The Difference Between a Freelancer and an Entrepreneur
Which are you? Are you sure?
A freelancer is someone who gets paid for her work. She charges by the hour or perhaps by the project. Freelancers write, design, consult, advise, do taxes and hang wallpaper. Freelancing is the single easiest way to start a new business.
Entrepreneurs use money (preferably someone else’s money) to build a business bigger than themselves. Entrepreneurs make money when they sleep. Entrepreneurs focus on growth and on scaling the systems that they build. The more, the better.
The goal of a freelancer is to have a steady job with no boss, to do great work, to gradually increase demand so that the hourly wage goes up and the quality of gigs goes up too.
The goal of the entrepreneur is to sell out for a lot of money, or to build a long-term profit machine that is steady, stable and not particularly risky to run.
PRO Act Would Threaten Entrepreneurship in America And Hurt Freelance Professionals
Entrepreneurship is ingrained into America’s identity, and entrepreneurs are the most resilient people you’ll ever meet. I’m privileged to see that firsthand every day, as the CEO of Entrepreneur Media, where I watched entrepreneurs and small business owners across America do everything they could to survive during this pandemic. It’s why I’m so dismayed that, just as businesses are getting back on their feet, lawmakers in Washington are trying to pass the Protecting the Right to Organize Act — a law that would cost people their income, livelihoods and small businesses, and it would devastate entrepreneurial investment, especially among women, minorities and veterans.
Too few entrepreneurs are aware of this law, which is why I’m speaking up against it. This community may have weathered a pandemic, but it doesn’t deserve the self-inflicted harm now threatened by Washington.
The PRO Act would drastically restructure our nation’s labor laws in favor of union bosses and at the expense of small businesses. Included in the PRO Act is the now infamous “ABC” test, which voters in California overwhelmingly rejected for app-based drivers, and which the California Legislature has seen cause so many issues in other professions that it has now had to add exemptions for more than 100 types of careers to its ABC Test law. The ABC test presumes employment unless a certain set of conditions are met. This structure advances organized labor’s goal of widening the eligible pool of union employees as much as possible, by making it legal to unionize independent contractors, which would have the very real, damaging effect of restricting independent and flexible work arrangements.
“Success is stumbling from failure to failure with no loss of enthusiasm.” – Winston S. Churchill
What Covid can teach us about entrepreneurship?
Covid-19 is a big multi-faceted shock. But these types of random events are grist to the mill for people trying to learn about economic forces. In other words, it often takes something out of the ordinary for us to learn about the ordinary.
I had been waiting for research along these lines and we have just got one new paper in my own field of entrepreneurship. The work by Cathy Fazio, Jorge Guzman, Yupeng Liu and Scott Stern examines new business starts in the US over the past 18 months. In particular, it looks at where businesses were started and how this was impacted by the three waves of stimulus in the United States. The NYT has a nice summary of the results.
The broad question of interest is not about Covid-19 but about what constrains entrepreneurial ventures. Is it, for example, a lack of opportunities? This has been a strong hypothesis in the past since new business starts tend to decline in recessions and increase in booms. Well, Covid-19 wasn’t your ordinary recession. The hit to economic activity was asymmetric. To be sure, there was a change in opportunities for some new businesses — opening up a restaurant or a physical store was not likely a good idea. But for services and online ventures the opposite was true.
America: White Males Are Now The Minority in Business Ownership
Are you discouraged by the anemic ‘risk capital’ flows towards women and minority groups? Well, consider this broader milestone: White men are no longer the majority of business owners in the U.S. But granted that most small businesses, which include agencies and mom-and-pop shops, aren’t tech firms (albeit some productize to become one)—modernizing businesses may still offer hope.
But what events could have caused this shift? What does it mean for the future of American entrepreneurship? Will white males dominate the business sector again?
According to Forbes, as based on The New Builders book by Levine and MacBride, of the 30.5 million total number of business owners, 12.5 million or 41% are white men, a number that’s been declining since 2015.
The authors gathered these data with the help of Stanford University researchers, where two sets of data from the U.S. Census Bureau’s 2017 survey were utilized, which includes both employer and non-employer businesses.
This yielded results similar to the Annual Business Survey on minority-, veteran-, and women-owned businesses, although from a different perspective.
The COVID Pandemic And Its Impacts On Culturally-Significant Businesses
In the American public sphere today, there is a lot of talk about culture and its significance in our everyday lives. In U.S. urban centers, the loss of traits that make communities unique and meaningful, particularly to long-term residents, is often due to the impacts of gentrification, redlining, environmental injustices, and the lack of sustained, community-based investment.
Yet, the exact meaning of ‘cultural significance’ is not definitively understood. This lack of a clear definition makes it difficult to support direct investment into culturally significant businesses such as COVID-19 relief that can be critical to business owners and the community members who patronize them.
Given this broader context, our study had two important goals. One was to arrive at a meaning for culturally significant businesses that allow designation to drive programs and investment across different communities. We hope that stakeholders, community leaders, lenders and policymakers can use this definition to craft policies, programs and legislation that support culturally significant businesses. These are the businesses that are critical to defining and promoting communities that have faced obstacles in the face of natural disasters, economic recessions and systemic inequality.
The second goal was to uncover and disseminate information on how these culturally significant businesses fared during the COVID-19 pandemic. Culturally significant establishments are essential to their communities. Their continued presence can offer critical support for well-being by providing access to safe and welcoming spaces for the community. These businesses are also crucial to the availability of strategic, required or highly valued goods and services near residents.
Don’t get distracted. Never tell yourself that you need to be the biggest brand in the whole world. Start by working on what you need at the present moment and then what you need to do tomorrow. So, set yourself manageable targets. – Jas Bagniewski, founder and CEO of Eve Mattress
Nearly Half of Small Businesses Unable to Fill Job Openings
A record-high 48% of small business owners in May reported unfilled job openings (seasonally adjusted), according to NFIB’s monthly jobs report. May is the fourth consecutive month of record-high readings for unfilled job openings and is 26 points higher than the 48-year historical reading of 22%.
“Small business owners are struggling at record levels trying to get workers back in open positions,” said NFIB Chief Economist Bill Dunkelberg. “Owners are offering higher wages to try to remedy the labor shortage problem. Ultimately, higher labor costs are being passed on to customers in higher selling prices.”
Sixty-one percent of owners reported hiring or trying to hire in May. Owners have plans to fill open positions with a seasonally adjusted net 27% planning to create new jobs in the next three months.
A net 34% of owners (seasonally adjusted) reported raising compensation, the highest level in the past 12 months. A net 22% of owners plan to raise compensation in the next three months, up two points from April.
Small business owners continue to report finding qualified employees remains a problem with 93% of owners hiring or trying to hire reported few or no “qualified” applications for the positions they were trying to fill in May. Thirty-two percent of owners reported few qualified applicants for their positions and 25% reported none.
Eight percent of owners cited labor costs as their top business problem and 26% said that labor quality was their top business problem, the top business concern.
Forty percent of small business owners have job openings for skilled workers and 27% have openings for unskilled labor. In the construction industry, 51% of job openings are for skilled workers. Sixty-six percent of construction businesses reported few or no qualified applicants.
The #1 Reason Small Businesses Fail – And How to Avoid It
Mention those two little words to almost any small business owner, and you’ll see them flinch.
Very few business terms get as cool a response. And sadly, those two little words (both of them four-letter words, interestingly enough), are the #1 reason small businesses fail. They take out more small businesses than any other factor.
And while most small business owners agree cash flow is the #1 risk for small businesses, cash flow is also a blanket term – a symptom, if you will – of several underlying causes.
7 Common Small Business Problems and How to Overcome Them
So, the business of your dreams is finally within your reach. Maybe you’ve even arranged your financing so all that’s left is to research what it takes to run a successful operation. Part of that research is investigating the most common small business problems that arise during the first few years so you can circumvent them.
Guidant Financial teamed up with LendingClub to survey more than 2,600 current and aspiring business owners nationwide to find out the most common problems entrepreneurs face. From lack of capital/cash flow to difficulty navigating federal regulations… read more at GuidantFinancial.com for the 7 most common small business problems and how you can overcome them.
4 Small Business Tech Trends to Watch in 2021
Widespread remote work has turned small businesses on their heads. Over a matter of weeks or even days, organizations were pushed to develop, execute and maintain remote work policies that affected every aspect of operations.
This major shift will define 2020 for years to come, but the effects of widespread remote work won’t end when the calendar turns to January. Many of the trends, solutions and tools that have been utilized during the pandemic will continue to help small businesses increase efficiency and streamline productivity for years to come.
How Technology Enables Small Business
Small businesses are a cornerstone of the American economy, contributing $6 trillion in economic output and employing 85 million Americans. Unfortunately, small businesses are also heavily impacted by the COVID-19 pandemic, with one in five closed either temporarily or permanently. With social distancing restrictions in place, small-business owners more than ever count on technology to reach consumers, market their products, and grow their business. Tech has been a critical lifeline for small businesses and consumers alike during the COVID-19 crisis.
Examining the use of digital platforms as a whole in the United States before the pandemic, the national small business survey finds that the use of digital platforms by small enterprises is ubiquitous:
- 84% of small enterprises are using at least one major digital platform to provide information to customers;
- 80% are using at least one major platform to show products and services, as well as to advertise;
- 79% are using digital tools to communicate with customers and suppliers; and
- 75% are using tech platforms for sales.
Now, during the pandemic, everything from the way consumers find and purchase products and services to the way small businesses market and ship their wares is enabled by technologies.