Money-Smart Solopreneur. Laura D. Adams

for corporate executives who want to improve their leadership skills. Diane conducts calls with her clients from home or travels to their offices for meetings. She works alone and bills clients a monthly retainer to consult with them on an ongoing basis.

      Entrepreneur

      This is someone who creates and manages a business. The term is often used to describe someone who takes on risk or has an innovative idea. However, it’s an umbrella term that can be used for anyone who is in business, with or without employees.

      Example: Bill used to live in Ecuador and saw the potential for a hostel and restaurant that would cater to American tourists. He and a family member invested funds to open the Magic Café in downtown Quito. Bill manages a team of workers from home and makes quarterly trips to Quito to meet with his staff.

      Founder

      This is someone who has a business idea and establishes a company. They take on risk and typically recruit a team to help execute their idea. A founder splits the original ownership in some way and may bring in outside investors to build the enterprise.

      Example: Jane used to be a sales representative and buyer for a floor covering distributor. She saw a need in the marketplace for environmentally friendly flooring products and decided to found her own company, America Green Floors. She brought in three partners to invest in her startup and take leadership roles. Each partner has a 25 percent interest in the company’s profit. Jane manages all aspects of the company’s product procurement from her home office.

      Freelancer

      This is someone who often works alone in a creative field, such as writers, designers, software developers, and producers. A freelancer typically provides services to businesses without a long-term commitment to any one client, and usually seeks out assignments and clients that give them maximum work flexibility.

      Example: John is a freelance editor and writer who creates blog posts for a variety of website clients in the automotive space. He refers to himself as a self-employed freelancer, which sends the message that he works on multiple projects simultaneously. John primarily works from home but also uses a local co-working space for networking opportunities. He takes a month off each year to travel and visit family.

      Independent Contractor (IC)

      This is someone who may work alone or with hired employees to provide services for one or more businesses. An IC is similar to a freelancer but tends to have longer-term commitments and fewer clients.

      Example: James is a lighting technician who rigs stage sets for theaters and entertainment venues. He typically contracts to work with a particular company for their entire production season and bills by the hour for his services.

      On-Demand Worker

      This is someone who typically works as an IC for an on-demand company or app, such as Uber, Instacart, or TaskRabbit. They fulfill consumer demand for products and services through networks created by technology.

      These gig-based businesses are electronic middlemen, taking a cut of the price to connect customers with providers. They’re also known as the creators of the “sharing economy,” because they share access to goods and services through online platforms.

      Example: Dorie is a stay-at-home mom in Denver who drives for various ride-sharing services, such as Uber and Lyft. She works for a few hours in the evening after her husband gets home from work. Dorie enjoys getting out of the house, meeting people, and earning a commission on every ride she completes.

      Permalancer

      This is someone who works as an IC for one company over a long period of time. The word is a mashup of “permanent” and “freelancer.” If you do a significant amount of work for one client, you might call yourself a permalancer.

      Example: Steve is an audio engineer who works with individuals and companies to create audiobooks. He’s been working with a large publishing house almost exclusively for the past few years as the demand for audio products has grown. Steve bills the publisher a set rate per completed audio project.

      Self-Employed

      This is a broad term for someone who works for themselves. They earn income from their trade, profession, or business, instead of from an employer. They are their own boss, and no one else controls how they work. They may choose to work alone, with partners, with hired employees, or with other self-employed people. And they might call themselves any of the terms in this section, such as a consultant, freelancer, IC, or entrepreneur.

      Example: Barbara is an independent housecleaner who maintains regular appointments with a portfolio of clients. She works full time and bills by the hour for her cleaning services.

      Side Hustler

      This is someone who has a full-time, W-2 job and runs their own business on the side. They might offer a product or service that they intend to eventually develop into a full-time business, or they might just enjoy having an additional income stream. They could work on their side gig alone, with partners, with hired employees, or with other self-employed people.

      Example: Justin has a nine-to-five job working for a fintech company as a marketing director. He also provides marketing services and consulting to several small businesses on the side. He typically charges a monthly retainer or a project-based fee, depending on the scope of his clients’ needs.

      Small-Business Owner

      This is a general term for someone who works for themselves. They make decisions for the business and enjoy its profits. They might work alone, with partners, with hired employees, or with other self-employed people. Note that the U.S. government defines a “small business” as having up to 500 employees.

      Example: Betsy runs an antique shop in a downtown main street location. She has two full-time employees, including herself. When the shop’s profits are higher than expected, Betsy also takes dividends from the business.

      Solopreneur

      This is a broad term for someone who is self-employed with no employees. It’s a mashup of solo and entrepreneur, meaning that they run a business single-handedly. However, solopreneurs commonly work with other business owners to achieve their objectives. Solopreneurs are typically service providers with specialized skills, such as consultants, virtual assistants, writers, and coders, who want a flexible and straightforward business.

      Example: As a writer, speaker, and spokesperson, I work with a variety of clients on short-term and long-term projects and campaigns. I don’t have employees, but I commonly use other businesses and ICs, such as website designers, social media marketers, and accountants, to assist with my work.

Tips for Defining Your Business

      The bottom line is that whatever you choose to call yourself, if you earn income on your own and not as wages from an employer, you’re a business owner. There is no legal or financial difference between being a business owner and being self-employed or an IC. The different terms for self-employment have gray areas and overlap. Ultimately, how you represent yourself to potential clients or fellow guests at cocktail parties is entirely up to you.

      If you’re still not sure how to label your business, here are some tips:

      $ Use the same business label as your competitors. If you have competition or know successful people doing similar work, find out what they call themselves. Search on LinkedIn or Google to read their business descriptions or bios for clues about the norms in your industry. If you call yourself a solopreneur because you think it sounds more prestigious than “freelancer,” it could hurt your business prospects if your potential clients aren’t familiar with that term.

      $ Use the same business label your potential clients would use. The language you choose to describe your business should match what your potential clients and customers would search for. Do they type “independent contractor” or “consultant” into search engines? If you’re not sure what your ideal clients are looking for or where they would find you, the easiest way to find out is to ask them. And when a new