4 Differences Between an Entrepreneur and a Self-employed Person

An Entrepreneur Walking

Revolutionary changes in people's shopping behavior have greatly influenced the way products and services are offered nowadays in the market.

The majority of business owners no longer rely on only physical locations to offer their products or services.


They migrate some parts of their businesses to online markets (e-commerce) as well as establish a presence on social media, where they offer products or services and hear what their customers have to say about them.

Does this digital change contribute to the difference between entrepreneurs and self-employed people?

In today's article, we are going to discuss who is an entrepreneur and self-employed, then proceed with differentiating them in a more simplified manner for better understanding.

Definition of Entrepreneur and Self-employed

Around the end of the 1970s, the term 'entrepreneur' was still defined according to neoclassical understanding.

An entrepreneur means:

  • A person who dares to act, think, and act according to his ability and courage to create his own work, earn his own living, and have a career with an independent attitude.
  • A person or group of people who have the urge to create something else, using time and activity, accompanied by capital and risk, and receive rewards, satisfaction, and personal freedom for their efforts.

Meanwhile, the term 'entrepreneur' only emerged in the development of modern economic theory.

A person can be categorized as an entrepreneur if he can:

  • Create products or innovations.
  • Have a long-term vision;
  • Can master production, marketing, capital, or supervision skills.

A self-employed person can be an entrepreneur if he does business, whether it is part-time or full-time. 

And an entrepreneur can be categorized as a self-employed person because he takes risks, reaps rewards and losses, and is not on the payroll of any government or organization.

Development of Usage Trends

After the emergence of the term 'entrepreneur', there were also further understandings of entrepreneurship.

The current generation may be more familiar with calling it entrepreneurship.

Also Read: Tips for creating the right business name for your future business

The popularity of entrepreneurship is directly related to the universal free trade market.

The need for a common understanding between countries means that the term 'entrepreneur' does not refer to entrepreneurship.

Entrepreneurs are still quite easy to find around you.

If you ask people who were born in the era of baby boomers and generation X, they will definitely name one example of an entrepreneur they know.

4 Differences Between an Entrepreneur and a Self-Employed

The reason why the baby boomers and generation Because entrepreneurship is currently a trend, it is natural that discussions of 'entrepreneurship' rarely appear.

Moreover, a small portion of Generation X is also trying to adapt to and follow millennial trends.

By looking at the phases of development and use, several differences between entrepreneurship and non-entrepreneurship can be recognized, including:

1. Business Focus

Judging from mental attitude and independence, entrepreneurship and entrepreneurship are indeed similar. But the focus of entrepreneurial efforts is usually just part-time.

Meanwhile, the focus of an entrepreneur's business demands his entire life. 

For example, an office worker who has a laundry business He can be called an entrepreneur because the focus of his business is not just laundry.

Because he still gets a monthly salary from the office, the laundry business he runs is part-time. 

If he is no longer bound by a contract and focuses full time on his laundry business, he can be categorized as an entrepreneur.

2. Asset Ownership

The assets referred to here include ownership of cash capital and the role of making decisions in business operations.

Businessmen who have their own assets can be called entrepreneurs. Meanwhile, entrepreneurs are relatively involved in operations only.

In current developments, entrepreneurs who have a travel business usually share decisions with other shareholders.

Entrepreneurs like this also do not take full responsibility for the mechanism for paying workers' wages.

3. Business Scope

Based on the scope of the business, a businessman is very likely to be involved in more than one business field.

For example, travel entrepreneurs who offer tourist photo printing services or homestay services in a destination.

This model of business involvement and expansion is relatively unknown to an entrepreneur, as long as they do not invest their business knowledge in other types of business.

4. Innovation and Development Plan

If the business scope refers to other types of businesses, then innovation and development plans are purely carried out for businesses that are already running.

Most entrepreneurs already have a strong understanding of the importance of always updating their business approach according to the latest technological developments.

This is somewhat different from entrepreneurs, who are relatively more traditional and quite complacent with short-term targets.

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