Earlier this year, I went to the bank to open an account for my son -- still in shock I couldn't do this online -- and a few minutes into my appointment, the representative helping me asked if I was self-employed.
"No. I mean, I own the company, but the company pays me a paycheck," I fumbled through my explanation.
"So you're self-employed," she shot back.
I'm not sure why it bugged me at the time, but I haven't stopped thinking about the term since.
"Self-employed" and "entrepreneur" aren't synonymous.
When you're starting out, you might be considered self-employed. Or maybe when you've decided to quit your day job and pursue your own interests full-time without collecting a consistent paycheck.
But someone who runs their own business, with employees, in an office building, is no longer considered self-employed -- at least not in my book.
When you're no longer self-employed.
When I think of what qualifies as self-employed, I think of people like rideshare drivers, who make their own schedules, decide how much to work, earn a living just for themselves, and aren't at the mercy of a specific boss.
When you work alone, you're effectively employing yourself through whatever means you've chosen to produce an income. But when you start a business, with other W-2 employees and payroll, you're no longer self-employed. You're employed by a company that you just so happen to own.
Here are the five stages to track your progress into and out of self-employment.
1. The "entrepre-newbie."
At the beginning, you're hungry to learn and you're experimenting. You're figuring out entrepreneurship and how to run a business. Mark Cuban often calls this being a "wantrapreneur," which is clever, but a little demeaning. So, I called it being an "entrepre-newbie."
In this phase, you might be more of an observer than anything. Soak in those podcasts, devour a few business books, and spitball your next big thing.
2. The night-shifter.
Maybe you have a new business, but you're not quite ready to make the leap to full-time. You're in the hustle phase -- the scrappy, exciting time in a business when every idea is a massive breakthrough and every dollar is enormous validation.
Chris Guillebeau, author of The $100 Startup, has a podcast called Side Hustle School that features businesses making the transition through this exact phase, and it's worth a listen.
3. Glorious self-employment.
When you finally figure out how to cover your living costs -- or better, surpass your old salary -- by creating something valuable enough for someone to pay for, you've made it.
It's hard work, but this phase might be the easiest of anything ahead. With no one else to support, low overhead, and the flexibility to be your own boss, a lot of entrepreneurs choose to make this their final destination. If that's you, your job is to build the best lifestyle you can around the most predictable version of your business.
4. The business owner.
At this stage, you go from cobbling together an income to paying yourself a salary -- a regular paycheck, not spontaneous bank account transfers.
Here, you likely have the stability to hire other full-time employees, increase your overhead, and expand your operations. Your business is now beyond you and you're no longer self-employed.
5. The CEO.
As you rise in the ranks of your own company, your goal is to become the CEO. Maybe you never plan to IPO or build a team of 500 people, but a true CEO isn't just a business owner. She is a strategist. She is a visionary.
You might assemble a board of advisors to guide your direction. You might raise money through investors. And in some way, more people in your organization must take "ownership" of what you're building together, so the solidarity of "owner" just doesn't seem to fit any longer.
Entrepreneurship is a spectrum. Self-employed is a milestone, not a moniker. There's my explanation -- so take that, big national bank.