When to Move From Freelancing to Consulting

by Beth Rifkin

2 min read

Flexibility is a major benefit of freelancing. You have the flexibility to choose when and how you want to work, and you can even take time off during slow months when your clients don’t have projects for you. Although you probably value this freedom, it’s natural to also think about moving into consulting. Before you make that move, you should have a clear idea about the difference between freelancing and consulting.

Freelancing vs Consulting

FreelancingAs a freelancer, your work is specifically tied to your profession. For example, if you’re a freelance writer or editor, then you work for clients with writing or editing projects. If you are a freelance tutor, then you probably work for students (or parents) who hire you on a short term basis. Freelance caterers take short-term assignments in the food service industry. As a freelancer, you spend your days doing hands-on work in your field. Consulting Consultants are big-picture people. An experienced editor turned consultant can advise a client on how to set up and manage publishing workflow. An experienced tutor could advise an education startup on curriculum development. A catering consultant can advise a restaurant chain on revamping its menu.

When to Move

If you have a few years of freelancing under your belt and you’re ready to expand your knowledge in your field, then it might be time to move into consulting. As a freelancer, you might have taken a variety of gigs based on pay or interest level. As a consultant, you’ll have to narrow your specialty area even further and learn more about it. For example, as a web developer, you’ll move from building various sites based on client specifications to consulting on projects using one specific framework.

The Transition

You can find clients for your consulting services in the same network that you used to build your freelance career. Some of your previous clients might be the first to hire you as a consultant. Notify your existing clients about your move; if you haven’t already done so, ask them to write letters of recommendation that you can use on your website, your LinkedIn profile, and other marketing materials. Depending on how you want to structure the rest of your transition, you can simply add a new page to your existing website announcing your consulting services. If your goal is to put freelancing on the back burner, then change the information on your homepage accordingly and link your consulting page in the first position on your website. If you plan to focus on just marketing your consulting services, then you should also get new business cards.

Tax Status

Freelancers work independently, but consultants are often directly supervised by the company that hires them. The shift to a new work role might also involve a change in tax status according to the Canada Revenue Agency (RC4110(E)). Your tax status can impact your eligibility for employment insurance and the Canada Pension Plan. Freelancing and consulting are different, but one role is not better than the other. You can expand your overall expertise by trying out both before you decide which one you like best.

References & Resources

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