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At the start of a Business, when there's only one person doing  everything, I suppose there is not much to distinguish between the two. 

A Self Employed person, even if he owns a business, to me is  a person who does the technical work for the business. By technical work, I  mean baking for a bakery,  auto repair for a car repair business, dental work work for a dentistry business,  law services for law businesses etc...  These to me are more self employed. They,  more or less create a business so they can practice their technical expertise or skill to earn money. Most of them would be Sole Traders and Partnerships like Lawyers and Accountants. 

However, as the business grows, the person who begins taking on employees and passing on tasks to them and s/he starts working ON  the business rather than IN the business, that person is more accurately defined as a Business Owner. S/he builds the business so that eventually the business can run without him or her.

So my definition between the two has a  lot to do with whether a person is doing the technical work that serves the customer directly or whether the person is letting others do the revenue - generating work to serve customers while s/he does other things building the business, taking care of investors, employees, business partners, the government (taxes, legalities, regulation and compliance, etc...)

Do you have a different answer that might help the questioner? How would you answer this question?


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