The term solopreneur is gaining in popularity in the modern economy, where up to a third of the American workforce is working for themselves. The words entrepreneur and solopreneur are often used interchangeably, but in practice and mindset, are really quite different.
The definition of an entrepreneur is fairly well understood; they’re a person who excels at networking, has a vision for their company, and is excited to lead an incredible team. They could be a man or a woman driven by a business vision. Let’s look at who a solopreneur is and how solopreneurs build their businesses.
Running the business alone
A solopreneur conceived of the business, owns the business and runs the business. They are the primary driving force behind the business. Technically, it’s a one-man show that brings together all aspects of business activities.
This is one of the places where solopreneurs and entrepreneurs look similar but evolve differently. Entrepreneurs might start out working for their company alone, but they are generally looking to hire a team, and are more than ready to delegate tasks to that team once they’ve been onboarded. A solopreneur, meanwhile, is more than content to run their business alone indefinitely.
Not looking for a buyout
Not every entrepreneur is waiting for a buyout, but many are, especially in the tech sphere. Companies are built to be attractive to venture capitalists, and entrepreneurs are looking to create and demonstrate the value of their idea before they move on to the next great concept.
Solopreneurs, meanwhile, tend to be more devoted to this specific idea, and are less likely to sell it, even if the price is impressive.
Collaboration instead of hiring
There comes a point in every business where the owner can’t do everything. Entrepreneurs often use this moment to begin hiring their team. Solopreneurs, meanwhile, may contract out things that they need to, such as accounting or content marketing, but they tend to have a tighter focus on controlling their idea and their concept. If they don’t do it, it doesn’t get done right.
They are much more likely to choose SaaS solutions rather than out and out outsourcing whenever possible.
Solopreneurs tend to be specialists. Many freelancers are solopreneurs, running their own businesses while they do all the work necessary. This is helpful because there are limited amounts of the other jobs needed. Managing one’s accounting is easier when there’s no inventory, no significant overhead, and no payroll costs. Marketing is easier to manage when there’s just one service to offer.
Many solopreneurs don’t even need to engage in formal marketing; they may have a social media strategy and a website, but they often do most of their contract hunting through connections, referrals, and networking.
Entrepreneurs tend to be jack-of-all-trade types, doing a little bit of everything to make things work while they get the company off the ground.
Low cost, high risk
Solopreneurs can often start their business for very little money. For many designers, writers, consultants, and similar professionals, all the tools of their trade are already present. At most, they need a computer and an internet connection.
That makes these sort of positions ideal for those who have recently become unemployed, who are parents looking to build a career, or who otherwise don’t have the money or interest in starting a franchise business or other type of company.
But while an entrepreneur can more easily incorporate his business and protect his personal assets, solopreneurs are generally much more exposed to financial risk. They are less likely to be able to access bank loans that entrepreneurs (who already struggle in this arena) but often are still unable to access nontraditional lenders.
Their capital needs are small, but they may still be unable to afford the cost of marketing, or be more easily sunk by unpaid invoices. Because most solopreneurs are unlikely to need to incorporate, their personal assets can be at risk if their business flounders, especially if they try to right the ship with personal credit cards.
Solopreneurs, freelancers, and the self-employed are really all three different names for the same basic thing; a person who is working for themselves in a specialized skillset, finding their own clients and being their own boss. These are people who tend to work incredibly hard, for themselves, and may struggle to keep their business going through anything other than sheer force of will.
Entrepreneurs and solopreneurs are similar in many very crucial ways. They work hard, they believe in their vision, and they often see an opportunity for disruption and change in their industry. Because their businesses are small and nimble, they have the ability to pivot in the marketplace and embrace adaptations as soon as they are reasonable. Bigger companies often need much more time to change direction.
In many ways, both solopreneurs and entrepreneurs are the backbone of the American economy. Not everyone has the inherent qualities that make a good solopreneur, but those who do are incredibly important to the development of the financial system.