Self Employment vs. Entrepreneurship: Key Differences

I. Introduction

Does being self-employed mean being an entrepreneur? Even though both may sound the same, there are key differences between self employment vs entrepreneurship. Entrepreneurs are focused on innovation, growth and building something big, while the self-employed operate smaller businesses that provide income for themselves. Understanding these differences can help determine which path is right for you based on your individual goals and risk tolerance.

Definition of Self–Employment and Entrepreneurship

Before we move to the differences, let us first understand the definition of between being self-employed and being an entrepreneur.

Self-Employment: Working for oneself as a freelancer or sole proprietor rather than for an employer. Self-employed individuals typically sell products or services directly to customers and clients.

Entrepreneurship: The process of designing, launching, and operating a new business enterprise. Entrepreneurship involves identifying market opportunities, developing new products/services, building a business model, securing funding, and providing leadership to grow the business.

II.Examples of Self-Employed People

Here are some key examples of self-employment.

A. Sole Proprietorship

A sole proprietorship is the simplest business structure for self-employment. It involves owning and operating a business as an individual.

 B. Freelancing and Gig Economy

Freelancing involves working independently by providing services to multiple clients. It offers flexibility and variety.

The gig economy provides short-term jobs or “gigs” facilitated by apps and platforms. Examples are Uber, Fiverr, Upwork.

Freelancers, Consultants, Trainers, Artists, photographers, property managers usually fall under this category.

Self-employment usually involves lower business risk as there is less initial investment of capital. Most self-employed individuals offer services or products based on their skills. However, they are the sole person responsible for running their business and in case of unwarranted situations, it is difficult to achieve their targets. Self-employed people are also normally called solopreneurs.

Income: Even though self-employment has flexibilities in terms of timing and working systems, their income tends to be capped based on their personal time and effort

III. Characteristics of An Entrepreneur

Entrepreneurship on the other hand, encompasses a broader scope of self-employment. Entrepreneurs are innovative individuals who identify opportunities in the market and take calculated risks to turn their ideas into reality. They develop business models, secure funding, build teams and navigate the complexities of running a business.

Entrepreneurs also create more job opportunities and inspire and motivate people to work independently. Although the risks are high in entrepreneurship, entrepreneurs are motivated by the rewards of business growth, financial success and fulfilment of turning an idea into reality.

business coaching program

 IV. Differences Between Self Employment and Entrepreneurship

A Risk and Reward

A self-employed person is usually averse to take risks while an entrepreneur deals with many problems and risks in their daily work. A self-employed person handles most of the responsibilities and outsources a task or two whereas an entrepreneur delegates most tasks and so has time to strategize and plan for the long term.

Self-employed people receive payments directly from their clients whereas entrepreneurs are compensated by taking a share of the profit from the business. Once an entrepreneur scales his business effectively, the rewards received from his business are quite high compared to self-employed individuals.

 B. Innovation and Problem-Solving

Creative thinking and innovation are crucial for successful entrepreneurship. Identifying issues that lack solutions and imagining new products or services requires out-of-the-box thinking. Entrepreneurs need creativity to develop business models that challenge the status quo.

In contrast, self-employment tends to rely more on existing skills and services. The focus is independence rather than innovation.

Thus people who are creative, innovative and have problem solving capabilities have their path carved out to be an entrepreneur, whereas people with adequate skills and who love freedom and transparency can choose to be self-employed.

  C. Scalability

Self-employment is primarily about providing a service or selling a product, whereas entrepreneurship encompasses a wider spectrum of activities. Entrepreneurs are often driven by a vision for their business and are motivated to create something beyond themselves. They seek to generate value, drive innovation, and make a lasting impact in their respective industries

Though self-employed people can also scale their business, it is capped by the time and effort that an individual person can put into his business. As you do the work directly for clients, there is no leverage through productization, systems, automation, or teams. Also funding options are limited in this business model as it is difficult to attract outside investors without a growth model.

To summarise:

With self-employment, all decisions and work fall on the shoulders of the individual. Entrepreneurship allows distributing responsibilities across functions like technology, operations, marketing, finance, and business development. Allocating work maximizes productivity.

The income of the self-employed is limited to what they can do individually. Entrepreneurship creates value from the collective efforts of a team. As the team grows, so can the business.

Self-employment provides independence but can be isolating at times. Entrepreneurship builds connections through networks, partners, and team members. Collaboration unlocks creativity.

While self-employment can certainly be rewarding, entrepreneurship taps into the potential of what a group can accomplish together. Assembling the right team multiplies the possibilities.

However, there are advantages to both Self-employment and Entrepreneurship. Let us look at some of these.

V. Comparison: Self Employment Vs Entrepreneurship

Advantages of self-employment:

  • More control and flexibility over your schedule/work-life balance
  • Ability to choose your clients/projects
  • Low start-up costs if you freelance from home
  • Tax deductions for business expenses
  • Can start part-time or while keeping a regular job

Advantages of entrepreneurship:

  • Potential for high earnings and wealth building
  • Creative freedom and control over your vision
  • Opportunity to build equity in a business
  • Leverage skills of employees and scale your business
  • Prestige of owning and leading a company

Thus, self-employment offers more flexibility and lower risk, while entrepreneurship requires more upfront capital but has greater earnings potential. Choosing between them depends on your goals, skills, and appetite for risk. Many start self-employed first before transitioning to entrepreneurship.


VI. Factors to Consider When Choosing Between Self-Employment Vs Entrepreneurship

A striking difference between entrepreneurs and the self-employed lies in their characteristics of each working type.

The characteristics of the self-employed include:

  • Flexibility: They can adapt to the needs of others, from rules to working hours.
  • Courage: They dare to act and remain confident, even when they haven’t mastered a skill, viewing it as a challenge to overcome.
  • Passion: They diligently pursue learning opportunities.


entrepreneurship and it's importance


Also read: Entrepreneurship And Its Importance

Among entrepreneurs, the characteristics that stand out are:

  • Creativity and innovation: These two traits are essential for creating products that provide solutions to society.
  • Resilience: They do not give up in the face of failures, obstacles, risks, and challenges, finding alternative paths to success.
  • Ability to seize opportunities: Entrepreneurs can predict, take advantage of, or even create opportunities when new trends emerge in society.

VII. Success Stories- Self Employment

 Successful Freelance Content Writer – Jenna Gyimesi.

Read her full story here.

Freelance writer Jenna Gyimesi earned $10,495 in one month while only working 16 hours per week. Jenna’s success was not overnight. She spent 2 years building her blog, YouTube channel and audience before going fully freelance. This provided a platform to build on.

She had a backlog of 5 clients providing steady work. Her client work brought in $4,475 of her monthly income. Her blog and YouTube accounted for $4,999 of the income. Though she posted less, she better understood her audience.

She struggled to sell her own services and products, which only comprised $1,021 of income. This is an area she wanted to improve. By tracking time, she maintained work life balance, spending only 65 hours on work that month.

Her story demonstrates how with years of effort creating an audience and skills, self-employed individuals can earn significant income on their own terms.

In summary, Jenna exemplifies how with diligent preparation over years, the self-employed can build multiple income streams and achieve high earnings with flexibility. Her disciplined tracking of time also allowed work-life balance.

VIII. Success Stories – Entrepreneurship

The Story of Blue Tokai – Coffee Roasters

self employment vs entrepreneurship

Founded in 2012 by Matt Chitharanjan and Namrata Asthana, Blue Tokai began selling coffee online and through one café in Delhi. Identifying a gap in the market for fresh, high-quality coffee beans and a café culture focused on the consumer experience, Blue Tokai strived to educate Indian consumers about coffee.

They focused on sourcing direct trade coffee beans from plantations and bringing out each coffee’s inherent flavors through careful roasting.

Blue Tokai embraced an omnichannel strategy with online delivery subscriptions, retail stores, cafes, and collaborations with restaurants.

By 2016 they had raised funding, expanded to Mumbai, and grew revenue by 600%. Their beans were being sold internationally.

Blue Tokai’s success demonstrates key aspects of entrepreneurship – identifying an underserved market, building a product/experience that consumers value, constantly innovating, assembling a team, securing investors, and scaling strategically.

As a pioneer in coffee, Blue Tokai made a mark through passion for their product, persistently educating customers, aiming for quality, and maintaining agility even while expanding rapidly.

Their story highlights how entrepreneurship can identify gaps in a market, creatively address needs, and build a unique, thriving brand with cult-following.

Blue Tokai also exemplifies how entrepreneurship, innovation and strategic vision can brew success even in a commodity market.

 IX. Conclusion

Both Entrepreneurship and self-employment have their own share of advantages. The decision to choose self-employment or entrepreneurship ultimately depends on who you are as an individual. If you like problem-solving, love to create innovative solutions and can spot gaps in the market to create solutions, then entrepreneurship may be the right path for you.

If you want to maximise returns from a flexible and adaptable work style and achieve work-life balance, then self-employment works. Also note that entrepreneurship and self-employment have several similarities. The skills you learn in self-employment like taking risks, building communication skills and working independently actually trains you to become an entrepreneur in the long run.  Hence, even if you are self-employed today, remember that entrepreneurship and team-building is the path that can naturally follow.

If you are self-employed and want to gain the skills to become an entrepreneur, then Dev Gadhvi’s Business Coaching Program can lead you towards the right path.

X. Additional Resources

If you want a life-changing book that embarks you on the path of entrepreneurship, then check out this list of classic and highly regarded books that are often recommended for individuals interested in entrepreneurship and self-employment.

  1. 80% mindset 20% skills by Dev Gadhvi: This book teaches you how to radically transform your life in as little as 9 days and achieve the right growth mindset to become an entrepreneur.
  2. The Lean Startup” by Eric Ries: This book introduces the concept of building a startup using a scientific approach, emphasizing rapid iteration, validated learning, and continuous innovation.
  3. Think and Grow Rich by Napoleon Hill: A classic self-help book that explores the mindset and principles needed to achieve success and wealth. It delves into topics such as desire, persistence, and the power of the subconscious mind.

If you are interested in discovering what a career as an Entrepreneur has in store for you, then feel free to attend this online workshop –



Read More : Entrepreneurship Ideas

26 Innovative Ideas for Business Startups

New Business Startup Ideas in India 

How to Make Money - Blog


Read More : Self Employment Ideas

side Business ideas- blog




What is Automated Business Process?

Business process automation (BPA) is the use of technology to automate business operations and end-to-end processes in an organisation. Some ...

How to Do Market Research For a Startup in India

So you have come up with a fantastic idea for your product or service. Believing in your idea and having ...

The 10 Essential Competencies of a Successful Entrepreneur

What are Entrepreneurial Competencies? Entrepreneurial competencies refer to the necessary abilities and conduct required to establish, develop, manage, and expand ...


Learn How To Effortlessly Turn Your Passion into a Thriving Business 

Join our exclusive webinar and get access to the powerful strategies you need to transform your passion into a profitable business empire. 

"*" indicates required fields

This field is for validation purposes and should be left unchanged.

The proven 7-Step Process shared in this webinar isn’t shown anywhere else so register today to get your exclusive access