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The Difference Between Being Self-Employed And Being A Business Owner

Are you like so many people who hate the idea of having a boss? Do you dream of having a job where you can do what you want, whenever you want, and not have to take orders from anyone?

In this world, you have two choices if you want to make money without having a boss. You can either become self-employed or become a business owner.

Before we get into any other details, let’s describe what it means to be self-employed and what it means to be a business owner. Sometimes it’s hard to distinguish the two. But here’s a simple way to tell the difference, ask yourself…

“If I disappeared for a year, would my income stop? Or, would my financial situation continue to be about the same?”

If the answer is yes, your income would stop, then you are self-employed.

A simple example of this is a doctor or a dentist who has their own practice. They don’t have a boss so they definitely aren’t an employee. On the other hand, they don’t make any money unless they are there to actually work and help people. So it might seem like they are a business owner because there name is on the sign and they have business cards, but really, they are self-employed.

Compare this to someone who is a true business owner. If they wanted to go away for a year, all they would need to do is tell the CEO to take care of everything while they were gone. All of the other employees in the business would continue doing the same work they were before. Most of them probably wouldn’t even notice that the owner was gone!

With that being said, let’s learn the key difference between the life of the self-employed and the life of business owners…

Life Of The Self-Employed

No matter what type of self-employed person you are, or are striving to be, there is something important you should know…

The more successful you become, the busier you are going to be!

For example, let’s say that you are striving to be a top business consultant. When you first start out, you aren’t very well-known, and you struggle to keep busy because you don’t have very many clients. But over time, things start to really take off for you. Your customers like what you do and start referring you to other companies. Those companies start wanting your service. They like you as well, and then those other companies start referring you. This goes on until eventually you have an unlimited number of people that want your consulting services.

Now that you are extremely successful, you basically need to work 24 hours a day because you are in such high demand.

Being successful when being self-employed certainly isn’t bad. After all, you can start charging a lot more for your services to cut down on some of the demand. If it’s a job that you really love doing, having the high demand gives you the opportunity to do what you love to do on a constant basis. There’s just one thing that is for sure…

You are going to be busy. If you want to make any money, you are going to have to be their working. The moment you stop is the moment that your money stops as well. If you want a vacation, it’s going to cost you the price of the trip plus the cost of not working.

The Different Life Of A Business Owner

The life of a business owner is completely different. With the more success that you have, the less you have to work. Why is this?

If you start up a company that floods money into your bank account, this gives you a ton of options. If you want, you can use those profits to hire a top-notch CEO to run the company. You can also hire more employees that will do all of the work that you were doing before.

Unlike a self-employed person, being successful as a business owner gives you more freedom. More time to spend with your family and enjoy life.

If you are a successful business owner, you can go on vacation for a week, even a year if you want. Your business will continue to roll in profits without you. So the only money you are losing is the cost of your vacation.

That’s not to say that being a business owner isn’t hard-work. It’s extremely hard in the beginning setting up a business. And that’s not to say that all business owners hire people to do everything for them. Some owners never stop working their fingers to the bone! I’m simply saying that with more success (unlike the self-employed) doesn’t necessarily mean more work. It often means more freedom.

What Should I Get From All Of This?

The point of this is not to condemn ever being self-employed. After all, there are many great jobs out there that fall under the category of self-employed.

What you need to understand is the key difference between having the role of being self-employed and that of being a business owner. Learn and understand this before you start making any long term plans.

As someone who is self-employed, the chances are you are going to get more busy with your success. If it’s a job that you know you will never get tired of doing, then don’t be alarmed. For example, many doctors have an inner-drive towards saving lives that they carry with them for their entire life.

If, on the other hand, your self-employed job is something that you don’t really like doing, then be forewarned. If you know that you’re going to get really sick of knitting sweaters and selling them on eBay five years from now, then don’t ever get started in the first place.

If you don’t want to work for a boss, I would recommend that you consider having the role of a business owner first. Try setting up a business that allows you to work less with the more success that you have instead of more.

That way, you can have the freedom to live a lifestyle that we all dream of having. One with lots of success, and plenty of free time to do whatever it is that we want to do.

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