Business vs Self Employment

Its very important, if you want to have your own business, to understand the difference between a “business” and “self-employment”.

Self-employment is what most people create when they try to make their own business. Self-employment is basically a job… the only difference is that you no longer have a boss. You are both the boss and the employee.

Certainly, self-employment is more fun than working for someone else. But it has many problems. The biggest problem is over-work. For example, many lawyers are self-employed. But they work too much– 50, 60, 70, or more hours a week. In many ways, they don’t own their business,… their business owns them.

When self-employed, you are basically doing the same job you used to do for someone else. A key trait of self-employment is that your business only makes money when you work. If you take a vacation, your business stops making money (or makes less).

A true business is different. It is not the same as a job. A business is an organization of systems. It continues to work even when you are not working or present. You create systems by automating your business and/or training others to do parts of it. Your goal is to create a business that can run without you. Ideally, you should be able to disappear for 6 months… and the business continue working well while you’re gone.

This is easier said than done. To accomplish this, you must organize every part of your business. You must simplify all tasks and train people to accomplish them easily. You must create a strong, clear management system. You must automate every part of the business that you can… so that things happen automatically.

To understand this idea better, I recommend the following two books:
The E-Myth
Rich Dad, Poor Dad

Both are available on my Amazon Business BookStore, or at your local English bookstore.


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  • Kristian Rei Monterde

    Pretty straight forward. But I liked it. This is a short but nice read. 

  • Kristian Rei Monterde

    This definitely going onto my timeline. I need my friends to understand this and I think this article explained everything in a short but clear manner.

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