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How to transition from freelancer to business owner


4 min read

In 2009, almost 560,000 new businesses were started every month. Interestingly, however, a large number of these were classified as “non-employer” businesses – in other words, sole operators with no employees. Many consider these individuals to be freelancers as opposed to “business owners” although the distinction might be debatable. For those who do consider themselves as freelancers the question is often asked, “How do I become an actual business owner?”

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The transition from freelancer to business owner

I would rather earn 1% off a 100 people’s efforts than 100% of my own efforts.
– John D. Rockefeller

Part of the attraction of becoming a business owner is the potential for increased profitability, the creation of a lasting legacy, and the ability to… wait for it… take vacations! While many people choose to work solo, many others arrive at a place where they no longer want to be the sole technician and they want to step out of running everything every day. The question is, how can you do that and continue to earn a living?

A few years ago a national opinion poll sponsored by E-Myth Worldwide was conducted by Synovate, a leading independent research company. The survey focused on the current state of entrepreneurship. What was discovered is that a significant number of Americans want to start their own businesses, including many self-employed individuals. According to the survey, these people said that the biggest challenges they face in starting a business are lack of knowledge and confidence (44%), raising money (44%), and the economic and competitive climates (39%). These challenges are equally true for the freelancer aspiring to become a full-fledged business owner.

According to an article by there are five key mistakes that must be avoided when starting your business:

  1. Using your heart, not your head
  2. Underestimating cash needs
  3. Skipping the market research
  4. Limiting your business acumen
  5. Treating the business like a job

In addition, the prospective business owner must be ready and willing to make the transition from being a sole operator and “jack of all trades” to becoming a leader, a manager, and a mentor of other people. As a business owner you are the leader of a team, regardless of wether your team is comprised of two or two hundred.

EMyth client Don Kick—Request a free coaching session

The secret of an effective business owner

It is through leadership that the entrepreneur converts his vision into reality.
– Michael E. Gerber

One of the questions I might ask an EMyth Coaching client in this situation is: “Are you the leader or merely the most senior employee?” In other words, are you truly learning and striving to become a leader in your business venture? Or have you simply created a new job for yourself? We believe that effective business leadership is a combination of three elements: Vision, Action, and Spirit. Let’s take a deeper look at these qualities:

  • Vision is a picture of your entrepreneurial dream and what your business will become at some point in the future. You need a crystal clear vision that you’re able to communicate with energy and a strong sense of commitment. Everyone in your business must understand it and be inspired by it. It must become their vision as well as yours.
  • Action is what you choose to do or not do, and the way you do it. Your actions set the standards for everyone involved in your business. Taking action means doing, and frequently that is where the business owner is most comfortable. However, the ability to recognize better action—or what we call “right action”—is what you must develop. Right action creates an environment that promotes the best performance throughout the company.
  • Spirit is the way you do things and the energy and intention you put into all that you do. It’s your positive outlook, or the respect and concern with which you treat people. Spirit is what animates and inspires you. It’s what other people feel when they’re around you. This is an important aspect of your leadership because it is what motivates most people.

As the leader of your business, one of your primary responsibilities is to be clear about where you are going and why. Therefore, you need to begin by creating a vision for your business. This written document describes your “entrepreneurial dream.” Documenting your vision in a clearly written statement will enable you to share it with your employees and give you a powerful tool to communicate, inspire, and focus the energy of the business.

How hard can it be?

The mechanics of starting a business are relatively straightforward and easily learned. There are multitudes of resources available to entrepreneurs looking to create a start-up business or transition from freelancer to business owner. But the fact remains that, according to the Small Business Administration, two-thirds of new businesses will only survive for two years while only 44 percent will make it four years. And that survival rate drops to just 31 percent of businesses that reach seven years. So, can these odds be beat?

Yes, they can! and tens of thousands of businesses owners have proven this out year after year. The biggest mistake the freelancer must avoid is becoming a business owner in name only while operating like a freelancer with a title of “Business Owner.” The transition is one of the mind as well as the title. Armed with a clear vision, a well-written plan, and the mindset of a leader, any freelancer can successfully make the transition to business owner.

If you want personalized advice on how to transition from freelancer to business owner, sign up for a free coaching session with an EMyth Coach. They will be able to help you see the forward.

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EMyth Team

Written by EMyth Team

We share free resources and stories from our clients, Coaches and team members about how to build a business that serves your life. Our posts will give you updates on our business insights and free educational content.