7 Qualities of Solopreneurship
Like Entrepreneurship, But Solo
Like Entrepreneurship, But Solo
Solopreneur or Entrepreneur: The Differences
“Solopreneur” is a relatively new term, an interesting mix of the word soloist and the word entrepreneur. Technically, all solopreneurs are entrepreneurs, but not all entrepreneurs are solopreneurs. Both solopreneurs and entrepreneurs are founders of their companies. However, a solopreneur runs their business independently, without a co-founder or official W-2 employees. Entrepreneurs do not necessarily manage all aspects of their businesses independently. Solopreneurs perform everything related to their businesses alone.
Solopreneurs manage all details of their business, although many hire contractors or freelancers to perform some of the necessary tasks that free up time for other work. Solopreneurs are responsible for creating, producing, and delivering the products and/or services offered by their companies.
Entrepreneurs, on the other hand, hire and manage a team and outsource product and service fulfillment activities. Entrepreneurs almost always focus on the managerial and/or leadership roles of running the company while leaving the details to their employees.
Solopreneurs usually focus on specific business offerings and on building a strong client or customer base to ensure a profitable business while continuing to run things as a soloist.
Entrepreneurs often have a team that includes employees who can specialize in one area, thereby making it easier for the company to offer more services. If the company owner wants to add more options, more employees can be hired.
Most solopreneurs are not looking to greatly expand their companies past the size that they can handle alone (with maybe some assistance from contractors). Most solopreneurs are not looking forward to handing down their company to their children or other family members or even looking to sell their company to a larger entity at one point. For solopreneurs, being and staying independent is the primary driver of their chosen business model.
Many entrepreneurs, on the other hand, set a goal to build and scale up their company so that it is saleable at a profit at a later date. Other entrepreneurs plan their company so that it can be taken over by a family member or other entity. A family succession plan is built into their business model.
Because solopreneurs do not have employees, they do not have to worry about payroll, benefits packages, and tax responsibilities. Most solopreneurs operate as LLCs (Limited Liability Companies) or sole proprietorships, so their financial management needs are relatively simple, even if their business involves keeping track of inventory and product fulfillment.
Entrepreneurs running a business with employees, on the other hand, have to ensure that their business is profitable, have to make regular payroll and tax payments, and offer some sort of a benefits package to their employees.
Depending on their product and services offerings, many solopreneurs can operate their businesses as location-independent or can work from home. Almost 61% of independent businesses are home-based.
Larger companies with employees often have to think about workplace requirements, depending on their business offerings. Since the impact of COVID-19, many companies are allowing their employees to temporarily work from home, and that model may become permanent for many companies and their employees.
However, if the company creates and sends out physical products, the entrepreneur must need space for those activities as well as appropriate work accommodations for those employees who must work onsite.
When I started my business in 2008, I always planned to be a solopreneur, and I worked from my home office. However, after several years, I moved into a wonderful coworking space that offered networking opportunities and the energy and synergy of working around people, all of whom were also solopreneurs and entrepreneurs of all sizes.
After COVID-19 was officially declared a pandemic, the coworking space closed temporarily and I eventually moved everything back to my home office without missing a beat with running my company. I certainly miss my friends and colleagues, but I was glad that I could so easily make the transition because of my business model.
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Solopreneur or Entrepreneur: The Similarities
All solopreneurs and entrepreneurs start their businesses after identifying a perceived need in their preferred industry and then developing a product or service to meet that need. Both solopreneurs and entrepreneurs manage their own businesses, invest time and money at the startup phase, assume the financial risks, and receive the financial rewards.
Solopreneurs and entrepreneurs go into business to control their own lives and their own careers. Many have previously worked for others as employees and decided that they wanted to be their own bosses and manage their own time.
Solopreneurs and entrepreneurs, because everything depends on them, are very motivated to come to work and make things work. Both types of independent business owners truly believe in what they do and are usually intrinsically motivated by more than just money or a salary.
In 2016, according to Inc. Magazine, 40% of new business startups were by women, and Black people and other people of color made up 40% of all types of entrepreneurs.
Solopreneurship and entrepreneurship were both in a steep decline during the Great Recession of 2008–2010 but then grew exponentially from 2011 through 2019 because of the lingering positive effects of the economic growth from 2009–2016. However, due to COVID — 19 in 2020, many independent businesses are severely suffering again. Skills, experience, expertise, and access to capital will be the determining factor for how many businesses, independent or not, will survive the pandemic and coming recession.
The type of legal structure you choose for your business is an important determinant of whether you are considered a small-sized solopreneur or larger-sized entrepreneur.
Sole proprietorship If you are a sole proprietor, you are the business personally and legally, and you are personally responsible and liable for all debts and losses incurred by your company. Outsiders usually see you as a person before they see you as a business entity.
LLC (Limited Liability Company) When you set your company up as an LLC, you are no longer personally liable for any legal or financial problems with the business. An LLC is more costly and time-consuming to set up, the tax advantages and owner protections are worth it.
Partnership A partnership is considered a single business entity but involves at least two people who jointly contribute to everything about the business and share equally in the profits and the losses.
Corporation A corporation is a legal entity completely separate from the business owners and has the same rights and responsibilities as an individual, legally and financially.
Whether you choose to be a solopreneur or start and grow a larger company as an entrepreneur, your decision will depend on your reasons for going into business in the first place, and on your plans for your company in the future.
While solopreneurs and entrepreneurs revel in their independence, they also must be ready to accept the uncertainty and financial and professional risks that go along with being their own boss.
It is good to realize that no matter which business model you choose to pursue, being a business owner is a journey and a learning process. Everything, good and bad, positive or negative, depends on you.
Work with Me: Customized Business Coaching and Consulting
Through Your Business Your Brand Creatively, I work specifically on branding and marketing “for the rest of us.” If you are looking for coaching or consulting assistance for your creative, solo, or small business, booking a “Pam’s Power Hour” is a great and affordable place to start! Weekly appointments are available: book your slot here.