Look at the link I gave you regarding payment amounts. Her opening a business doesn't automatically exempt her from being an employee, especially if the only reason she did it was to accomodate you.
For example, if you hire someone to cut your grass, but he has many other customers, he is not your employee. If this person works for you but is not providing these services for other people and the amount you pay her is over and above the amount in the Household Worker article above, then she is your employee.
