The word soloprenuer is not really a new term as it is easily replaced with the word entrepreneur, a soloprenuer according to the Urban dictionary can be defined as a person who works alone, “solo,” running their business single-handedly. They might have contractors for hire, yet have full responsibility for the running of their business.
Another popular solopreneur website, The Solopreneur Life, defines a solopreneur as:
“A TRUE Solopreneur is someone who has developed a business with NO Employees, that’s Portable, Scalable, and produces Passive Income.”
Investopedia defines an entrepreneur as follows:
“An individual who, rather than working as an employee, founds and runs a small business, assuming all the risks and rewards of the venture.”
Differences between Entrepreneurs and Solopreneurs?
Although every business expert, business publication, and source will have a different opinion on how to define the differences between these two types of business people, this is how our team differentiates between the two.
Entrepreneurs sometimes do hire employees
A major downside of hiring employees is having to file payroll taxes and provide W-2 Forms to employees for every business year they earned income. In other words, these Internal Revenue Service (IRS) documents will have to be filed every year those businesses exist.
Once businesses grow large enough to hire employees, business owners and executives strive to keep those businesses scaled to hire even more employees. Businesses with employees often outsource their payroll and tax filing needs to accountants. Although accountants are liable to get the job done correctly, they often charge a pretty penny for their services.
Businesses can earn more as they hire more employees or independent contractors. However, the responsibilities of keeping up with contractors and employees will add a ton of headaches to doing business.
Solopreneurs reap the major benefit of not having to worry about preparing IRS documents at least once every year.
Solopreneurs have to deal with less financial risk
Assume a business has 10 employees and that each of them is paid just $20,000 each year. If that business fails, the owner is on the hook for $200,000 of wages that year, not to mention any other major expenses related to business overhead or cost of goods sold.
Since solopreneurs, by definition, don’t hire W-2 employees, they are liable for less financial risk than their entrepreneurial counterparts are.
Solopreneurs ideally don’t have to worry about customer acquisition.
At the beginning of their business endeavors, solo-minded business owners have to acquire customers. Once their maximum work capacities are reached, however, solopreneurs don’t have to advertise to draw potential customers in or spend time communicating with them. Solopreneurs can save hours on a weekly basis by not needing to acquire new customers to generate their ideal level of income.
Solopreneurs sometimes work in teams with other like-minded individuals.
Whether they sign legal documents to form partnerships or simply work closely with one another from time to time, solopreneurs often join forces with like-minded businesses and individuals in their lines of work.
In most cases, these collaborators have different skillsets than one another. When handled correctly, such collaborations can be indefinitely ongoing, as each collaborator needs help from their co-collaborators to make ends meet.
Even if solopreneurs don’t produce goods or offer services in tandem with their collaborators, such relationships can still be financially and operationally beneficial. For example, many solopreneurs in the same locale join forces to share market research with one another. This way, they can best meet the needs of their customers.
Serial entrepreneurship can be extremely stressful.
The American Institute of Stress indicates that a whopping 77 percent of United States residents are regularly faced with troublesome physical symptoms as a direct result of stress. Similarly, 73 percent of people experience psychological symptoms like anxiety, depression, and irritability from stress. 76 percent of Americans claim that “money and work” are the primary causes of their overall stress levels.
Newly-founded businesses, or “startups,” as they’re often called in today’s world of business, often fail. Since serial entrepreneurs typically spend their own money in founding businesses, they can only take so many business failures before they’re filing bankruptcy or going broke. The potential of losing financial stability can unarguably be a major source of stress. Further, being preoccupied with the countless variables related to starting and growing businesses can also cause serious levels of stress.
Entrepreneurs are infinitely more likely to face physical and mental problems in their personal lives than solopreneurs are for these very reasons.
How soloprenuers and entreprenuers can enhance themselves and their business.
Branding: As The Balance points out, your first step when growing a new business is to develop your brand. This is your company’s outward face and its first impression on new customers. Branding details include your logo, your mission statement, even your company’s name: any and everything that customers and clients will use to understand who you are and what you do.
Organization: Solopreneurship gives you freedom and creative control, but it also gives you a lot to keep track of. Organization can make or break the business owner trying to go it on their own. Fortunately, there are tools at your disposal that can make keeping track of everything much easier.
Budgetting: Making good use of money is the single greatest challenge solopreneurs face. After all, when you are the only member of the business, you put your finances at huge personal risk. Using budgeting software to keep track of your spending and profits will give you much-needed knowledge and control. By paying close attention to how you use your money, you should be able to tell what kinds of investments are paying off.
Customer connections: One of the greatest aspects of the Internet is the way it has brought people together. Individuals from across the planet can connect with one another in seconds. There has never been a better time for companies to reach a massive audience – after all, the whole world is just the right click away.
Surrounding yourself with like minded people: We’ve all the heard The Beatles song, “With a Little Help from My Friends” and the saying, “There is power in numbers.” Considering the meaning behind either points us to a very impactful source of motivation: friendships.
Hope we all enjoyed this post let us know what you think in the comments section.