5 Differences between Entrepreneurship and Self-Employment that You Must Know

Differences between Entrepreneurship and Self-Employment – Do you often hear about entrepreneurial and self-employed professions? Many people think that entrepreneurship and self-employment are the same profession and have the same understanding. However, these two professions are different. What the heck is the difference?

Check out the following explanation of the difference between entrepreneurship and self-employment.

Definition of Entrepreneurship and Self-Employment

Before discussing the differences between entrepreneurship and self-employment, it is better for Grameds to know the meaning of entrepreneurship and self-employment first. In general, entrepreneurship is a form of courage and readiness possessed by a person to bear the risks that he will bear for the work they are engaged in. The job in question is a person’s business to run a business with the means, energy and capital that he owns himself.

Entrepreneurship in general can also be interpreted as a form of a person’s ability to manage creativity into an innovation with jelly. Where someone who has these abilities forms an opportunity to build a business venture. In addition to the general definition of entrepreneurship, some experts also express opinions about entrepreneurship. According to Lupiyoadi, an entrepreneur is someone who has the ability to realize creativity as well as the ability to innovate. Where from this ability he has, he can use it to improve self-welfare and be able to prosper the community and the environment.

Robbins and Coulter define entrepreneurship as an effort owned by a person or group to make the business he runs run run in an organized manner. The purpose of the business they run is to create value or meet market demand. Meanwhile, Dewanti argues that an entrepreneur is someone who has a role and responsibility for challenges and the ability to be able to take advantage of an opportunity.

Sjahbandi argues that entrepreneurship is a person’s ability to manage a business that he runs himself. He also said that there are several factors that can influence a person in making entrepreneurial decisions. One of them is personal judgment, especially with regard to the background and experiences possessed. So that whether a person succeeds or not as an entrepreneur is characterized by the skills, experience and competencies that a person has. So it can be concluded that an entrepreneur is someone who has the readiness, courage and thinking to run a business that can affect himself and even the surrounding environment.

Meanwhile, self-employment is a type of work that is of course different from entrepreneurship. Although both have the same prefix, namely entrepreneurs, entrepreneurs and entrepreneurs are different. The word wira itself comes from javanese which was absorbed from Sanskrit which means to be brave, dashing and exemplary. According to the Directorate of General Secondary Education (1982:65) self-employment is a type of work or someone who does work independently and is not determined by a superior, because a self-employed person does not have a superior.

In the book Entrepreneurship written by Muhammad Dinar, et al self-employed are activities or businesses carried out by groups or someone that aim to provide added value to a product and provide more satisfaction to customers. The added value of the self-employed person in question is something that has a new or unprecedented nature. In general, self-employment can also be defined as a person who has the courage to think, behave or act to create various kinds of jobs and live an independent career. From the understanding of entrepreneurship and self-employment above, does Grameds already know the difference between these two types of work? If you only look at it at a glance, it may be difficult to know the difference between entrepreneurship and self-employment. In order not to be confused, here is an explanation of the difference between entrepreneurship and self-employment.

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Differences between Entrepreneurship and Self-Employment in General

Please note that actually the term self-employed first appeared, namely around the 1970s. In the beginning, the term self-employed was defined based on neoclassical understanding. When it first appeared, the definition of self-employed was as follows.

  1. People who have the ability to think, behave or act based on the ability and courage they have to do their own work, work or behave independently and earn their own money.
  2. The person who has the urge to make things in a different way from others by means of using the time and activities followed by capital and the possibility of failure and the acceptance of recompense and the satisfaction of the free authority over the business he does.

Meanwhile, the term entrepreneur only appeared when there were developments regarding modern economic theory and was defined as follows.

  1. Someone who creates a creation and innovation
  2. Someone who has a vision with a long term
  3. A person who can master expertise in the field of marketing, production, supervision and provision of capital.

Then along with the times, the term entrepreneur has changed or is more popular with the term entrepreneur. For millennials, the term self-employed tends to shift and the term entrepreneur is more popular. Even so, the term self-employed does not just disappear.

As previously explained, that entrepreneurs and self-employed have differences. Here’s the explanation.

1. Differences in the focus of the business

When viewed from the focus of their business, self-employed and entrepreneurial certainly have quite clear differences. The business focus of an entrepreneur covers all the time that exists in his life. Meanwhile, the focus of a self-employed person’s business is only part-time. For an easy example, a person who works as an office employee has a laundry or laundry business so that he can be said to be an entrepreneur. Because he not only has a focus on business, namely laundry, but also has a focus on getting a salary from the office where he works. The effort he made, was only done part-time. Meanwhile, if a person has no ties by other parties and all his time is only used for the business he owns, then that person can be included in the category of being an entrepreneur.

2. Differences in asset ownership

The second significant difference between entrepreneurship and self-employment is the ownership of assets owned by these two types of professions. The assets in question are the ownership of fund capital and the role it has to make decisions in business operations. A person is referred to as an entrepreneur when he is involved relatively in business operations only. Meanwhile, a self-employed person has his own assets.

3. The scope of business of both professions

A business actor has a greater possibility of being involved in a business and even being involved in more than one field. That way, a person will fall into the category of entrepreneurship when he has a fairly wide scope of business or business scope. For example, when he offers travel services that are also equipped with photography services that he has. Meanwhile, a person who is classified as self-employed cannot apply his business application to other types of business and can only focus on one business scope. For example, he has a laundry business, so only the laundry business is all he can do.

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4. Planning ahead

The fourth difference between self-employed and entrepreneurial is about the business development plan. An entrepreneur has a deep enough and solid understanding to always update the business approach he has in accordance with the most recent technological approach. Meanwhile, a self-employed person tends to have a more traditionalist mindset and is more easily satisfied with the short-term targets they have.

5. The mindset of entrepreneurs and self-employed people

When viewed from the mindset of entrepreneurs and entrepreneurs, of course, these two types of professions have different mindsets. It can be understood that an entrepreneur is someone who opens a new business and is independent.

An entrepreneur can see several opportunities that he can take advantage of, so he will benefit from these opportunities. A self-employed person, on the other hand, has the mindset that only by passing on an existing concept can he make a greater profit. For example, currently many entrepreneurs are seen through the many emergence of startup companies. These entrepreneurs, usually have their own concepts and are able to develop their company. As for the self-employed, in general, they can run something that already exists and can take advantage of it.

Those are the five differences between self-employment and self-employment. When summarized, these two professions have the following differences.

  • A self-employed person is someone who has the skills to create added value to a product, or can provide a sense of satisfaction to customers. He also has a focus on going into one area of business. A self-employed person is able to act and think according to the ability and courage he has to make money independently.
  • An entrepreneur is someone who is skilled in utilizing, managing and developing a business. He has the ability to focus on running several businesses at once. An entrepreneur can also innovate and create and have a vision in the long term.

Differences between Entrepreneurship and Self-Employment from Their Characteristics

The difference between entrepreneurship and self-employment can also be known by Grameds through its characteristics.by knowing the characteristics of these two types of professions, it will be easier for Grameds to know the difference. Here’s the explanation.

1. Characteristics of entrepreneurship

a. Dare to take risks

An entrepreneur has a fairly distinctive characteristic, namely a bold attitude. In general, an entrepreneur is someone who dares to take risks. Because of this courage he has, he is able to brave all things to make the business he makes develop and advance.

b. Have a fairly high sense of self-confidence

The second feature possessed by an entrepreneur is a fairly high self-confidence. With his confidence, he believes that the business he builds and runs will achieve success one day.

c. Have special abilities in the field of management

An entrepreneur in general has special abilities in the field of management. Because at first he started a business or business alone. With his management skills, he is able to manage many tasks at once without feeling tired or lacking time.

d. Have a leadership spirit

An entrepreneur must work independently to earn money, without any superiors giving orders or guides. Therefore, an entrepreneur usually has a leadership spirit. Not only to lead others, but also to himself. He was able to embrace and guide his team.

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e. Original or able to make innovations

An entrepreneur is someone who has the nature of originality, meaning that he is someone who is innovative, flexible as well as creative. They are able to make something that already exists into a new thing or create a new thing. This original characteristic is the basic difference between an entrepreneur and a self-employed person.

f. Memiliki pola pikir out of the box

One of the characteristics of entrepreneurship is to have an out of the box mindset. With this mindset, he is able to present original things according to market demand. The out of the box mindset owned by entrepreneurs can arise from solving problems, presenting new products or even to advertising concepts to market their products.

g. Task-oriented as well as results

A person who is entrepreneurial, usually focuses on the task as well as the results he will get. Therefore, the entrepreneur has a long-term plan about the business he runs. Entrepreneurship is also more future-oriented. That is, they believe that a good future is coming and they will manage to achieve the coveted success. Even so, in general, an entrepreneur is able to control emotions, so they will not focus on past failures, but make these failures a lesson.

h. Seorang problem solver

In addition to having a leadership spirit, an entrepreneur is someone who is able to solve problems without the need to create new problems. The solutions presented are usually made depending on their knowledge, insights and experience. With the experience he has, he is able to provide a complete solution to the problems he was facing at that time.

2. Characteristics of self-employment

a. Understanding his passion

A self-employed person is someone who understands his passion or abilities. So that he will pursue the field of business that he is good at, besides that usually self-employed people will also take the field of business that he likes. A self-employed person knows what passion he has and will always try to improve his abilities in that field.

b. People who are disciplined and have high dedication

A disciplined attitude is certainly needed by a self-employed person, because he will work independently part-time. In addition, he must be able to separate and be disciplined in doing his work in the office or business without mixing his complaints. So that an attitude of discipline is very necessary, because the self-employed has two roles at once. High dedication is another characteristic of a self-employed person. Because if a person does not have a high dedication to get his job done and take good care of business, then the two things he does will fall apart.

c. Have plans for the future

The third feature is that a self-employed person generally has plans for the future. Although usually a self-employed person tends to have short-term plans and not long-term like an entrepreneur. That’s a review of the most basic differences between entrepreneurship and self-employment. Are you interested in becoming an entrepreneur or self-employed person? If you are interested in carrying out one of these types of work, then Grameds must pursue and study it well so that the business being run can develop and not stop in the middle.