I’ve been thinking about this question a lot in the last 24 hours, ever since Jo Wood from The 6 Figure Bookkeeper posted a video in their Facebook group yesterday and asked the question “Do you have a business or do you have a job?”
My answer was, “I currently have a job, but I am building a business”, which is what I have set out to do since deciding to set up Virtual Accounts and Taxes Ltd back in March 2021. I’m right at the start of my business journey, so it’s inevitable that I must do the client work myself for the time being. Once the revenue starts to come in, my intention is to employ others to work in the business while I work on growing the business. My mission is to help local young people from lower income families have hands on experience of accounting while they study, so to achieve this, I have to grow the business substantially.
So, what is the difference between being self-employed and being a business owner?
The Oxford Dictionary’s definition of self-employed is: “Working for yourself and not employed by a company”
Being self-employed means being very hands on in the day-to-day running of your business. The business cannot carry on without you when you are absent, and you have to be involved in everything from marketing and sales to IT support and finance on top of completing the work your customers are paying for.
For a business owner, however, the focus is on making decisions and profiting from the business. The business will continue to run in their absence, and they will have a team around them that they can delegate important tasks to. Both my husband and I are self-employed, but our businesses are completely different.
My husband is a tradesman, he completes work for lots of different clients, he chooses who he wants to work with, he invoices them when the work is completed, and he pays his taxes twice a year. If he takes time off, then no work gets completed and he doesn’t get paid, so he generally doesn’t take much time off unless he really must. He’s lucky that all his clients now come through word of mouth and recommendations, so he doesn’t have to spend much time on marketing, but he does spend a lot of unpaid time pricing up jobs, sourcing products and buying materials. He really is self-employed in the true sense of the word, but he does outsource his bookkeeping to my business, Virtual Accounts and Taxes, and we act as his tax agent. Both of which is happy to pay someone else to do because he doesn’t have the skills or time to do it himself.
I see myself as a business owner. I own Virtual Accounts and Taxes Ltd and I pay myself a salary from the business. I make all the decisions about how the business is run and I can take time off and still get paid. Currently, I do all the work on the business including marketing, sales, customer service, IT and tech, admin and finances. Then there is the client work to complete which includes bookkeeping, payroll, VAT returns, Self-Assessment Tax Returns, Partnership Returns, Annual Accounts to Companies House and Corporation Tax Returns. I do have a Business Development Plan with aims, objectives and strategies, which will enable me to delegate each role one by one until the business can run without me. I’ve already made a start on delegating the payroll processing work to my son, who is my first employee and as more work comes in, I will be able to either employ more people or outsource to more experienced professionals.
What would you class yourself as? Self-Employed or Business Owner? Let me know in the comments.
There is no right or wrong answer to this question, everyone has their own reasons for doing what they do. If you are happy being self-employed because you like to be your own boss and you don’t want to work for someone else then that’s absolutely fine, just don’t become the worst boss you’ve ever had and work 24/7 for very little financial gain.
Think about the work that needs to be done in your business and what you can easily and affordably pay someone else to do. The very first thing I outsourced was our cleaning at home because I could pay someone half of what I could earn in the hours it would take me to do it.
How long does it take you each month to do your bookkeeping and accounts yourself? Think about what you could be doing in that time instead and come and speak to me for a free quote, so you can work out if it’s worth outsourcing it. Not only could you be saving time and money, but you will have peace of mind that you have a qualified professional working on your business finances and dealing with HMRC on your behalf.
How much is that worth to you as a business owner?