If you dream of running your own business but just want a stable source of income rather than an empire to manage, don’t worry — you don’t have to become the next Steve Jobs. You can become a solopreneur instead.
You’re not alone in the desire to be your own boss. Entrepreneur statistics show that 582 million people worldwide have sought to go their own way and create a business. Becoming an entrepreneur is attractive, but perhaps your entrepreneurial mindset involves a bit more solitude.
Here’s what a solopreneurship is all about — and how to figure out if this is the right lifestyle for you.
Overview: What is a solopreneur?
A solopreneur is someone who establishes and runs their business independently and has no co-founder or employees. Some examples of solo entrepreneurship include freelance writers, consultants, or graphic designers. These individuals manage all aspects of a business and don’t outsource work to anyone.
This limits their capability for growth but increases the level of control they have over everything involving their business, including interactions with clients and creative decisions.
Solopreneur vs. entrepreneur: What’s the difference?
While all solopreneurs are entrepreneurs, not all entrepreneurs are solopreneurs. A bootstrapping solopreneur does everything, but an entrepreneur may choose to hire employees to handle other aspects of the business, freeing them up to continue to grow and expand the business.
Solopreneurs are founders and workers who want to focus on a single business, while an entrepreneur may have dreams of creating an empire.
The 3 benefits of being a solopreneur
Solopreneurship is very attractive for certain personality types, particularly those who want control and don’t want a lot of headaches from managing people. Three key benefits in particular make being a solo business owner a good option for some.
A solopreneur is their own boss, so they choose their own schedule. They have greater control over hours and can establish a better work/life balance. They don’t need to adhere to a 9-to-5 schedule. This is an ideal option for night owls who work better during the evening hours, or for stay-at-home parents who find it difficult to carve out time to work during the day.
2. Earning potential
An employee has a set salary and gets limited pay increases, but solopreneurs have a much higher ceiling for earnings and can increase their own compensation rapidly by bringing in new clients. Unlike employees, who have the surplus value of their labor collected by the employer and receive only a salary in compensation, solopreneurs earn and enjoy the full value of their labor.
3. Location independence
Employees must go to the office at certain times, but solopreneurs are not tied down and can work from anywhere as long as there is a Wi-Fi connection. They might choose to work at a home office, a local cafe, or from a different location every month as they travel the world in a solopreneur’s dream scenario.
Solopreneurs are able to work and travel at the same time, as opposed to employees who must request time off of work and are often limited to just two or three weeks of vacation time per year. Ever since the COVID-19 pandemic began and offices around the country shut down, this option has gotten even more attractive.
The 3 disadvantages of being a solopreneur
But it’s not all roses for solopreneurs — there are some real downsides to this lifestyle that everyone should consider before jumping into it.
1. Lack of collective help
A solopreneur is all alone in the business and has all the responsibility. There’s no team feedback or support, and if they don’t have the knowledge necessary for, say, the marketing research process, they’re stuck until they find help.
They don’t have as much capacity for completing a project and may find that they have to scramble to find a freelancer or expert to help them anyway, sometimes paying out the nose for last-minute help.
2. Income flow and compensation
One benefit of an employee’s salary is that it’s consistent — you know how much you’re getting each month. Solopreneurs, on the other hand, may have inconsistent income and may constantly wonder where their next check is coming from.
Clients that pay slowly also create cash flow problems and a lack of capacity may cause the solopreneur to miss opportunities that an entrepreneur would be able to take advantage of because they have help.
Also, solopreneurs don’t get access to employer-provided benefits like health insurance and may have to spend a large amount of money on these benefits out of pocket. This is one of the challenges faced by entrepreneurs and solopreneurs alike.
3. Time investment
Solopreneurship can be positively grueling, with long hours spent building the business. The solopreneur is responsible for the marketing plan, sales, making the website, completing projects, billing, and everything else involved in a business.
They may work harder for less initially as the business grows, and it’s not uncommon for a solopreneur to find themselves in an endless cycle of trying to battle through a 14-hour day of putting out fires only to do it all over again the next day.
How to become a solopreneur
If you understand the benefits and drawbacks of being a solopreneur and still want to jump in with both feet, here’s a step-by-step guide on how to do it.
1. Establish a business idea
First, you need a business idea. Identify your skill sets and determine the nature of the service or product you’ll provide. Is there significant demand for it? Is it realistic for you to provide this product or service as a solopreneur, or would you definitely need help? Remember, passion alone is not enough — there has to be a market for it, and you have to have the capacity to do it.
2. Do your homework
A business idea is a good start, but many people have ideas that don’t go anywhere. Do your homework to understand how the market works, and figure out what customers need. Research the competition and determine what niche you can fill.
How can you distinguish yourself from your competitors? What is the right marketing and sales approach for your business? Once you’ve settled on this, work on pricing and timelines for rolling out your products or services.
3. Test the market
Don’t just go all out right away — test the market first and gradually get your feet wet. If you currently have a day job, keep it for the time being until you can replace it with your solopreneur endeavor. Determine whether customers are receptive to your approach and then assess how you’re performing against the competition. See what works and what doesn’t, and determine if you would like working alone.
4. Formulate a budget
Create a budget that lays out what the input costs are for the business, and factor in your personal costs as well — rent, utilities, groceries, and everything else.
Figure out what you can realistically charge in terms of rates or prices, and also determine whether you can do everything in one location or if some travel will be necessary. The best idea is to have at least six months of savings put away for living costs before going full-time on your own.
5. Build your brand
Building a brand is essential for any business, and a solopreneur is no exception. Always market yourself online, and utilize social media to spread your message and interact with potential clients. Network with past employers and colleagues, and see every moment in your life as an opportunity to market yourself. Be creative with your strategy.
6. Analyze progress
After a little while, analyze how well things are going. Determine what appears to be working and what you will need to improve, such as in the areas of sales or administrative tasks. Keep a close eye on your budget and evaluate your mental and emotional well-being. Ask clients for feedback on what you’re doing well and what you could do better, and check your metrics compared to the competition.
7. Rinse and repeat
Stay vigilant throughout your solopreneurship, revisiting each step as needed. Tweak your approaches based on the feedback you receive, and assess your own performance honestly. Expand or shrink your budget based on how successful you are at bringing in clients, and alter branding as you further refine your products or services. Consider getting a solopreneur coach or mentor to help you along the way.
Want to become a solopreneur? Get the tools first
Even if you don’t want other people to help, you need technology help to be a successful entrepreneur. Software is a solopreneur’s best friend, keeping everything organized and helping you focus on the tasks that make you money rather than all the administrative stuff that bogs you down.
Project management software will help you manage and execute any project in your business. CRM software will help you create a sales strategy and execute it. E-commerce software will help you run an online store for your products. Accounting software will ensure all of your numbers line up and your budget is accurate.
Marketing automation software will help you get your name out there and build your brand. The Blueprint has reviewed software in many other categories as well, so check out a few and give them a test run to determine if they will be a good fit for your budding solopreneurship.
View more information: https://www.fool.com/the-blueprint/solopreneur/