What is the Difference Between Working From Home and Being Self-Employed— and Which is Better?

Trisha Miller  | 

As you may know, working from home has gained popularity in the last several years. As such, there have been developments in several different areas of at home work, which can be confusing for anyone to understand. Working from home, self employment, direct selling — these are all terms that seem to be used interchangeably from time to time, so it can be hard to comprehend the difference. Let’s take a closer look at the distinction between working from home and self employment, as well as why one might be more beneficial than the other.

How does being self employed work?

Self employment has to do with owning your own business. You are your own boss. You make your own hours and you determine what work needs to be done on a daily basis. You aren’t governed by anyone else’s ideas about what’s best for your schedule and your business.

However, in order to be self employed, of course you’ll need to start a business first. There are endless possibilities when it comes to becoming a business owner. You might come up with your own idea and decide to build it from the ground up. In addition, if you’re looking for home based self employment options, there are a plethora of direct selling companies out there that allow you to be your own boss without having to create an entire business from scratch.

What is a Direct Selling Company?

Direct selling businesses are companies that already have a product or service base created. They will then allow you to sign up as a seller (consultant, representative, expert, specialist, agent — each company has their own terminology for business owners) and run your business from home. Although the company provides materials for you to successfully run your business from home, you’re not an employee of the company. You’re considered a business owner and are still responsible for making your own hours and filing your taxes accordingly.

For some, this might feel a bit too limiting on your ideas. In this case, if you’d like to become self employed, you’re likely going to want to think about pioneering your own startup. That sounds exciting doesn’t it? Well, you have the power to do it. What’s more, you can do it all from the comfort of your own home.

Starting Your Own Business

Starting a business at home can mean a lot of things these days. Perhaps you’re interested in hand crafting goods that people can purchase from an online store or maybe you’ve gotten really good at creating art that people can use for all sorts of projects. Whether you want to be a designer, creator, or other service provider, you can use your talents as a launching point for your own business.

It all starts with an idea and then the sky’s the limit. You have complete creative control over your website, e-commerce platform, financial planning, marketing, and more. In addition, you can do it all right from home. This way, you’ll never feel like you’ve stepped outside of your element because you can completely go at your own pace. You decide how quickly you expand and what that might look like as a home based business person.

How does that differ from a working from home?

Typically speaking, if you work from home, you still have a traditional employer. You have a set schedule and assigned duties from your manager. You get to choose where you work and possibly even what hours you work. You might be most comfortable going to a nearby coffee shop or you could choose to set up an office at home. Working from the couch in pajamas is always a comfortable option as well.

Today, there are so many different options for jobs that allow working from home. Everything from marketing to call centers, IT work, sales, design, translation and more. The range of companies that are accepting remote work is expanding by the day. So, it’s easier than ever to land a job working from home.

It’s good to keep in mind that you’re still going to be working in a “remote office” environment. What I mean by that is you’ll still be surrounded by all the typical office players. You’ll have coworkers, managers, department heads etc. that you’ll need to interact with and communicate with. Essentially, the idea of an office is still there, but the physical boundaries of a cubicle have been broken down.

Are there benefits to one over the other?

Absolutely. The first and most notable different is going to be the pay structure. When you are self employed, you’re not necessarily going to get a paycheck every two weeks. Your pay could be sporadic and it’s now your job to make sure that you divide your funds in a way that gets you through the month. You might not always be able to count on steady income 100 percent of the time.

On the flip side of that, when you work a traditional job, you can only work a certain amount of hours per week and you can only earn so much from those hours. As a business owner you might be able to end up living the dream – work less hours, but actually make more money. You’re not limited by the hourly rate that your employer has created. You can make your own hours and charge your own rates for your time, goods, and services.

In addition, working from home has a completely different job structure than if you work in an office. You’ll need to learn to prioritize your daily tasks in order to make sure your work gets done. However, you may have a better idea of the tasks that should be done on a daily basis, simply because you have instruction from your manager. When you are self-employed, there’s no one to tell you what needs to be done. You’ll have to set up a structure for yourself and make sure that time split between tasks is compartmentalized evenly.

There you have it! You should now understand all the differences between self employment and working from home. How you do it is completely up to you, but hopefully now you have some ideas about what best suits your needs and schedule. There are advantages and disadvantages to each situation, but if you have the drive and the dedication you can make these opportunities work for you.


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Trisha is a writer and blogger from Boise, ID. She is a dedicated vegan, an avid gamer, cat lover, and amateur SFX artist.

This post was updated December 21, 2017. It was originally published December 23, 2017.