Ask HN: Being a Freelancer vs. Starting a Company

- Freelancer

- Contractor

- Consultant

The point being, if you believe you are currently positioned as freelancer (i.e., effectively highly replaceable) then perhaps first work on morphing to Contractor or Consultant. If nothing else, this would likely mean an increase your rates.

Also, before you add someone similar to yourself (i.e., doing hands on ERP work) outsource as much of your back office ops as possible. Once you start to manage others, you'll want to focus on that, and clients as much as possible.

Finally, "a proper company" will likely require some marketing of some sort. It's very likely you'll want to outsource this as well. Marketing is one of "The Human Behavior Arts" (e.g., leadership, management, etc.) that is too often easier said than done. Can you figure it out? Yes, of course. Do you want to have help doing that? Yup! Probably.

This doesn't have to be a binary of decision and move. You have morph along a spectrum to some eventual goal, whatever and wherever that might be.

I would personally be very reluctant to start hiring employees if I was already successful on my own. You say that one upside is “share responsibility” but I would argue that is not true.

It’s your company, you alone are responsible and you’re now not just responsible for your salary but the salary and livelihood of all your employees.

Freelancer = revenue is mixed up in normal income and you pay the tax bill from your "personal" account. If a debt is incurred your house/assets are in the firing line. Some businesses won't touch freelancers for legal purposes.

Contractor = offers same services as Freelancer but operates under another legal entity to protect their assets (umbrella company; limited company). Any debts incurred only impact the company not the individual. A contractor might join a team as an "external" and perform the same tasks as a regular employee. More than 50% of my colleagues fit this description, usually employed by a large-scale "body shop".

Consultant = someone who offers specific niche services and operates under a limited company.