In general terms, there's not much difference between a self employed and a business owner especially in the early days of hustling. Both of them are working hard but for different reasons. Generating revenue is key. However, when enough money starts coming in, the self employed seems to lose the gaze at the horizon.
Structurally, when you read between the lines, there's some crucial difference between the two. The focus is different. The working style and mentality are also not the same. In this post, I share with you three crucial differences between the two and how to avoid the pitfall of the self employed.
Focus
Having a plan is important, it guides you on what to focus on. But how far is your planning. Short term or long term?A self employed is a person who works for himself or herself. In the modern age, most of them are called freelancers. Freelancers aren't the only self employed. Dentists, Car mechanics, barbers or hairstylists, are all part of the self employed category. Basically, self employed is when you're the main architecture and making money is directly tied to the work you put in. If you step out of the equation, there's no money coming in.
This is not a problem in the beginning. However, if you can't build a system where you can remove yourself out of the equation and money is still coming in then you've fallen into a trap. Because you're still exchanging your time for money just like a normal job working as an employee.
Most self employed individuals escape the 9 to 5 trap only to fall into another trap. In most cases, they even work harder than their 9 to 5. The focus is always on the short term, making money.
The situation is different with business owners, they focus on the long term by building money making systems or assests where the business can exist without them and/or exit with a nice valuation that can translate into a fortune.
This takes time and requires a long term plan. They start by putting the pieces and strategy together on how to build effective systems. One of the key realizations is that you need a team.
That's one of the fundamentals differences between the business owner and the self employed. Self employed think they need to do it all by themselves, nobody can do it better than them.
Working In Or On The business?
How do you know if you're working in or on the business? It's not that difficult to understand. Working in means you're 'inside' the business while working on means you're on top of it getting things done. This is a key difference.Self employed are immersed in the business. Usually, They're not part of the business but they are the business itself. Reacting to everything that's happening instead of prioritizing doing the important tasks. Everything is right up into your face asking for your attention so time is very limited and you're barely able to zoom out and have a bird's eye view of things and where the business is heading. You're over occupied, that's what happens when you're a one man soldier trying to fight a bunch of enemies.
Business owners delegate repetitive boring task and things they're not good at (or don't enjoy doing) to other people. They don't mind paying this people from the 'share of their salary' or some of the profits. Because this gives them more time to focus on moving the business forward and building an
asset.
Mentality
Sales mentality versus CEO mentality. Instant gratification versus delayed gratification. Self employed are in the sales and instant gratification camps. Revenue is hardly reinvested into the business.
Most of it is splurged into instant gratifications and they don't have a problem going back to work the next day. The good thing is that they have a skill, so they can always exchange it for money. What they done factor in is the time part.
Their mentality is that they're independent contractors so they don't think of building long term partnerships. You hire them, they do the work and then they're gone. Where as, a CEO has to keep looking for potential partnerships to leverage in expanding their business and reach new heights.
A business owner's mentality is also about growing the business while a self employed individual's mentality is growing himself or herself only. Between the two, which one is really an asset that you can sell?
In Conclusion
Well, while writing this article, it dawned on me that most of us here on Hive (On the blogging side) are self employed. You barely get paid if you don't put in the work. But don't fret it. This web 3.0 model is different, you're already a business owner. With a few tweaks here and there you can officially become one.
Besides, you're also an investor. Which is one of the higher aspects of being a business owner.
Are you thinking like a business owner or a self employed?
Thanks for reading!
Profile: Young Kedar
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