Post
Ashley PoynterFeb 205 min read

What am I? How to define yourself as a self-employed individual

Updated: Jun 25

As a self-employed person, you might wonder how to define yourself more specifically. Often, our work titles are woven into how we define ourselves as people. Those with “official” titles from their 9-to-5 jobs may find it easier to explain what they do to people. Those of us who are self-employed might find it a bit, umm, challenging.

For starters, it can be helpful to define what kind of self-employed individual you are. There are a few major buckets that you might fall into.

Freelancer

A freelancer is typically defined as a person that exchanges services in which they specialize for a fee. Freelancers typically work with a number of clients for both short- and long-term projects, though there is no expectation of permanence in those relationships. Freelancers may work out of their home or a co-working space or a coffee shop. In some cases, people freelance as a “side hustle” to their full-time job, though many people freelance full-time.

Benefits

  • Can be an affordable way to start working for one’s self
  • Can get up and running quickly depending on how fast you can find clients
  • Provides more independence and flexibility than a 9-to-5 job.

Downsides

  • May take time to build up to the equivalent of a full-time income
  • Income can be unpredictable
  • Managing multiple clients alone can be challenging and time-consuming

Solo-entrepreneur

The definition of a solo-entrepreneur (or “solopreneur”) can get tricky because there is some overlap with this category and some of the others. For starters, a solo-entrepreneur may define someone who decides to go into business for her/himself. While this is similar to what a freelancer or 1099 contractor does, a solo-entrepreneur may be collaborating with others outside of their business more than others.

He/she may also be interested in using automation to grow the business to a more self-sustaining level. In any event, a solo-entrepreneur does not have other employees and runs the business solo. In many cases, however, solo entrepreneurs may collaborate or work with other freelancers or contractors to help them grow their business, including virtual assistants (VAs), freelance copywriters, marketing consultants, technical support freelancers, bookkeepers, and more.

Many solo entrepreneurs become incorporated or form their own corporate identity as a Limited Liability Corporation, an S-Corporation, or C-Corporation. This is not required to consider one’s self a solo entrepreneur as many do not work through an established legal entity.

Benefits

  • Possibility of growing the business beyond a simple exchange of time and services for fees
  • Solo entrepreneurs operate as their own boss
  • Solo entrepreneurship is more flexible than traditional work
  • Solo entrepreneurs can exercise their vision, creativity, and personal drive as they see fit

Downsides

  • Solo entrepreneurs are solely responsible for the success of their business
  • Growing a business without other dedicated employees can be difficult
  • Income can be unpredictable

1099 contractor

A 1099 contractor or “independent contractor” is someone who engages in nontraditional or contingent work. This is very similar to freelancing and the two may often be used interchangeably. The term 1099 contractor is used because these people receive a 1099 tax form (as opposed to the W-2 that traditionally employed people receive). Unlike freelancers, 1099 contractors are often contracting for one company, firm, or professional association. Like freelancers, they are still able to work when they like and must cover their own taxes and insurance.

There are several professions where people only work as 1099 contractors. Real estate agents are one example. While they may work for brokerages on a “full-time” basis, they are considered 1099 contractors rather than W-2 employees. This means that the brokers/brokerages that they work for do not withhold taxes from their wages.

Benefits

  • Retain the flexibility of being self-employed when it comes to schedule, for the most part
  • Many work for one client or company and enjoy regular work and, therefore, regular income
  • Are not required to be in an office during certain business hours

Downsides

  • Must still pay for their own taxes and insurance
  • Lack of employee benefits, including sick pay, holiday pay, 401k
  • May have to work longer hours than someone who is traditionally employed

No matter how you define yourself, there are certain universal pros and cons to being self-employed. The biggest benefits include flexibility in how and when you work, while the biggest downsides include lack of benefits, namely health insurance.

Decent loves all self-employed people

Decent understands the self-employment struggle when it comes to health insurance, and we wanted to make a change. That’s why we created health plans specifically designed for the self-employed population. Yep—our plans are built just for people like you. We wanted to bring affordable, comprehensive health care to freelancers, solo-entrepreneurs and 1099 contractors (and any other buckets of self-employed people out there). Because working for yourself is hard enough without having to worry about how to pay to stay healthy.

Our plans are centered around Direct Primary Care (DPC), which means that you get to see your primary care physician as often as you’d like. The best part? You pay $0 every time you see your doctor. Doesn’t matter if it’s via a virtual visit, a phone call, text message or in-person...you never pay to see your doctor. We also offer premiums that are up to 50% lower than market rates and you can enroll at any time. Stop stressing about health insurance and get a free quote today!