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Entrepreneurship vs. Freelancing: What's the Difference? Freelancers work hard for their money. Entrepreneurs work hard to set up systems that make them money.

By Daniel DiPiazza Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.

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A few years ago, I was watching an interview with Seth Godin, who is one of my heroes of the business world. He was explaining the core differences between entrepreneurship and freelancing. I was getting heated just listening to him.

Here's how Seth explains it:

Freelancers get paid for their work. If you're a freelance copywriter, you get paid when you work. Entrepreneurs use other people's money to build a business bigger than themselves so that they can get paid when they sleep.

Related: Why Millennials Have Their Priorities Screwed Up

When I saw this interview I was busting my ass (and making very good money) as a freelancer -- but I always considered myself an entrepreneur because I had an "entrepreneurial mindset."

"He doesn't know what he's talking about! I am TOO an entrepreneur!" I grumbled.

I thought of an entrepreneur (and myself) as a free thinker. Someone who created his or her own destiny and didn't just take what the world handed to him. To think of myself as anything but an entrepreneur, while I was working so freakin' hard to make money on my own, totally messed with my self-identity.

But Seth did have a point.

Freelancing is an essential step in the entrepreneur's journey. You have to learn how to find clients, talk to them and get them to pay you. You have to learn how to develop skills and ideas and test them in the marketplace. And freelancing is great, because for all intents and purposes, you can get started immediately.

The truth is that almost anything can make money. But first, you have to change your mindset. You must start viewing your skills and experiences as bankable, valuable resources with paying for. You (yes, you) can help someone with skills and knowledge that you already have. The easiest way to do this is by freelancing.

Related: 25 Best Habits to Have in Life

Freelancing changed my life (and I recommend anyone looking to leave the 9-5 first find work for themselves as a freelancer on the side), but freelancing is only halfway there. It's a necessary bridge to get you away from your day job and into independent living. On the other side of that bridge is full-fledged entrepreneurship.

The difference between entrepreneurship and freelancing comes down to TIME:

  • Freelancers exchange time for money (albeit much more money than a traditional job).

  • Entrepreneurs depend on systems, automation and, eventually, employees that work without their direct involvement.

The key question is: "If I take myself out of the equation, does the business still work?"

If the answer is "Yes," you are an entrepreneur.

If you can create enough momentum in your business that you'll still make money, regardless of what you do on a day-to-day basis, you are an entrepreneur. And a badass.

This is the Holy Grail. This is where you want to end up. Here's the simple blueprint for making money with an online business.

Related: 5 Lessons for Success From YouTube Star Casey Neistat

1. Choose a great business idea, then start to build a website that attracts visitors.

Here's a quick tip to come up with a great business idea: Combine one of your ideas/hobbies/skills to find something that you care about and figure out how that can be used to solve another person's problem.

2. Turn those website visitors into loyal subscribers by offering them something free in exchange for their email address.

Create free, helpful content and ask visitors for an email address in exchange.

3. Turn those subscribers into customers by asking them to buy from you via email.

You can sell whatever you want -- a physical or digital product, a course, a service or even coaching. It's all based on what's interesting to you, and what you think you can help your subscribers with the most. After a while of delivering a ton of awesome content for free (emailing your blog posts, YouTube videos, or whatever else you create), now you have the "right" to sell.

This is huge.

Related Offer: Get a 60-day free trial to email marketing platform Constant Contact.

4. Automate

Once you do this for some time, you can automate the sales process. With email marketing software and a basic funnel, your business can generate thousands of dollars per month without your involvement. Pretty amazing.

Welcome to Narnia! We're happy to have you!

Daniel DiPiazza is the founder of Alpha Mentorship and the director of the Profit Paradigm accelerator for agency owners.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

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