Have you just completed the graduation and confused with what to do next? Thinking like should I join in a stable job? Becoming an entrepreneur or being an entrepreneur? Before taking the final decision let me clear the basic difference of these terms and entrepreneurial concept. First of all, you should know that Entrepreneurship Is Also Termed As Self Employment.
Often considered as the same, a person who is self-employed and an entrepreneur may have the same similarity of possessing their own business. Besides that, they both begin to go through different paths. Let’s dig into deeper about all these concepts of entrepreneurship.
Entrepreneur Definition and Self Employment
As Entrepreneurship and self-employment are quite confusing, we see plenty of entrepreneurship questions for tests on the various exams. And the fact is these objective questions for entrepreneurship examination are quite tricky. First of all, let’s see the definition.
What are entrepreneurism and entrepreneurship?
Entrepreneurship is an act of designing, planning, launching and running a new business. It is also considered a small business. Meanwhile, there is a difference in entrepreneurship vs. small business. Thus, the people who take those risks are called entrepreneurs.
Meanwhile, the traditional entrepreneurship definition is a bit limiting. In modern terms, entrepreneurship is about transforming the world. How? They do it by solving big problems. Like presenting a life-changing solution, initiating social change or creating an innovative product.
And what is self-employment?
Self-employment is the state of working and performing for oneself rather than an employer. A self-employed person does not like to cross his comfort zone. He doesn’t dare to do new things as he fears taking risks.
Entrepreneurship is considered to be a key determinant of the country’s economic success. In some sense, Self-employment can be seen a bit selfish. Why? Well, he only thinks just about his wealth. Yes, it also seems an entrepreneur also thinks of wealth. But most importantly, he creates something beneficial for society. So it’s mutual, not selfish.
That’s why nowadays we see a lot of investment into entrepreneurship strengthens. They also make a brand value for his country. When we hear the name of Samsung, we immediately think of Korea. Apple Inc. makes one think of North America.
The Differences between Entrepreneurship and Self-Employment
Yes, undoubtedly Entrepreneurship and self-employment are quite puzzling. There are distinct differences in the concept of these terms.
While many individuals are the “owners” of their business, they carry all the responsibilities and duties of an employee. Essentially working anywhere from a certain time under an authority often are overworked and underpaid.
On the other hand, entrepreneurs are the risk-taker. As a result, they get all the rewards. While they start that business from the interest, the passion leads to success.
So the concept of entrepreneurship and self-employment overlap at times. There are few instances in which a self-employed are not technically entrepreneurs. Have a look at the prime difference.
A self-employed person receives the rewards or payment from clients. They got payment normally via check, cash or electronic payment system. Usually, Self-employed contractors dispatch invoices to the client. And they treat that payment from salaries or wages categories as operating expenses.
On the other side, Entrepreneurs are normally compensated by receiving a share of the total profit from their business. And how they make a profit? Well, profit gain from revenue obtained from their customer or clients.
The main difference is the fact that where entrepreneurs’ clients pay on the businesses, self-employed contractors’ clients pay to them directly.
Whether you are an Entrepreneur with a great idea or want to be own boss, a certain amount of bravery is involved. At the same time, you got to be risk taker and persistence. So don’t get tired to give your 100$ to achieve the dreams. Also, don’t be afraid of failure. Failure makes us more determined as well as stronger.
An entrepreneur has the guts to go outside of his comfort zone. Yes, he may fail at the first time. But surely he will come back with new goals, ideas and certainly, with more experience.
A self-employed individual is more likely to perform or work in a variety of environment. It could be in the home office, libraries, workstation, and coffee shop or even in any WiFi-equipped public spaces. Meanwhile, Entrepreneurs can also work in any of these environments. But they normally prefer to work in their own office or rented the place. They also like to share the space with their employees.
As Entrepreneurs focus on companies grows, they take more and more employees. So they have no choice but to take office or workstation. On the other hand, the self-employed individual takes it as additional expenses. Technically, they consider it as their expenses.
The issue of employees can overlap. Usually, a self-employed individual doesn’t hire employees working for him. But in some cases, he made subcontractors help him serve clients. So they make up a team.
An entrepreneur hires any number of employees for his company. However, it is impossible to continue a one-man company. As we mentioned earlier, an entrepreneur believes in business growth. So he needs more human power and recourses.
Self-employment carries much fewer requirements and restrictions than entrepreneurship. Thus, Contractors have to deal with government agencies only at the time of filing their income taxes.
On the other side, Entrepreneurs must deal with a huge range of legal requirements. It includes licensure, local permits, business registration and filing business taxes.
The core difference between a self-employed and an entrepreneur isn’t found within the working environment or workload. Fundamentally, it lies in the mindset. In plain word, how they think or vision on the business world.
With many characteristics and qualities overlapping, where can you see yourself categorized below?
From this, there is a certain distinction between self-employment and entrepreneurship. They are not synonymous. But in technically, Entrepreneurship Is Also Termed as Self Employment.