts. If you work as a solo team it doesn’t mean you can’t have a business. It’s very important for you to strategically think about the way you want to be perceived by your clients.

Ask yourself this questions:

  • Am I an independent professional or do I own a business with products and/or services to offer?
  • What’s my brand? Do I use my personal name or the name of my business?
  • Why did I join this life of independent work? Did I have an idea for a product or did I just not want to work for others anymore?
  • What are my goals? Where am I headed?

2. Me, myself and I

In fact, the way we talk gives us an idea on how we perceive ourselves. Do you talk like an individual or do you frequently use sentences like “us”, “my team”, “my company”, “my business”?

This not only affects the way you perceive yourself but also affects the way clients perceive you and will work with you in the future.

3. Services vs Products?

It’s interesting to see how it’s all very clear if you own a product. You’ll immediately think about the name for it, the brand, marketing and operational plans. You dream about the future, what that product will be, next releases, improvements, and so on.

But if you offer services instead… now that’s a different story. This is when everything is more difficult to put together. The product is your “child”. It has a name and a life of its own. But your services are… well… you! Not you as a person, but your knowledge. And it’s difficult for us to see ourselves as products. But that’s what you are. You are the product of your business.

4. Personal expenses or company’s costs?

How do you deal with the expenses that you or your business have? Do you separate your personal expenses from the company’s costs? Is it all the same or do you deal with different approaches and mindset?

It’s very different dealing with personal budgets (your expenses, savings and debts) from dealing with business budgets that include personal expenses (your income is here), office, marketing and project costs…

5. Cash Flow

… and the way you deal with your personal money it’s dramatically different from managing your company’s money. I could be talking about this for the whole day. I’ll write about it soon.

6. What are you legally?

In Portugal we have two ways to make it happen: If you’re an independent freelancer you register yourself as an independent worker, if you have a business then you open a company. But in many cases (too many if you ask me) you see small businesses that are legally registered as freelancer services. Well, you have other ways to do it here, but I’m not even going to talk about professionals that provide a service and issue an invoice or receipt with the name… of another person. Look, I know that taxes are high and that it’s great to have that unemployment compensation while earning more cash on the side, but have you ever wondered what your clients might think about it when they see a receipt with the name of a person they never saw? Maybe they are expecting an invoice from your company. Yes, that company that you talk so much about. Or at least, with your own name.

Think about it. Act accordingly. It’s hard but at the end of the day you’ll be rewarded for being true to yourself.

These are major concerns that every freelancer or small business owner needs to be aware when defining their identity and strategy.

If you need help or some advice reach me at I’ll be here to help.



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