Being Self Employed vs. Owning a Business

There is a huge difference between being self-employed and being a business owner.

Most people think the two words mean the same thing.


Self-employed people often include professionals such as doctors, lawyers and accountants.

It also includes the “mom and pop” stores such as the local laundry mat or liquor store.

These self-employed folks ARE the business.

Without them there would be no business.

Their business relies on them showing up every day, day in and day out, and working long hours.

If they are sick, or go on vacation, or want to take a day off, the business stops.

Even worse, the income stops. 


You will quickly discover that very few entrepreneurs are really entrepreneurs at all.

Instead, most of them are actually self-employed.

If your business depends 100% on you showing up every day, it’s not a business.

If you don’t have employees, systems and/or leverage, it’s not a business.

It’s a job.

There is nothing wrong with owning a job, if that’s what you want.

In many cases, it’ still much better than being an employee.

But not always. 


Many people leave the traditional employment field to start their own business.

All of these people have different reasons for doing it.

Some want to be their own boss.

Some want to make their own schedule.

Some of them are just sick and tired of having a boss, commuting to work, and playing office politics.

Others are really good at what they do and they want to be able to do things their own way.

I get that.

I respect that. 


Most of these folks don’t realize that it takes a different set of skills to run and grow a business than it does to do the technical work of the business.

Even worse, most newly self-employed people figure out after a few years that their business really owns them.

They work longer hours and get paid less money per hour than they did in their job.

It’s like a nightmare come true.

They are stressed out and burnt out.

That’s why you see so many self-employed people close up shop and return to their previous career as an employee.

It’s also why you see so many small business owners working 80 to 100 hours a week, without ever taking a vacation or day off.

being self-employed vs. owning a businessAfter all, if they don’t show up the money stops.

And that can’t happen.

The bills keep coming in. 


That might be fine with some people, but it’s not the way I want to live my life.

How about you?

Once again, the major difference between being self-employed and being a business owner is leverage.

With real businesses, the owner doesn’t have to show up every day for the business to run and grow.

Real business owners have systems in place that allow people to run their business without them.

That’s one reason franchises are so successful: SYSTEMS.

Business owners have employees that follow their systems.

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Simply put, they leverage other people.

They make a little bit of money off of each employee.

That’s great if you want employees.

However, I have no desire to have employees.

If you’ve ever had employees work for you before you understand what I am talking about.


If you love the technical work your business provides, why not just be an employee doing that technical work?

It will come with a lot less headaches.

Let the business owner focus on the headaches while you do what you love.

If that option doesn’t work for you, why not create systems for your business and hire employees or independent contractors so you can start working smart.

Why not start the transition from self-employed to entrepreneur?

Sure, it might be difficult in the beginning.

But wouldn’t it be nice to not have to do everything yourself?

Wouldn’t it be nice to outsource what you aren’t good at so you can focus on what you are good at?

I think so.

The quicker you can make the transition from self-employed to business owner the happier you will be.

If you can’t do that, you will never free up your time or have leverage. 


Michael Gerber is one of my business heroes.  He wrote the best-selling book “The E-Myth Revisited.”  If you haven’t read the book yet you should.

It’s EPIC.

In the book he talks about why most businesses fail.

He mentions that most business owners own a job, not a business.

In other words, most business owners are good at the technical part of their business, but not the managing or running the business part.

I agree.

And he argues that if you started a business only because you love the technical work of the business, you are doomed.

In other words, just because you are good at cutting hair does not mean you will be successful with your own barbershop.

That’s because the duties and responsibilities of the business owner are much different than the duties and responsibilities of the technician doing the work the business offers.

I couldn’t agree more.

Most new entrepreneurs and self-employed people figure this out within their first couple years in business.

They realize their technical skills aren’t enough to build and grow a successful business.

They also realize they can’t do it all themselves.

That’s why so many of them throw in the towel and close up shop. 


When you first start out in network marketing you are self-employed.

You have no leverage.

You are the business.

However, as you start to build a team of distributors you gain leverage.

You become an entrepreneur.

You become a business owner.

You start to earn a little bit off of each person on your team.

As your team grows, that income grows.

So does the leverage.

Eventually, you can have hundreds, even thousands of people you have leverage from.

Best of all, these folks are not employees.

The MLM Company pays them.

You don’t have the payroll or employee headaches.

Even better, network marketing doesn’t require the start-up or ongoing capital that most traditional businesses require.

In other words, you get the leverage without employees and without financial capital.

You also have systems in place you can follow.

And you can start part-time without giving up your day job.

So, there is no financial risk.

Talk about a dream come true.

Once you really understand this you will see how powerful network marketing really is. 


My last piece of advice is just to be honest with yourself.

Evaluate what you are doing.

Are you happy?

Is your business working?

Why or why not?

If not, how can you make the transition from self-employed to business owner as quickly as possible?

If you don’t have the desire to do that, how can you make the transition back to being an employee doing the technical work that you love?

Life is too short to do something you don’t love.


There you have it folks.

These are the major differences between being self-employed and being a business owner.

I don’t expect all of you to agree with everything I said, but if I can help even one of you from falling into the trap of self-employment, I will be happy that I did.

Leave a comment below to tell me what you think.

I look forward to hearing from you.

Have a great day.

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2 thoughts on “Being Self Employed vs. Owning a Business”

  1. As a freelancer, I consider myself self-employed, but I am slowly moving into your definition of business ownership.

    I agree that having employees can be a pain in the butt, but outsourcing is a great method to grow your business substantially without having the employee headaches.

    Network Marketing fits the bill. You don’t actually have employees, but you are a business owner. What is great is: you can take a day off and the business will still operate. It is a win win business, because it doesn’t take a huge investment.

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