What’s the difference between a consultant vs contractor?
Do you want to work as a freelance consultant or independent contractor?
You’re probably wondering what the difference is between these two types of independent professionals. Both freelance consultants and independent contractors are hired by companies to help them with their business.
And both allow you to be self-employed with a flexible work schedule. But they have distinct differences.
This article will discuss the similarities and differences between a consultant vs contractor so you can decide which path is right for you.
How does the IRS define an independent contractor?
Simply put, an independent contractor is self-employed and performs work for another company. The IRS defines an independent contractor as someone who is not considered an employee.
The IRS uses 20 criteria to determine if someone is truly an independent contractor. These are known as the common law rules. They include how much control you have over where and when you work.
Whether you have your own office space if you are required to work at the client’s worksite. And the specific tasks required by your contract, and more.
The contractor may be hired to complete any number of tasks, such as writing a blog, developing a content marketing strategy, or conducting financial analysis.
Where it gets a little confusing is a consultant is legally an independent contractor. However, on freelance platforms, there are differences between being a contractor vs consultant.
What is an independent contractor? (According to Freelance Platforms)
Typically, companies hire an independent contractor to complete specific tasks or jobs. Contractors aren’t required to have extensive experience or expertise.
A recent college graduate can successfully start a business as an independent contractor. For some projects, only a high school education or technical degree is required.
Contactors will “do” the work. For example, they will write blogs. Or build the excel models from scratch and conduct the financial analysis.
Independent Contractors sell their labor.
What is a consultant?
Freelance consultants have extensive experience in a specific industry, subject, or function. So, they act as subject matter experts (SMEs) to their clients. Companies hire consultants to solve a broad challenge or develop an innovative solution.
Consultants will provide recommendations, strategies, or plan projects. For example, a consultant could develop a go-to-market strategy for a new product introduction.
Typically, freelance consultants leave the job of putting this advice into practice for individuals in more long-term roles with the firm.
Freelance Consultants sell their knowledge.
Can you be both a consultant and contractor?
Yes, you can be both a consultant and a contractor. And there are many different types of consultants. Depending on the project’s scope, you might be asked to provide recommendations and do some of the work.
Or, because of your expertise, you could sell services that cover both freelance consulting and independent contracting work. But, again, you’re in charge of your business. So you decide which services to offer clients.
You can be the go-to digital marketing expert for cybersecurity startups (freelance consultant). And you can be the best marketing project manager for those same customers (independent contractor).
Enjoy the flexibility and freedom
Both freelance consultants and independent contractors have the flexibility of being your own boss and setting your schedule.
Freelance consultants have extensive experience in a specific industry, subject, or function.
Freelance consultants act as Subject Matter Experts (SMEs) to their clients and solve broad challenges or develop innovative solutions.
You can be both a freelance consultant and an independent contractor. You have the freedom to decide which services they provide.
The common thread that connects a consultant vs contractor is that they are highly skilled professionals who offer their services independently instead of taking a full-time position elsewhere.
