As the number of freelancers continues to grow, it’s not necessarily easy to answer the question What is Freelancing? And it only gets more confusing from there when you try to define the gig economy, a consultant and so on.

For example, the term gig worker is being applied to:

• people who earn their income one $8 fare at a time via a ride-sharing app,
• freelance photographers who earn day rates, and
• management consultants who may be on retainers worth tens of thousands of dollars.

So the term gig economy isn’t not a very useful term without a definition.

Similarly, it may have been clear until recently how to define a business owner or entrepreneur, but many freelancers now also describe themselves as as small businesses or entrepreneurs

The criteria that go into defining a freelancer, gig economy worker, consultant or business owner may include:

• their relationship with the buyer, such as if they are a client, customer or employer.
• their legal status, such as if and how they are incorporated.
• the tax paperwork they receive or are responsible for and therefore their relationship with the IRS (in the U.S.).

But those criteria are sometimes mutually contradictory. Also, the attitudes and policies of the buyer, the legal system and the IRS may not keep up with how work is changing. Policies and attitudes are even less likely to align with the workers’ own way of defining themselves.

The problem with trying to define freelancing and related terms like consulting is that there are still so many exceptions and so many blurry lines between the terms. “Defined” is supposed to mean locked in behind stable criteria.

But this workforce is fluid. There are as many different ways to be a freelancer as there are freelancers. We each have unique revenue mixes and unique relationships with clients (who maybe are sometimes better described as customers) and with subcontractors (who are sometimes actually employees.)

The table below is an attempt to demonstrate that fluidity. You can see that it’s nearly impossible to say that freelancers always have A, B and C characteristics. Sometimes they don’t, and sometimes the opposite of a freelancer — an employee — also has those characteristics.

But sorting the characteristics can help bring the question of what freelancing is into focus and suggest possible definitions. Below is our attempted glossary of gig economy terms. It’s a work in progress, so let us know what you think.

Related reading: A Roundup of All the Data About the Freelance Workforce

What is freelancing?

Freelancing is a form of work where the worker and the buyer have no fixed obligation to each other beyond the current gig, project or assignment. The buyer is usually called a client. The freelancer can work for other clients. Both parties can choose not to continue working with one another after the current gig, project or assignment.

A freelancer also generally controls a.) when they work, b.) where they work and c.) how they work. Their obligation is often defined by delivering a finished work product rather than by being present during particular working hours.

Some freelance work must be done at a particular time, as in a performance or in cases where the freelancer directly assists the client. But the freelancer controls whether or not to accept that assignment.

Some freelance work may be time-based rather than deliverable-based. For example, a freelance web developer may contract to provide a specific number of hours of support in a month, or they may contract to deliver a defined web project. In either case, the freelancer generally still controls when, where and how they work.

Freelancing is usually done in the freelancer’s own office remotely from the client’s, but not always. For example, a freelance IT specialist may settle in on-site with a client for weeks or months during the installation of new technology systems.

According to Merriam-Webster, the term freelancing derives from a recent and fanciful invention in romantic fiction. Sir Walter Scott’s novel Ivanhoe published in 1820 first used the term “free lances.” The story is set in feudal-era England. The freelancers of the story were soldiers, armed with lances, without a fixed affiliation but free to hire themselves out to whichever army would pay them the most. They didn’t owe allegiance to a particular lord.

Scott’s term caught on and began to applied to unaffiliated or independent workers. In fact, the term freelance felt so natural, that many people assumed it comes from medieval English. But Scott’s use in 19th-century fiction is the first and it’s his own invention.

Freelance does describe a real model for building armies, however. It just went by different terms before 1820, usually some version of the French and Italian versions of the word “mercenary.”

So, without Ivanhoe giving us the term freelance, Nation1099 might be devoted to helping you build up your mercenary businesses, looking for mercenary clients and evaluating which is the best invoicing and bookkeeping software for mercenaries.

What is freelance work?

Freelance work generally refers to creative and professional services offered on a temporary and independent contractor basis. Freelance work generally takes one of three forms:

1. There is a specific usable artifact delivered to the client. Some examples are an article (by freelance writers), a website (by freelance web designers and web developers) or a computer application (by a freelance software engineer).
2. There is a performance as in the case of freelance musicians.
3. There is a temporary service as in the case of a freelance stage manager or freelance social media marketing manager.

What is a consultant?

A consultant is a professional who provides strategy, advisory, planning or project management services.

As noted above, freelance work usually produces a usable artifact or a service, while consulting produces a strategy or a plan. If there was a clear distinction between a consultant and a freelancer, it could be summarized as the distinction between planning and doing.

Of course, in practice the line between those two kinds of work is very permeable, and many professionals work on either side of it. It’s difficult to do good freelance work without first planning, and it makes sense to offer both doing services and planning services to clients. In fact, in Nation1099’s own survey of freelancers, 32 percent of respondents identified themselves as both consultants and freelancers, while 33 percent identified as consultants and 24 percent identified as freelancers.

A consultant is often an employee within a consulting firm which works on contract for outside clients. Therefore, many people prefer the term “independent consultant” to refer to consultants who aren’t on the payroll of a consulting firm. Occasionally, you will see the term “freelance consultant” applied to these workers.

However, the term “consultant” is increasingly applied to independent workers who provide strategy, advisory, planning or project management services. On Nation1099, we use the terms consultant and independent consultant interchangeably to refer to these professionals.

What is a gig?

A gig is work by an independent worker to complete a task, to deliver a completed project or to work for a limited period of time. A gig can be:

• as short as a few minutes as in a ride given by a driver through a ride sharing app.
• a few hours, as in a performance by a musician.
• a single article that takes a few days of work by a freelance writer.
• an ongoing commitment of a few hours per month as in a retainer contract of that freelance writer.
• a six-month assignment as in a freelance project manager or consultant working to implement a new business process.

The term gig originally derives from slang that professional jazz musicians in the 1930s used for their performances. Each appearance was a separate gig. The slang spread to be used for other short-term work by other performing artists and then by freelancers and consultants.

In the last ten years, the word gig has been used to describe the individual tasks that independent contractors are doing through app-based job matching platforms. That work arrangement began to be described as the gig economy.

What is the gig economy?

The gig economy is a work arrangement where the supply side (the worker) is an independent contractor and a.) their work is either time limited or project based, b.) they control when, where and how they work and c.) there is no expectation of ongoing employment from the demand side (the client). The independent contractor may be called a freelancer or a consultant.

The gig may be as short as a few minutes or it may last years in the case of retainer contracts.

In the United States, the gig economy is generally all work where the worker receives a 1099 tax form rather than a W-2 tax form.

The term “gig economy” is a big part of the reason a glossary like this is needed. Until recently, if someone referred to a gig, it generally indicated either the kinds of creative and professional services that freelancers and consultants do or a performance by a musician. But the emergence of online marketplaces like Uber and TaskRabbit made it possible to do short-term independent work in direct personal services like driving and housecleaning. This begin to be called “the gig economy” in the media, and now many people associate the term with that work in particular.

However, consultants, freelancers and workers on so-called “gig economy apps” all share many of the characteristic of being independent contractors. So the the gig economy is sometimes used to describe all independent work. Nation1099 uses the term gig economy to include freelancers and consultants as defined above.

What is an entrepreneur?

An entrepreneur is someone who a.) strives to make a profit by b.) taking risks to c.) reorganize or relocate resources to extract more value from them.

Resources in this case can be goods, materials or capital. Or the resources can be skilled individuals or their time. The purpose of reorganizing or relocating resources is to get more utility out of them. For example, the farmer who brings apples to market is relocating the apples from a place with low utility — the orchard — to a place with higher utility — where the people are who eat apples.

The goal of an entrepreneur is to move or reorganize the resources in such a way that the value grows faster than the expense of acquiring and managing the resources, thereby extending leverage and profitability.

Parts a.) and c.) of the definition of an entrepreneur above are comparatively objective. But part b.) — taking risks — is more subjective. Because risk is relative, every business is arguably an example of entrepreneurship. For example, building a new factory because you believe the market will pay more for your product than you will pay for the materials and labor is obviously a risk.

But imagine someone who notices a rain shower is coming, walks into a drug store, buys all the $5 umbrellas and then goes out to the sidewalk to sell the umbrellas to wet passerby for $10. They also fit this definition of an entrepreneur. They are:

a.) attempting to make a profit.

b.) taking a risk (their initial outlay of $5 per umbrella).

c.) extracting more value from an underutilized resource by moving them to a location with more utility. The umbrellas get moved from a shelf inside the drug store out to the sidewalk where they have immediate utility.

Our culture, however, tends to insert other unspoken subjective criteria before we apply the term entrepreneur. For example, we seem to define risk by what is meaningful to the author or to the readers of the publication. A couple hundred dollars for the initial outlay is meaningful to the umbrella seller but isn’t meaningful to the readers of Inc. and Forbes. In that context, an entrepreneur is someone who risks a second mortgage on their house or who quits a job with a six figure salary to pursue their dream. In that context, selling umbrellas on the street is a hustle.

Dream is another subjective criteria of entrepreneurship. Presumably, no one dreams of selling umbrellas on the street, so we tend not to count that as an example of entrepreneurship. But a dream of “owning my own business” — even if it is a wholesale distributorship to drug stores of junky personal goods like umbrellas — is the sign of an entrepreneur.

Other criteria we tend to apply without naming them are vision and creativity. Apple’s app store embedded in the iPhone is an example of creatively capturing more value and getting ahead of Nokia and Blackberry who made the mistake of thinking they were just in the business of selling phones.

But, again, this is relative. From the umbrella seller’s perspective, Duane Reade doesn’t have the creativity and vision to take advantage of a sudden storm.

To be fair, retail stores, wholesale distributorships and cloud software platforms are more complex example of reorganizing resources. And they indicate a longer-term plan. So there is a meaningful difference in the kinds of businesses being described. But we still argue that the umbrella seller is also an example of entrepreneurship.

In other words, an entrepreneur is a business owner and entrepreneurship is starting and running a business.

Here is a more helpful way of thinking about the difference: Entrepreneurship is an inevitable state of starting and running a business. If you run a business, you are doing entrepreneurship whether you know it or not. But entrepreneurial is a useful adjective for indicating a conscious effort at strategic decisions. A business owner is entrepreneurial when they carefully examine the value of the resources and of the markets they might be moved to.

Therefore, entrepreneurial can describe an approach to a business, and it allows for a degree of subjectivity with more or less risk, vision and creativity.

(In that sense entrepreneurial can be a useful metaphor for other activities that aren’t about making a profit. Most nonprofit community service organizations are entrepreneurial. They take underutilized resources — cast-off furniture, unskilled volunteers, a donated storage closet and a couple cases of juice boxes and cookies — and re-organize them into institutions that are essential to their communities.)

Consider this image that has been used to make a hundred different points about business and marketing. (Who knows if this real or not?)

To some, the flag pillow meme is an illustration of devious marketing — especially if they are both sold on the same platform.

But imagine a world without ecommerce, and imagine the French entrepreneur traveling in The Netherlands and seeing the “Dutch flag pillow” for sale . . . at, my goodness, look at that bargain.

In that situation, the entrepreneur has spotted an under-utilized resource. Those pillows have a lot more economic utility in France. If he or she can relocate that resource to France, then there’s a chance to extract more value out of them and to make a profit, though not without a lot of risk.

(This particular form of entrepreneurship that exploits pricing differences across geographical space or across time is known as arbitrage.)

What does this definition of entrepreneur have to do with your freelance business? Skilled services — and the time to deliver them — are also resources that can be moved or re-organized. When you were an employee in a company, some other entrepreneur was organizing the time and skills of all the employees so that more value could be extracted and leveraged for a profit. A marketing agency, for example, is an entrepreneurial gamble by the partners that if they join forces and hire associates they can make more profit than if they were each working solo.

Conversely, when you go freelance, if you are entrepreneurial about it, you should be thinking about how you can extract more value out of your skill and time than an employer would — or at least more value than the company passed on to you in the form of wages or salaries.

In other words, an entrepreneurial approach to freelancing means betting that you can get more value out of the market for your skill and time than any firm could get out of the market by bundling your skill and time with other workers.

What is a solopreneur?

A solopreneur is someone who works independently, who takes risks and who uses creative approaches to capture more value from the market for their work.

The simplest example of a solopreneur is a skilled professional who realizes they can earn more if they offer their skills and time in a different way than an employer would do on their behalf.

Not all solopreneurs provide services to clients like freelancers and consultant do. Many make their revenue from a mix of product sales, advertising and speaking fees.

Many solopreneurs reorganize their time around activities that are more scaleable or that have more leverage. For example, one entrepreneurial approach to independent work is to spend less time on direct client services and more time on creating digital products. In this case the sales themselves, because they are to a larger market, may bring in more revenue. Or the solopreneur may be calculating that the digital products improve their position for pricing strategy so they can charge more for the remaining client services time.

This is an example of entrepreneurship as defined above in that the solopreneur is extracting more value from the resource of their time and talent by moving it from one allocation to another where it will have more utility.

What is self-employment?

People who are self employed include freelancers as well as “non-employee firms” such as plumbers, gardeners and other skilled tradespeople who work independently. It can also include the operators of businesses with no employees such as food trucks. Generally, when a business like this grows large enough to have employees the owner is described as a small business owner rather than as self employed.

By this definition, people who make their living as independent contractors as drivers and cleaners on gig economy apps are also self employed.

In the studies of the gig economy and the freelance workforce that look at self employment, it is nearly impossible to separate freelancers and consultants from the skilled trades independent contractors who have always been a large part of the workforce.