More and more young professionals are turning towards a career of independence. Freelancing, Entrepreneurship, running a business etc are the more preferred career options than a traditional full time job. Now that people have chosen a career of self-employment and independence, they often get confused between various options. The approach of a freelancer can not be the same as of a businessperson. But, a lot of people confuse running a business with self-employment. Here are few points to understand the difference.
Understanding The Options
All of these options offers the opportunity to be your own boss. Self-employment means that you work for yourself as a freelancer or an individual. But when you set up your own business, you essentially work for the business. In a business, you also need to hire more people to take care of different functions of a business.
If you want to employ people, you need to set up a limited company or join a partnership. As the owner of a business, you are treated differently for tax purposes to a sole-trader. You are treated as both the owner of the business and an employee of that business.
The Skills & Training
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As a self-employed person, you MUST have the skills to work in the area you wish to operate. Like if you want to serve the content industry, you must have the skille of developing excellent content.
On the other hand, as a businessperson, the only NECESSARY skill is the skill to run and manage a business. For actual work, you can always hire a professional. You will be more concerned with running, managing, and taking care of the finances of the business. Which brings us to-
You can be self-employed and operate from your own room! But same cannot be done if you wish to run a business. You will have to employ certain level of resources into your venture. And for those resources, you will need some sort of funding. This funding can either come from personal sources or from investors.
I hope you are clear with these basic differences now. All the best for anything you choose to do!