Are you a business owner or a self-employed labourer – Nowadays, many people find themselves self-employed and working from home.

Not knowing how to classify the work they do, some people refer to themselves as being self-employed labourers.  Some classify themselves as small business owners.  Their family and other members of society may regard these individuals as being temporarily unemployed, since they are not full-time employees nor fully-operate a legally established business.

However, various governmental bureaus and private corporations have given many of these individuals “home-based micro business with sole trader proprietorship” status due to legal issues.  This leads to people assuming that the terms “business owner” and “self-employed” are interchangeable and mean the same thing.  However, this is not necessarily true.  Whereas most business owners are self-employed, not all self-employed people are business owners.  Some people merely work as independent contact labourers or earn irregular income via utilisation of their skills or hobbies.

What Constitutes Being a Business Owner?

There are numerous elements to being a business proprietor.  No matter what size the company is, the owner acquires certain responsibilities and obligations along with the enterprise’s benefits and profits.  Mostly, the proprietor must ensure the business’s success by constantly:

  • Overseeing and/or carrying out the business administration tasks
  • Overseeing and/or performing the accounting, bookkeeping and/or recordkeeping tasks
  • Overseeing and/or conducting research and development of new products and/or services
  • Overseeing or conducting marketing and sales on a regular basis
  • Overseeing and/or carrying out the production and delivery of products and/or services on a regular basis
  • Overseeing and/or providing human resource tasks
  • Overseeing and/or providing for employee healthcare, retirement and other benefits
  • Overseeing and/or performing finance management and legal department tasks
  • Ensuring the workplace is safe and healthy for employees, third parties and the environment
  • Making business plans, setting business goals, making important business decisions, and setting company policies and standards

The business owner may choose to do all the aforementioned work or delegate this work out to other people.  Nonetheless, it is still primarily the proprietor’s responsibility, no matter who actually performs the tasks. Therefore, it is no wonder that most people do not lightly enter the field of business ownership.

What Constitutes Being a Self-Employed Labourer?

On the other hand, many self-employed people do not engage in the aspects of daily business operations or management on a regular basis.  Some even purposely avoid or completely ignore the responsibility that typically comes with being a sole trader.  These people merely find ways of earning an income by being a self-employed labourer.  They may provide a variety of services, such as mowing the grass or childcare to family, friends and neighbours on either a regular or an irregular basis.  Alternatively, the person may turn a hobby into an occasional paid venture or occasionally sell items at the local car boot market.  Self-employed people may even earn money by sporadically contributing content to websites or winning contests.

Distinguishing the Differences between a Business Owners and a Self-Employed Labourer

Thus, there are several ways to distinguish a business owner from a self-employed labourer.  One way is to assess how much responsibility, especially legal and financial liability that the individual willingly accepts.  Another way to tell the difference is to evaluate the amount of time, dedication, commitment and investment that the individual gives to the enterprise.  Lastly, you can tell the difference between being a business owner and being a self-employed or independent contract labourer by considering what tasks are being performed on a daily basis.

If you still cannot clearly determine which you are, then ask yourself the following questions.  Are you promoting your services to strangers as well as to family, friends and neighbours?  Do you promote your services via public media, such as advertising in newspapers, radio announcements, television adverts, or on a website?  Do you consistently offer the same services and products in a reliable manner?  If so, then you should consider yourself a business owner.  If not, then you probably should consider yourself a self-employed labourer.  However, if you do work for others under a signed contract, then you may still be considered an independent contractor legally, even if you own a business.