The major difference between self-employed vs small business owner
Self employed entrepreneurs are those who do business as a sole proprietor or independent contractor or are in part-time business for themselves. They do not have employees and do not hire contractors in most cases. Most direct sales companies fall in this category and they file a W-9 form with the IRS at the end of the year.
Small business owners are those who own a business and hire employees, contractors, or both. They have Employer Identification Numbers (EINs) in addition to their personal Social Security Numbers that define their company as a business and not an individual earning self-employed income without hiring employees.
Many people start as self-employed entrepreneurs and grow into small business owners over time.