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A self-employed person is a person who works as a freelancer, an independent contractor, or as the sole proprietor of a business. This type of person may work from a home office or from a separate work space that she rents or owns. It is common for a self-employed person to have a unique or specialized set of skills that allows her to find work without the assistance of an employer or agency. There are, however, some freelancers that use agencies to help them find new projects and to develop new clients. There are many fields in which a person can work as a self-employed person.
It is quite common for a self-employed person to work in a creative field. A freelance graphic designer, for example, is a person who takes on graphic design work from a number of different clients. There are also freelance writers, freelance editors, and freelance translators. In some cases, a self-employed person will use a few skill sets to complete various types of ongoing projects. A freelance writer who also has strong skills in a number of languages, might take on writing and translation projects at the same time.
In many cases, a small business owner is a self-employed person. If a woman were to open a boutique and run it as a sole proprietorship without the assistance of any other employees, then she would be considered a self-employed person. Even though she would be doing business under the name of the boutique, as the owner and only worker, she would be considered to be self-employed even though she is technically employed by the business that she created. Consultants are also considered to be self-employed if they work independently and if they do not have additional employment with another company or agency. A consultant is someone who has a special set of skills or a high level of knowledge about a certain kind of business, product, or industry.
The taxes for a self-employed person are quite different than the taxes of a person who is not self-employed. In the United States, a self-employed person is responsible for reporting income to the Internal Revenue Service (IRS) and for paying self-employment tax. These taxes can sometimes be offset by business-related expenses such as the cost of maintaining a home office and the cost of purchasing equipment that is necessary to one's work.
In my opinion, a person shouldn't become self-employed unless demand for his or her services is high and the competition is low. I've seen good people suffer economically because they wanted to stop working for other people and set up their own shops. Once a former employer becomes a competitor, some self-employed people find themselves at a real disadvantage.
I would say that the most successful self-employed people have found a popular niche market for their goods or services, and don't have to worry about being undersold by a larger company. A self-employed baker who makes customized cupcakes offers something a commercial bakery across town cannot. A self-employed tax preparer, on the other hand, must compete with well-known tax preparation companies with much larger advertising budgets and staffing.
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