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consultant vs freelancer

Consultant vs Freelancer: Key Differences (& How To Evolve From Freelancer To Consultant)

By Michael Zipursky
2 Comments

What’s the difference between a consultant vs freelancer?

In Consultant Vs Contractor: What’s the Difference, we outlined the difference between a consultant and a contractor.

However, a freelancer is different from a contractor. A freelancer typically works with more than one client.

And a freelancer may be quite close to becoming a consultant.

By the end of this post, you’ll understand the key differences between a consultant vs freelancer — and how to transition from a freelancer to consultant so you can earn a higher income and win clients more easily.

Let’s dive in.

What Is A Freelancer?

A freelancer is an independent worker who provides their skills and works on projects for multiple clients.

For example, a social media marketing freelancer might work with a few different clients.

For those clients, they manage their social media accounts and post content.

A freelancer typically does implementation work.

That means instead of making the plans, they follow the plan and do the work.

For example, instead of planning out a social media strategy, the social media marketing freelancer writes and posts the content.

A freelancer operates more like a contractor than a business owner. They often rely on job boards like Upwork and Fiverr to win new business.

Freelancers can earn a high income. However, it is difficult for freelancers to raise their rates and charge more for the type of work that they do.

They often use hourly fees, which makes earning a high-level income more difficult than using value-based pricing.

Freelancers often trade their time for dollars. They aren’t creating lasting value for their business.

They spend most of their time working in the business (doing client work) rather than on their business (marketing and sales, creating content, developing productized services, intellectual property, etc.)

Even though they are business owners, many freelancers don’t think of themselves as business owners.

They think of themselves as a pair of hands. They do their work for clients and that’s about it.

And this is why many freelancers struggle:

  • They only do implementation work.
  • They charge hourly fees.
  • They rely on luck and job boards to win projects instead of learning marketing and sales.
  • They work in the business instead of on the business.

What Is A Consultant?

A consultant is an independent advisor who provides expertise to solve problems and achieve results for multiple clients.

In this context, I’m describing entrepreneurial consultants.

These are consultants who run their own consulting business as opposed to being a consultant at a firm like McKinsey or Bain.

A consultant typically does more strategic and advisory work.

That means they help organizations come up with plans as opposed to doing the implementation work.

(Some consultants do implementation work themselves. Or, they might have a team that does the implementation work.)

For example, a social media consultant might help an organization come up with an overall strategy/or plan for how to do social media marketing.

Consultants are more entrepreneurial than freelancers. They run a real business.

They understand that they are in the marketing business — and actively promote themselves and their services.

Consultants typically earn a much higher income than freelancers. They are subject matter experts, and their work is more valuable to clients.

They also use pricing models like value-based pricing, retainer agreements, and productization as opposed to hourly and fixed rates.

Consultants are thinking about how to productize, streamline their services, bring on contractors, etc.

Consultants are more interested in leverage. They seek to do more with less.

For example, a social media marketing consultant might create a “social media audit” where they audit a client’s social media marketing and provide them with a plan to improve their social media presence.

They create a process on how to run this audit, price it based on the value they can create for a client, and train contractors to run the audit for them.

Freelancers do freelance work — but consultants run consulting businesses.

How To Transition From Freelancer To Consultant

Are you a freelancer who’s interested in becoming an entrepreneurial consultant?

Here are some practical steps to make the transition.

1. Start thinking of yourself as an expert.

It starts with your mindset.

You’re not just a pair of hands.

If you’ve used your skills and achieved results for clients repeatedly, then you’ve developed expertise.

This means you can charge for your advice. And your advice is often worth much more than mere implementation.

Help your clients with big-picture strategies and create plans.

This will position you as a consultant instead of a freelancer.

2. Get specific on who it is you want to work with.

In our Clarity Coaching program, we call this Ideal Client Clarity.

The more specific you get in terms of who you are targeting as a client, the easier it will be to market and sell your consulting services.

For example, if you’re a “social media consultant for small businesses,” you’re doing nothing to stand out.

But if you’re a “social media consultant for SaaS businesses,” you’ll immediately stand out — and your ideal client (SaaS businesses) will take notice.

The next step, marketing, is built on the assumption that you are being specific about who your business serves.

3. Start marketing like a real business

That means to stop relying on job boards and referrals.

You can’t rely on luck to run a successful consulting business.

Instead, you’ll have to market your consulting business every day:

  • Reaching out to ideal clients
  • Writing thought-leadership and sharing it
  • Systematically asking for introductions and referrals
  • Creating posts on LinkedIn and joining relevant discussions

All of these activities help get your messaging in front of your ideal clients.

And they’ll create meaningful conversations — which, when done right, will lead to you winning consulting business.

4. Implement value-based pricing.

Consultants who earn the most implement value-based pricing.

Why?

They don’t just ask for more money.

Instead, they ask deep questions and learn the true value that they can create for their client.

Then, they charge based on that value (instead of hourly or by project).

The good thing about value-based pricing is that it forces you to critically assess the value your expertise brings to your client.

It will make your meaningful conversations much more productive and align stakeholders on the project’s outcome.

As a result, you’ll generate much more revenue for every consulting project.

5. Develop key consulting skills — and start building your consulting business.

Consultants are required to have more skills than freelancers.

You’ll have to work on your communication skills, writing skills, presentation skills, and sales skills (to name a few).

However, when you begin to use and combine these skills, you’ll unlock much more of your true potential.

You’ll create systems. You’ll create productized offers. You’ll build a team. You’ll delegate tasks.

And you’ll build a real business.

Transitioning from a freelancer to consultant means more responsibility.

But the financial reward and personal growth make it an adventure worth pursuing.

Get Help Evolving From Freelancer To Entrepreneurial Consultant

If you’re a freelancer and you’re already providing advice for your clients (and not just your skills), then you’re 80% of the way to becoming a consultant.

You can create more leverage, earn a higher income, and build a real business.

  • However, making the transition is not easy.
  • You’ll have to learn how to price based on the value you create and not just trade your time for money.
  • You’ll have to learn how to market your expertise and attract the interest of your ideal clients instead of relying on networking and referrals.
  • You’ll have to learn how to create (and sell) real offers — not just apply for work on job boards.

We teach all of these invaluable skills (and many more) in our consulting programs.

We’ve helped hundreds of freelancers build profitable, scalable, and strategic consulting businesses.

If you want our personal help to evolve from a freelancer to consultant and build a thriving consulting business, our Clarity Coaching Program is for you.

We’ll work hands-on with you to develop a strategic plan and then dive deep and work through your ideal client clarity, strategic messaging, consulting offers, fees, and pricing, business model optimization, and help you to set up your marketing engine and lead generation system to consistently attract ideal clients.

Schedule a FREE growth session today to apply for our limited capacity Clarity Coaching Program by clicking here.

2 thoughts on “Consultant vs Freelancer: Key Differences (& How To Evolve From Freelancer To Consultant)

  1. Thank you for this piece of content Michael.
    It’s really important to transition from just a freelancing hunting for gigs here and there into a proper consultant offering high value at a high touch point to our clients.

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