If you suspect that businesses are being founded every day, you’re probably right. More than 4.3 million applications to open companies were filed in 2020 alone. And signs indicate that more dreamers and creators will continue to jump into the exciting world of being their own boss.
Yet, being in charge doesn’t necessarily mean you have to take on the role of a corporate CEO. Many people with entrepreneurial leanings prefer to be solopreneurs rather than entrepreneurs.
Though you may think the difference is subtle, it’s not. The two types of business ownership have some similarities but are more dissimilar than you might have imagined.
Table of Contents
- Solopreneur vs Entrepreneur
- Does Solopreneur or Entrepreneur Fit You Better?
- 1. Do You Have Hopes of Managing a Team?
- 2. Are You Already Planning an Exit Strategy?
- 3. Are You Willing to Be the Only Marketer and Salesperson?
- 4. Do You Have the Time to Be a Solopreneur?
- 5. Do You Have Little Desire to Diversify?
- 6. Do You Have the Right Personal Branding Strategy?
- 7. Are You Okay With Working Alone for Long Periods?
- Final Thoughts
Solopreneur vs Entrepreneur
Both solopreneurs and entrepreneurs build real businesses. Both strive to build businesses that can be sustained on their own and require minimal oversight to maintain. Both solopreneurs and entrepreneurs are building businesses that can be sustainable with minimal oversight.
What Is a Classic Entrepreneur?
Let’s start by diving into the traditional view of entrepreneurship. Generally speaking, an entrepreneur is someone who opens a business. It might be a business developed around a unique concept, or it might be a franchise that has a bit of clout already.
In other words, the auto mechanic who opens a shop down the street and the person who erects a McDonald’s at a busy intersection can both be categorized as entrepreneurs.
Usually, entrepreneurs of this caliber have a few goals in mind. First, they want to open a company and grow it. Typically, that means having a facility, investing in tools, and hiring staff.
Secondly, they want to make a profit and—if all goes well—construct a self-supporting financial runway that will allow them to scale operations in the future.
Finally, they may want to sell their business eventually. Countless eager entrepreneurs follow the track of serial entrepreneurship, which is the act of successively opening and selling multiple companies.
Where Does a Solopreneur Fit Into the Picture?
A solopreneur is a type of entrepreneur. Put simply, all solopreneurs are entrepreneurs, but not all entrepreneurs are solopreneurs.
What sets a solopreneur apart from an entrepreneur? A solopreneur starts a business with the intention of being the sole proprietor and employee of the company. This means that the solopreneur does all the work, keeps the books, and outsources rarely to other professionals.
As you might guess, freelancers and independent contractors tend to be solopreneurs. They have a skillset and a vision.
However, they aren’t interested in building an organization only to sell it later. They’re satisfied to ply their trade alone and make an earning without the need to bring aboard a team.
Does Solopreneur or Entrepreneur Fit You Better?
Figuring out if you want to be a traditional entrepreneur or a solopreneur is important, especially at the beginning of your entrepreneurship journey. Your preference will dictate everything from how you market your business to the way your taxes are structured.
To help you decide between these two types of entrepreneurial endeavors, below are seven questions to ask yourself.
1. Do You Have Hopes of Managing a Team?
Many people are thrilled at the prospect of being able to coach others and help them perform their best work. Other people would rather just do everything themselves and not worry about supervising even one other person.
Have a transparent, candid conversation with yourself. Do you feel that your purpose is to transfer your knowledge to others and watch them grow? If so, you may find classic entrepreneurship exciting and fulfilling.
On the other hand, if you would prefer to spend little time mentoring colleagues, you may find solopreneurship a better fit. For solopreneurs who get lonely not having a bunch of employees under them, they can be a part of a company board—a new trend is being a part of a leadership council for a company.
This can scratch the itch of helping teams or companies that have a lot of employees while still keeping your autonomy as a solopreneur. It’s important that if you choose to be a solopreneur, you are honest about loneliness and put things in place to have the connections you may miss.
2. Are You Already Planning an Exit Strategy?
It only takes watching one episode of “Shark Tank” to begin hearing about exit strategies. Many entrepreneurs go into business intending to exit sooner rather than later—hopefully making a lot of money in the process. The thought of building a company to be so enticing that it can be bought by someone else can be thrilling for some. However, it may leave you cold.
Why wouldn’t you want to exit your business? Quite honestly, if you’re a solopreneur, it wouldn’t make sense.
Consider if you offer graphic design services. You do all the graphic designing. What would you sell? Your main business asset is yourself.
Therefore, you need to figure out why you’re getting into entrepreneurship in the first place. If you just want to avoid having someone breathing down your neck, you probably don’t care much about selling. You just want the freedom to deliver your work.
3. Are You Willing to Be the Only Marketer and Salesperson?
This question is bigger and more important than it might seem. Many people who want to offer their abilities on the freelance marketplace are overwhelmed by advertising and sales considerations.
When you’re an entrepreneur, you can hire someone or a team of experts to do your selling. When you’re a solopreneur, you have to hustle without help.
To be sure, you can find ways around this issue. For example, there are more than four million active sellers on Etsy. You can be fairly certain they don’t all have marketing degrees or backgrounds.
Instead, they leverage the platform to help them connect with buyers. Certainly, they have to do their part by uploading images and writing compelling content. Yet, they don’t have to buy listservs or push out Google ads unless they want to.
4. Do You Have the Time to Be a Solopreneur?
When a company is based around one person, it can take up a lot of time. If you don’t have command of your time or don’t set boundaries, you will set yourself up for failure. Both Google Calendar and Outlook Calendar can be used for time blocking, and they also have tools to help track your time.
As an entrepreneur, you can afford to not be as obsessed with time. But as a solopreneur, your time is gold, and you can’t not use technology to organize and track how your time is spent.
Your calendar is a central hub to identify where you gravitate in your interests. Before making your decision on being a solopreneur, look at how you have spent your time in the last year. Do you lean towards working in teams or group situations?
If a lot of your time is naturally spent by yourself, then a more natural fit would be to become a solopreneur.
5. Do You Have Little Desire to Diversify?
As the founder of a company, you have a lot of wiggle room to add more products or services to your offerings.
For instance, say that you sell hiking gear and equipment. Eventually, you may want to expand into more specific markets like hiking items for dogs or specialty outdoor footwear.
It is much easier to diversify your portfolio when it’s not just you doing everything. Remember: You only have 24 hours in your day. As a solopreneur, you’ll have to juggle the time and structure it to complete projects.
Though you may take on interesting projects that expand you beyond your original scope, you probably won’t want to dilute your lineup too much.
6. Do You Have the Right Personal Branding Strategy?
It’s important to understand the differences between a personal branding strategy for an entrepreneur and a solopreneur. For a solopreneur, it’s ok to have the brand based around you. However, things are different for an entrepreneur.
In this situation, if you base it too much on yourself, then the company can be reliant on your brand. For either role, make sure you have the right personal branding tools to make it easier on you.
Remember that your personal brand is not about ego. It’s about being a vehicle for your company to accomplish business goals. Examining what you gravitate to could help you with your decision on being a solopreneur versus an entrepreneur.
If you don’t like any attention on yourself, then being a solopreneur could be a challenge. Understand how digital PR can affect your brand and whether or not you want that attention around yourself.
The future of PR is heavily affected by the personal brands of the leaders. If you choose to be a solopreneur, you have to be the one this PR strategy is centered around.
7. Are You Okay With Working Alone for Long Periods?
Entrepreneurs can lock themselves in their offices or work from home from time to time. Nevertheless, they will probably encounter others during their normal comings and goings.
Solopreneurs? Not so much. Solopreneurs can expect to spend days working by themselves.
Are you ready for this kind of isolation? As we saw during the pandemic, about a third of young people felt lonely due to a lack of social connections.
If you feel disquieted being alone, you can still be a solopreneur by circumventing negative emotions and renting a co-working office space or working in a busy coffee shop instead of your dining room table.
Launching a company isn’t a one-size-fits-all experience. Before starting an entrepreneurial adventure, think about what kind of entrepreneurship will suit you most. Then, become the best entrepreneur or solopreneur you can be.
Featured photo credit: Austin Distel via unsplash.com
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