Entrepreneur vs Self-employed

My recent post on self-employment vs. entrepreneurship, shared via social media, garnered much attention.  This is a more detailed follow-up.

First, let’s explore two linguistic definitions:

- Merriam-Webster describes self-employed as:  “earning income from your own business or profession rather than by working for someone else.”

- From the same dictionary entrepreneur is described as: “a person who starts a business and is willing to risk loss, in order to make money”

Even at a glance, we can see that these definitions are very different.  As is usual, one can apply pros and cons to almost anything in life.  So, let’s dig a little deeper yet.

Because of the Internet and social media connectivity today – in modern business verbiage – work is what you do rather than where you are.  Although this comment may be applicable to employees, self-employed businesspeople and entrepreneurs, the latter two likely have more work/life balance and flexibility options, than do most, regular employees. 

According to South African entrepreneur Brian Walsh, 99% of self-employed people are not entrepreneurs.  He said, “Most self-employed people are stuck in a cycle of trying to pay bills each month, or maybe they're making reasonable money but working too hard.  They sometimes get stuck in their inability to grow their businesses, or they can't get out of their comfort zone ruts that have become bad habits they don’t know how to break.”

Walsh’s comments ring true.  Most self-employed people have simply exchanged having a boss for the perceived pleasure of being their own boss. 

Most self-employed people end up going to work day-after-day, at the same time, to the same place, awarding themselves with a regular paycheck, and often taking very little time off to enjoy the fruits of their labor!

For example, a self-employed person may own a dry-cleaning business.  An entrepreneur may own a chain of dry-cleaners, but hardly ever work at the actual businesses.

Successful entrepreneurs live fulfilled, exciting lives.  Their success could be defined as being both financially and spiritually rewarding… the obvious outputs of doing meaningful work.  Successful entrepreneurs generate wealth for themselves and for others, but also generate personal free time to do meaningful things outside of their businesses.

Entrepreneurs strive to own businesses that generate healthy profits without requiring them to work in the business.  If they choose to go to work at the business, they often only spend a few hours a day, or a few days a week, at the place of work.

Entrepreneurs should have the ability to see whether the business is operating optimally, from a distance.  An entrepreneur will often aspire to spending more quality time with family and friends, while dedicating however much time they want to helping their community, in ways that bring them joy and great personal fulfillment.

Not everyone can be an entrepreneur.  Bill Gates and Richard Branson are examples of great entrepreneurs.  Not everyone can be self-employed either.  Can you think of a truly great, self-employed person?

But… the working world needs great employees too!  And, there’s nothing wrong or right – or good or bad – being any of the three active economic contributors, as described above.  

Once, I asked one of my employees what motivated her, and she replied “The desire to be the best Account Manager this business has”.  That answer was not only endearing, but also complimentary and an answer that should be encouraging for any business owner to hear!