Last Updated on 1 month ago by Heyward CPA PLLC
Today I’m thinking about all these terms we throw around—small business owner, entrepreneur, sole proprietor, self-employed. We use them interchangeably, but do they actually mean the same thing?
In business today, especially with social media, we’re obsessed with definitions. Everyone’s a coach, a small business owner, an entrepreneur. We use these terms to define ourselves, but we don’t always define the words themselves.
So here’s how I see it.
Self-Employed: You Made a Good Job for Yourself
A lot of self-employed people—and I’m not talking about entity structure here—have essentially created jobs for themselves. They might have a single-source contract or one or two major clients that pay the bills.
If they lose one client? They’re cooked.
You made a job for yourself. It’s wrapped up in a business structure, but functionally, it’s a job.
The Small Business Owner: You Built an Organization
A small business owner typically has employees or contractors. Other people are essential to the operation. They’re dealing with the seven functions of business on some level.
The key difference? They think in terms of organization, not just themselves.
Some small business owners are focused on growth. Others are maintaining what they’ve built, and that’s fine. But there’s a structure around them—even if parts are outsourced.
The risk here? Sometimes the business runs them instead of the other way around. But that’s a subject for another time.
The Entrepreneur: You’re Solving a Problem Beyond Profit
In my opinion, entrepreneurs are driven by something beyond profit. They take resources and use them to solve a problem.
They’re usually trying to do something larger. They have a bigger purpose. They take bigger risks. And they’re trying to scale and grow.
Don’t get me wrong—all three are profit-motivated. However, the way they pursue profit is different.
Why These Definitions Matter
As an accountant and an entrepreneur, understanding these differences matters because it dictates how I work with someone.
These aren’t value judgments. One isn’t better than the other. However, different people have varying perspectives, risks, and needs.
Self-employed means you have made a good job for yourself.
The small business owner has an organization to maintain or grow.
The entrepreneur has a vision and is executing it to solve a problem.
Which One Are You?
Let me know. Let’s discuss.