Employee, Independent Contractor, and Entrepreneur

What type of position are you seeking or now hold?  I suggest that there are three categories of jobs:  an employee, an independent contractor, or an entrepreneur.

An employee works for an organization and performs specific duties for stated compensation.  The organization matches social security payments to the IRS and pays for other related fees such as unemployment premiums and published benefits according to the terms of employment.

An independent contractor typically works on specific tasks defined by an individual or organization that pays gross compensation to the contractor withholding no deductions.  Further the independent contractor is responsible for payment of all taxes and benefits.  The independent contract receives no payment for time not worked.  In order to be classified as an independent contractor by the IRS, the contractor has his/her own business, has more than one customer, uses his/her own tools, works on his/her own schedule, and other requirements as listed in the IRS rules.

On the other hand, an entrepreneur typically owns and operates a business for which he/she has complete responsibility for all its operations and financing.  You might say that an independent contractor is an entrepreneur; however, I think that the big difference is that the entrepreneur does not work solely under the direction of its customers.  While an independent contractor provides personal services to a given customer, an entrepreneur typically provides both products and services to many customers.  In addition, an entrepreneur retains full responsible for his/ her actions.

What is the source of your income?  Are you ready to assume the responsibility and risk as an independent contractor or entrepreneur?    

 

Please share your experiences as an independent contractor or entrepreneur by posting a comment or emailing me at glynjordan@gmail.com.

Thanks, Glyn