On Your Own vs. Owning a Company: A Freelancer’s Essential Decision

By Ruth E. Thaler-Carter | Member

Choosing a business model is one of the first decisions when you begin to freelance. How you structure your business depends primarily on your personality and, to a lesser degree, on the kinds of projects you want to handle.

Options and Definitions

The two main options for your freelance business are a solopreneur or a company owner. A solopreneur is a one-person business or entrepreneur, sole proprietor or practitioner, or independent contractor. A company owner is someone who hires and manages employees and/or contractors. The decision applies to both the technical communicator who is just getting started and to the senior pro who has always been a “captive” (in-house) employee and is thinking about breaking free.

For this article, business or company may be synonymous with company with employees. This is not to say that solopreneurs are not in business; we are. Anyone who wants to succeed as a freelancer needs more than strong technical communication skills and experience. You have to think and behave in a business-like way, regardless of whether you choose to go it on your own or establish a company with employees.

Skills and Personalities

When weighing which way to go in defining your freelance business, think about what each model requires.

Most of us go into freelancing because we want the independence of being our own boss, free to work on what we want to work on, how and when we prefer to do our work. That is the essence of the solopreneur, but it also can be the heart of the company model. Even if you have a company, you as the owner are still the one who gets to make those decisions; you just have other people who may carry out the actual work.

The solopreneur model is easy to launch because it requires little more than an up-to-date computer and software, which most of us already have these days. It also, however, takes self-discipline, the ability to work alone without an “office family,” skill in developing resources for fact-checking and research, and willingness to do your own marketing and paperwork (yes, a sole practitioner still has to deal with filing and record-keeping).

In many ways, being a solopreneur is ideal for the introvert, although you will need to reach out to market yourself and find clients. That takes effort for some people who aren’t comfortable with promoting themselves, but it’s essential to your success.

To be the boss of an editing company, you have to understand and be skilled at a lot more than just technical communication. You have to deal with human resources: finding, hiring, training, managing, paying, and occasionally firing employees or subcontractors. You may have to pay benefits. You probably need to find and pay for outside office space and its related costs, although some business owners find they can run a company virtually, with employees and subcontractors working from their own home offices. You have to find projects that are large enough to support those office costs and the time of more than one person, even if only one of your people handles a given client. There also is likely to be a lot more paperwork to this model than to the solopreneur business.

Owning a company may be more fitting for an extrovert, since you will have to deal with not only clients but your employees and contractors.

Solopreneurs and company owners will face different tax issues, regardless of the size of the business. There may also be significant tax differences depending on where you live, so it’s important to get professional advice when setting up your freelance business.

Pros and Cons

Any good business person will establish rates and expenses that give the owner a comfortable income and living.

As a solopreneur, your costs will be far lower than those of a company owner. You can usually work from home, and you only need enough work at a high-enough rate to cover your own business and personal expenses. (That does not mean you should short-change yourself in terms of setting rates appropriate for your experience and skills; just that your income only has to cover yourself.) You can take on small or short-term projects without worrying about their effect on your bottom line. You need business savvy, but at a lower level than someone who has employees, outside office space, and related costs.

A solopreneur may feel isolated and need to figure out ways to engage with the world, while the owner of a company usually has socialization built into the day-to-day activities by virtue of having employees and contractors. As the owner of a company, you can handle larger projects, and with a lesser sense of pressure than someone without staff to share the burden.

The fees for smaller projects may not be as attractive as those that large projects (such as editing or writing a huge document) might generate, but the work can be as profitable for a solopreneur as large projects are for companies. The solopreneur ends up with the whole fee, rather than some of it going to employees or subcontractors and those additional outside-office expenses.

Becoming an editing company makes a lot of sense for anyone who wants to handle large publishing projects. A solopreneur can take on big projects, but probably not ones as huge as a company with more than one editor (or writer, proofreader, indexer, graphic artist, webmaster, or whatever your niche may involve) can tackle.

A solopreneur will need to develop a network of colleagues to work with on larger projects, subcontract to, or give unwanted projects to. A company owner will have those colleagues already in place and at hand.

Solopreneurs who work with MA and PhD students or academic authors trying to submit manuscripts to journals often do quite well on projects that would not be big enough for a company, or whose authors might not be able to afford the fees of a company.

Some of that financial aspect is a matter of perception and assumption, though. A technical communication company might not charge that much more than a solo freelancer, but some prospective clients assume that companies will be more expensive than individuals. Individual freelancers can often use that as a bargaining chip when negotiating with prospective clients.

It can be difficult to find individual clients who will pay enough to be worthwhile clients for either solopreneurs or company owners. The expanding world of self-publishing means more and more authors, but many do not think that they need editors to improve their work. Finding clients who pay what you are worth is an ongoing challenge for any freelancer, regardless of business model.

Tips and Advice

While deciding whether to be a solopreneur or a business owner is a key decision for a freelancer, setting up your freelance technical communication business involves much more than that. See Further Reading, below, for sources of advice on all aspects of launching and maintaining your freelance business.

The Bottom Line

Deciding whether to use the solopreneur vs. company owner model is not a battle. It’s simply a business decision, based on each freelancer’s preferences and personality. Keep in mind, too, that the solopreneur can always branch out into being a company at some point, and the company owner can always cut back and revert to solopreneur status if necessary. The beauty of freelancing is in that flexibility.

Ruth E. Thaler-Carter (www.writerruth.com) is an award-winning writer, editor, and proofreader who has made presentations on freelancing, proofreading and editing, and websites for freelancers to local and national STC conferences and webinars. She also owns Communication Central, which hosts an annual conference for freelancers www.communication-central.com); STC members are eligible for a colleague’s discount on registration.

Options and Definitions

Skills and Personalities

Pros and Cons

Tips and Advice

The Bottom Line

Further Reading

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