Self Employment Versus Business Ownership Comparison – Not to be
It took me a whole five seconds, after reading the debate title, to make a decision to vote no. Mind you, I am a business owner and I work for my own business. However I am not "self-employed."
I was self-employed for several years. I filled out self-employment tax papers and referred to myself as self-employed when anyone asked what I do for a living. "I'm a self-employed (writer/resume writer/freelance writer/web designer)," choosing the one most appropriate for the occasion. It took me a while to figure out that being an employee of my own business was a much better deal when it comes to gaining respect and not having to pay so many personal taxes at the end of the year.
If, for example, I want to apply for a telecommuting job with a company, where I would need to show five years of previous employment in the field, I can simply create a resume with my company name, job title, and a description of the companies who have been my customers in the past. When you use the words freelance, self-employed, or independent consultant, your opportunities for contracts significantly decrease. This is especially true when attempting to get B2B or C2C contracts.
The stigma that is associated with someone who is self-employed tends to lean toward the idea that a person can't conform, isn't a good team player, and doesn't do well in a structured environment. Business ownership, on the other hand, implies that a person is hard-working and willing to do what it takes to make that business survive. While these connotations may not necessarily be true, on either count, that is the way the business world views them.
Therefore, I say "no" to self-employment and "yes" to business ownership. How many self-employed people can quickly respond with "I own and operate a small business that......" when asked what they do? Just this simple change in frame of mind could lead to more questions. How long have you been in business? What companies have hire your business to work for them? The additional questions could lead to more customers and increased revenues.
So, my advice: If you're self-employed, make the change. Set up a corporation or an LLC (not a sole proprietorship). Make yourself the President. Give yourself a job title (CEO, General Manager, etc.). Set yourself up on a salary or commission pay rate. Write yourself a check from the company. Now you are "employed" by your company and open to all of the benefits that come with that (like only having to personally pay half of your FICA taxes.
Add to that, if you pay yourself through normal payroll processes, and your company pays unemployment taxes on you, if you go out of business, for whatever reason, you can march right down to the employment offices and file for unemployment.
