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Differences between Entrepreneurs, Freelancers, and Businessman

Have you ever been asked if you are an entrepreneur? Are there differences between this fashionable term and being a self-employed person? Or do you consider yourself an entrepreneur? The truth is that they are terms that do not allude to the same thing. We explain the differences between self-employed, entrepreneurs, and businessmen.

What does it mean to be an entrepreneur?

An entrepreneur is a person who undertakes. Beyond this obvious, an entrepreneur is a person who carries out an idea and in the attempt assumes a risk.

An entrepreneur is a baker who opens his store and, in doing so, is putting his economic capital at risk. The person who works for others is also an entrepreneur and decides to launch a novel project within the same company, for example: developing an application that improves communication between employees.

Finally, there is also a close relationship between entrepreneurship and technological advances. The creators of important social networks or technologies such as Bitcoin, Blockchain were entrepreneurs who had not yet created a company.

What is being a self-employed worker?

A self-employed worker is a person who does not have a boss but works for himself. The term self-employed designates those who are self-employed, for which they are enrolled in a special Social Security regime. The self-employed person regularly, personally and directly, carries out an economic activity for profit and without being subject to any employment contract.

The self-employed worker is an entrepreneur always because he assumes a risk to carry out a self-employment business idea. However, an entrepreneur can be one without being a self-employed worker. A person who carries out an idea in the company in which he is hired as a self-employed worker is an entrepreneur, but not a self-employed worker.

Likewise, the creators of technologies that undertook without initially converting that technology into the fruit of their activity were also entrepreneurs, although not autonomous.

And businessman? Is it a different term?

The difference of businessman vs entrepreneur is that the latter creates a business structure to carry out their activity. In this way, the entrepreneur may not be an entrepreneur, but the entrepreneur is always an entrepreneur, for the same reasons as in the case of a self-employed worker.

How to avoid the most common mistakes that the entrepreneur makes before starting his own business

Pay special attention to the business plan

It is the basis and the roadmap of every business project that begins. For this reason, it must be carefully elaborated and correctly define the target audience, the size of the market, the importance of the competition, offer realistic expectations, and explain the sales policy. In addition, it is essential that the wording is clear and precise and that spelling is taken care of.

Delay in applying for grants

These types of errors are very common, so every entrepreneur should be aware of all the updates to the web pages of the different Administrations (central, autonomous, and provincial). It is important to take into account the deadlines and the documentation that must be delivered in each case.

Paying the IAE is not the same as registering in it

Another issue of great relevance is not to confuse the payment of the Economic Activities Tax (IAE) with registering in it. All self-employed and legal companies that invoice less than 1 million euros are exempt from the tax. However, these entities must register with the IAE so that the Tax Administration has a census of all business activities.

To do so, you just have to present the DNI, the Economic Activities Tax model, and model 840 (IAE Declaration) and 848 (presentation of the turnover to calculate the amount to be paid) and can be managed on the Agency’s website Tax.

 

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