Solopreneur: Definition and difference from entrepreneurs

Although not an official term, the concept of  “solopreneur” is popular. Solopreneurs are a subset of entrepreneurs. They are individuals who are solo employees in their businesses.

A record number of people applied for business licenses in 2021 and 2022. A big reason for this increase of businesses was the pandemic, but that’s only part of the story. Tech advancements allow people to monetize their skills and time more easily. Basically, this means you might not need massive funding, employees, and a team of lawyers. You can start a business independently, from home, with minimal investment.

Enter the solopreneur.

What is a solopreneur?

According to Merriam-Webster,

| “A solopreneur is “one who organizes, manages, and assumes the risks of a business or enterprise without the help of a partner.”

In simpler terms, solopreneurs are people who choose to be their own boss. They’re accountable for and run 100% of their professional tasks.

Solopreneurship presents unique advantages and specific challenges. An analysis will find challenges that are not found in other business models.

• Assuming liability and risk: The freedom of being 100% in charge comes with extreme liability. Should things go south, the entrepreneur will shoulder all of their losses.
• Investing your own money: Similarly, the solopreneur will likely cover 100% of the startup costs.
• Uncertain income: Solopreneurs will typically work full-time. There is no guarantee that they will make consistent income each month. This uncertainty is paired with erratic fluctuations in business expenses.

We usually associate solopreneurs with freelancers and contractors. However, the term encompasses many occupations. Below are ten examples of both online and offline solopreneur professions.

1. Content creators: Whether we talk about visual or written content, creators are a great example of entrepreneurship that often requires minimal initial investment.
2. Data entry: Although a common side hustle, some solopreneurs have opted for a full-time data entry career. This career offers flexibility and constant demand.
3. Tutoring: One-on-one or group tutoring is an excellent example. It requires expertise in a particular subject, whether math, a second language, or everything in between.
4. Event planner: In these digital times, events are unlikely to disappear. Many event planners have built successful solo careers. Work includes organizing marketing panels, discussions, summits, or even private parties.
5. Influencer: Influencer marketing allows influencers to endorse products or services in a field they have expertise. This type of solopreneurship has been a gateway to fame for many successful online creators.
6. Software developers: Developers can shift away from their employee roles and toward a sole trader career. They see increased flexibility and location independence.
7. Retail/online reselling: Retail is a great example of a passion project. Retail solopreneurs range from clothing app resellers to full-time e-commerce entrepreneurs.
8. House-sitting/pet-minding: Looking after people’s homes and pets while away is another great solopreneur pursuit. This task is a low-effort and profitable solo venture.
9. Author: This is one of the most common solopreneur occupations. The only difference is that in modern days, authors can traditionally publish or self-publish in a variety of formats:hardcover, audiobooks,e-books, paperbacks etc., 
10. Bookkeeping/tax preparation: Many brick-and-mortar occupations have recently transitioned to digital. Now, individuals can run tax practices on their own.

Key differences between solopreneurs and entrepreneurs

Although confusing to some, solopreneurs and entrepreneurs are not the same. While all solopreneurs are entrepreneurs, the opposite is not always true. 

Entrepreneurs are the epitome of risk inclined. Not only are they in control of their financial outcomes, but those of employees too. Solopreneurship is often a lower-stakes game since you have less leverage.

Below, we have highlighted the top-5 solopreneur vs. entrepreneur differences.

1. Working independently vs. delegating: Solopreneurs are used to running the show. From sales to fulfillment, they do everything. Entrepreneurs grow their businesses by delegating tasks. This helps them focus on their business's core aspects.
2. Initial investment: Startup entrepreneurs are known to take a loan or investment. Solopreneurs use the resources available to them to start their ventures.
3. Time investment: Solopreneurs range from full-time to side hustlers. The same flexibility is not granted to entrepreneurs. Once they start, it's either sink or swim.
4. Business expansion: The entrepreneur model is scalable and prone to expansion. As more revenue grows, business can grow. Entrepreneurs can onboard new team members, open new locations, and take on new clients. Solopreneurs work alone, meaning there is a limit to their business growth.
5. Service or product offer: By the same token, entrepreneurs can choose to expand their range of services and products. Solopreneurs will most likely remain bound to their initial venture.

Characteristics of solopreneurs

The main shared attribute of all solopreneurs? They are the founders and the only employees of their enterprise. There is no one-size-fits-all approach to solopreneurship. But it is safe to say most of them will share the following traits:

• Ambition: Saying goodbye to the safety of employed life takes guts. Solopreneurs are ambitious, determined people by nature.
• Versatility: Being versatile is the best way to equip yourself for an unpredictable professional landscape. Solopreneurs know that.
• Tech-knowledge: Most solopreneur work online. This requires an aptitude for the ins and outs of technology.
• Organization: Being your boss requires incredible amounts of self-discipline. Solopreneurs cannot delegate. Therefore, staying on top of their tasks is key.
• Salesmanship: Solopreneurs know how to “sell themselves.” If you can't sell, you can't find customers.
• Optimism: Believing in yourself is necessary for a successful solo venture.
• Creativity: Many solopreneurs fled the corporate world for more fulfilling objectives. This signifies creativity and out-of-the-box thinking.
• Resourcefulness: Most solopreneurs won’t have a great budget, especially when first starting. This, in turn, pushes them to make do with the means at their disposal.

Types of solopreneurs

Solopreneurship isn't a profession. It's better to look at it as a business/life model. This is why solopreneurs come in many shapes and sizes. Most people title themselves something other than "solopreneur." 

Most solopreneurs fall under one of the following categories:

• Freelancer
• Consultant
• Professional
• Influencer
• Content Creator
• Gig Worker
• Side Hustler

Pros and cons of solopreneurship

The solopreneur route can be perfect for some and not-so-ideal for others. Some value autonomy and variety. Others will seek consistency in income and routine.

Still on the fence about starting your solopreneurial venture? Here's a breakout of the pros and cons:

Pros

1. Increased work-life balance: Working your own hours comes with autonomy. This includes having more time to be with loved ones, travel, exercise, and relax. It is not uncommon for people to prioritize their quality of life, even if it means making less money.
2. Financial independence: As your boss, you have more control over your income. A fixed salary will only grow so much year over year. Solopreneurs can look at their outcomes based on their work ethic and skill.
3. Total control: You're always in control as the ship's captain. No negotiations for votes are required to change strategy.

Cons

1. Reduced scalability: Working alone means you can only leverage your 24 hours per day. Eventually, you'll reach a bottleneck where you can only grow if you hire. Solution: Not having employees doesn’t have to mean denying all types of help. Hiring freelancers is a great way to outsource some of your workload. Many solopreneurs do this to avoid paying extra payroll taxes and wages.
2. Lack of peer review: Some people value having a partner or colleague to run ideas by. This is a great way to brainstorm solutions to common problems. Solopreneurs lack space to collaborate and often feel isolated. Solution: Join online and in-person roundtables and knowledge-sharing platforms. They exist to connect with fellow solopreneurs in similar fields.
3. Risk of burnout: The solopreneur lifestyle allows one to pursue flexibility. Sometimes the opposite can happen. Being in charge of everything means your plate fills up fast. This forces you to work long hours and feel guilty when taking a break. Solution: Hiring freelancers on a per-need basis can help. Keep a calendar of milestones and objectives for the short and long term. Commit to only working a set amount of time on each task before you give yourself a break. 

Why is solopreneurship on the rise?

The Great Resignation has seen over 50 million people quit their jobs in 2022. No, they're not retiring. Many have chosen to start their business journey. They're on a quest for self-actualization and freedom.

Technology is bound to continue playing a vital role as a vast majority of solopreneur roles are carried out online, allowing for complete location independence.

Technology plays a vital role as more and more business tasks are done online. TikTok, Instagram, and YouTube have skyrocketed in the content creator/ influencer space.

Unlock a better life with solopreneurship

Workplace trends and culture are rapidly evolving. More and more people long for a more fulfilling career, better life-work balance, and increased agency. Solopreneurship can be the answer they seek.

Start with a strategy and an exit plan. Then, you can take alleviate some risks of solopreneurship. If you’re about to start a solo operation, use technology to your advantage. One tech tool you can use is ComplYant. We are the digital tax assistant choice for thousands of entrepreneurs.