The Difference Between Consulting and Freelancing
Many people confuse consultants with freelancers. It’s not unusual to interchange the terms "consulting" and "freelancing" when describing the services you perform as a contract worker. However, each word has a very different connotation when describing the type of relationship you plan to have with customers and the services you offer. Understanding these differences is an important part of positioning your business for future success.
What a Consultant Is
A consultant is a person who is paid to provide professional or expert advice in a particular field or specialty, such as advising a company on social media use or on increasing efficiency.
What a Freelancer Is
A freelancer works independently, selling work or services by the hour, day, or job — usually with no intent to pursue a permanent or long-term arrangement with a single employer. It’s easy to see how you might confuse the two. After all, both convey the idea of performing work or services for other people or companies.
To further emphasize the difference, take a look at the synonyms commonly associated with each term. Synonyms for consultants may include descriptors, such as adviser, guru, and specialist. Synonyms for freelancers tend to be tied to a specific career field or job title, and most commonly that of writer, journalist, and graphic designer.
Why the Difference Is Important
When hiring a freelancer, customers tend to think of using your services for a short-term project with a very specific outcome. For example, writing a case study or designing a brochure. As a freelancer, your role is to take initial direction from the client and then go off and complete the assignment.
Typically, the work is done off-site, using your tools and resources. You control nearly every aspect of the project, including determining the best method for tackling the project and deciding the necessary timeline for completion. Once the project is finished, your relationship with the client may end until the next project comes along.
As a consultant, your clients look to you for detailed guidance on a particular area of expertise. For example, you may be hired as a crisis communication consultant or a marketing strategy consultant providing advice to the client. In many cases, the scope of the project is more extensive and could include several smaller projects within the overall agreement.
For instance, a marketing consultant may be hired to conduct competitor research, organize focus groups, oversee the development of an ad campaign, and write a marketing plan. For that reason, the work may occur as part of a long-term or ongoing commitment, as opposed to having a definitive start and finish date in only a few weeks.
If you are working on-site for the client, using the client’s resources, and have your schedule dictated by the client, then you may also be considered an employee, under the definition of the IRS. In that case, you will receive a W-2 for the tax year, instead of a Form 1099 for miscellaneous income as an independent contractor.
A consultant is not more superior than a freelancer or vice versa. The value of your services is in the quality of performance and whether or not the objective of the project is achieved. However, the way in which you categorize your work does shape how your prospective clients view your terms of service. As a freelancer, you may be hired on a project-by-project basis while as a consultant, the scope of your work is usually broader and you could land a long-term gig that may even lead to permanent employment.