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Being Self-Employed Versus Being an Entrepreneur

By Renée Gendron MA

At first it appears that being self-employed is the same as being an entrepreneur. Both require the individuals to keep their skills current, to grow their networks and to develop resiliency skills. Both also require that the person be continuously scouting or prospecting ensuring that there are future contracts or sales. But there are many other differences that need to be considered. These differences include how the person interacts with their clients, scalability, tolerance for failure, and tolerance for risk.

Let’s start with some easy definitions. A self-employed person looks for clients or contracts. They may be able to service multiple clients throughout a work week or they may be focusing on one contract at a time. Self-employed people need to focus on delivering the benchmarks or goals set out in the scope of work contract.

An entrepreneur seeks to alter or improve upon relationships. They may achieve this through their product or service design, their business model and/or how they partner with other companies. The role of an entrepreneur is to add value by creating something new or improved. They are establishing the ground work for a business. The entrepreneur is extremely passionate about their vision.

Interactions with clients

A self-employed person looks to develop relationships with decision-makers who are able to hire them. The self-employed person offers specific value or solutions. They are seeking to negotiate terms of temporary employment where such factors as wage, hours works, location of work, and deliverables are negotiated.

Skills needed: communication, listening, negotiation

An entrepreneur experiments with service and product design. They are evolving and adapting their product to better meet the needs of the target market. When an entrepreneur engages with people, they are seeking to gain insight into the industry, deeper understanding of the problems faced by potential customers, feedback from end users and conversations with potential buyers.

Skills needed: communication, listening, negotiation, visioning


A self-employed person works for themselves. They may partner with other consultants for specific projects but in essence it is a one-person work contract. When a self-employed person takes a vacation or stops working, the money stops flowing in.

Skills needed: money management, time management, ability to line up future contracts while working on current ones, networking

An entrepreneur has the potential to grow their business. They can hire staff to continue to generate revenue when the entrepreneur is sick, on vacation or is engaged in other projects. A service company can hire more consultants or adopt an associate model. A company that sells products can ramp up production and develop their supply chains to reach more markets. Other variations on this theme all point to the ability of the entrepreneur to make money without having to do all of the work themselves.

Skills needed: handling complexity, leadership, development and management of operations, development of business ecosystem (interactions outside of the company), sales, marketing, networking, human resources, time management, stress management

Tolerance for failure

Self-employed people are hired for a specific period of time to fulfill certain tasks, responsibilities and outcomes. Should the terms of the contract not be met, it is likely that the contract will be terminated or not renewed. In this type of scenario there is little tolerance for failure.

Skills needed: negotiation of expectations and deliverables, pre-emptive communication to discuss minor issues before they become serious complications, self-confidence

Entrepreneurs are constantly evolving their product or service, business model, marketing strategy, go to market strategy, and pretty much every other aspect of their business and business ecosystem. Some things will fail. Other things will fail spectacularly. Being an entrepreneur means that there is a high degree of tolerance for failure because it is known and understood that not everything works on the first try. More precisely, not everything works at all.

Skills needed: emotional, psychological and physical resiliency, resourcefulness, ability to learn and apply quickly, healthy levels of self-esteem

Tolerance for risk

Being self-employed is more risky than being an employee. After it is up to the self-employed person to develop the contacts, make the investment to network and write requests for proposal to generate work. Those are all risks that employees do not face. However the degree of risk is less than that of an entrepreneur in part because they are far fewer start-up costs for a self-employed person than an entrepreneur.

Skills needed: time management, money management

An entrepreneur takes on the most risk in that they often pay out of pocket the start-up costs of their venture. They invest in the legal foundation, the materials, and the product or service development. They also invest a lot of emotional and psychological energy in developing the idea, networking, experimenting and trying again. It can take years to create a successful company during which time much of the financial risk is borne by the entrepreneur.

Skills needed: resiliency, time management, money/resource management, network development, sales development, ability to learn and adapt quickly, stress management

When career coaches and career counsellors help their clients better understand the nuances between being self-employed and being an entrepreneur, particularly along the lines of the four categories of how the person interacts with their clients, scalability, tolerance for failure, and tolerance for risk, they are better able to support their clients.



Renée is driven by one question: how do we make businesses more innovative and adaptive to ensure active participation by everyone, prosperity and purpose. She’s been interested in the economy, systems and shifts in paradigms for over 12 years. To that end she’s extended leadership and conflict resolution courses and talks to help entrepreneurs, professionals, and businesses get in the headspace to be innovative and thrive.


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