It’s no secret that the world of business has its fair share of buzzwords. Whether you’re a ‘unicorn’ in the venture capital space or a start-up specialising in ‘Software as a Service’ (SaaS), there’s a coined term for just about everything.
An emerging expression you may not yet be familiar with, however, is that of the solopreneur.
Fuelled by the global adoption of hybrid working and ‘hustle’ mentality, this growing category of one-person business owners is changing what it means to be a start-up.
In this introductory article, we’ll explore what a solopreneur is and how they differ from entrepreneurs and freelancers.
What is a solopreneur?
Simply put, a solopreneur is a person who sets up a business, of which they are the sole employee.
A solopreneur is both the owner and the workforce of their business. They are responsible for organising, managing and assuming the risks of their enterprise, without the help of a partner.
At this point, you might be asking yourself how this differs from an entrepreneur, or any other start-up for that matter. Surely all entrepreneurs are individuals, starting with a team of one, and wouldn’t this make them all solo entrepreneurs? Not quite.
Let’s dig into the detail around what makes solopreneurs different.
Solopreneur vs Entrepreneur
While there are undeniable similarities between the two terms, in practice they are very different.
Like a lot of business terms, exact definitions are hard to pinpoint – and you may find that explanations vary, depending on where you look. That being said, the following definitions are the most widely accepted:
|Do everything in their business||Manage and delegate tasks|
|Have a single business focus||Look for new ways to grow their business offering|
|Don’t need to spend much time on logistics||Spend a lot of time on decision-making|
|Deal with less financial risk||Need to think about payroll, benefits and taxes|
As you can see, not only are there distinct differences in the day-to-day operations of each, but also in the overall vision, direction and scope of their ventures.
Now that we have a top-level summary, it’s worth comparing the key differences in a little more detail to truly unpack what makes solopreneurs unique.
Solopreneurs do everything in their business. Entrepreneurs manage and delegate.
Solopreneurs are both founders and employees. That’s not to say that they can’t – or won’t – work and collaborate with others, but they won’t hire anyone full-time.
A solopreneur might work alongside a freelancer or contractor, for example, to perform certain tasks or meet deadlines in a busy month. But this would not form part of the daily operations of the business. The business also wouldn’t depend on these parties to deliver its core services.
Entrepreneurs, on the other hand, might have founded their company on their own but will typically be seeking to grow, manage and delegate responsibilities to other people over time.
One route isn’t better than the other; they are simply two different approaches to business. For example, a solopreneur will have an easier time keeping their work organised without teammates but will also have to set up and manage cyber security strategies for themselves. By contrast, an entrepreneur might have a team to run cyber security but will have to pay more attention to streamlining file management and collaboration.
Entrepreneurs focus on growing their business. Solopreneurs have a single focus.
A major difference between solopreneurs and traditional entrepreneurs comes down to the core ambition that underpins the business.
An entrepreneur is typically looking to grow their business for the purpose of selling it in the future. Expansion is considered a sign of success for an entrepreneur-run business.
With solopreneurs, growth isn’t the focus. Instead, the business is a self-serving passion project that pays their bills and fulfils them, without the need or plan for an exit strategy.
For example, an entrepreneur may start a restaurant business with a small investment and a single location. Over time, they have mapped out a growth strategy that allows the business to expand to additional locations once certain milestones have been met. The entrepreneur hopes to someday sell the restaurant franchise to investors so they can move on to the other ideas they’re already cooking up.
Meanwhile, a budding solopreneur has made the decision to establish their freelance photography business. It started as a hobby but has become profitable enough to provide a steady stream of income, along with the benefits and flexibility of self-employment. The solopreneur is not focused on building it into a photography empire – they just want to work on their terms and ensure their business model is sustainable.
Entrepreneurs spend a lot of time on decision-making. Solopreneurs don’t need to.
Entrepreneurs – by nature of their focus on growth – need to make frequent, often business-critical, decisions. Their ventures have more moving parts, each of which has implications that factor into any decision.
If an entrepreneur had set up a marketing agency and was looking to expand, for example, they might need to consider how to expand. That might involve looking at additional office space or adopting a hybrid working model. If any team members are working remotely, they may also be looking at ways to ensure their team can maximise their productivity, no matter where they’re based.
For solopreneurs, decision-making is a comparatively straight-forward, personal choice. For example, a solopreneur brand consultant works from home and occasionally at a collaborative workspace. They don’t need to think about the employee culture, space requirements or other factors because they are the only employee.
Solopreneurs deal with less financial risk. Entrepreneurs need to think about payroll, benefits and taxes.
It’s not just decision-making that will be easier for solopreneurs, but finances too.
For entrepreneurs, there are a myriad of financial factors to stay on top of – payroll, benefits and taxes are just a few examples. Not to mention having appropriate file storage in place to ensure that everyone can access financial documents when they need to.
While financial planning, management of taxes and other finance tasks are still very much present for solopreneurs. These factors are far simpler when they only relate to one person.
Is a freelancer a solopreneur?
It depends who you ask.
As an emerging concept, solopreneurs undoubtedly share parallels with freelancers, but opinions differ from person to person.
To some, a freelancer is only a freelancer until their business grows to a certain size. They then become a solopreneur because they are seen as running a business, whereas freelancers are seen more as contractors with a small client base.
However, when we refer back to our earlier definition, we know that a solopreneur is an individual that sets up and runs their business, without help. If this is what a freelancer is doing, then they can – and should – be considered a solopreneur.
It might be easiest to think of it like this – while some freelancers are solopreneurs, solopreneurs aren’t necessarily freelancers. Is a freelance graphic designer that works full-time for a base of 10 steady clients a solopreneur? More than likely, yes. Would you consider a one-person dog grooming business a freelancer? Probably not.
Ultimately, these nuances and definitions shouldn’t define you or your business. They should merely guide you on the path to understanding the goals, and therefore practices, of your venture.
Solopreneur ideas to inspire you
If the possibilities of a solopreneurship have got your mind racing, but you find yourself in need of inspiration on where to start, then look no further – we’ve got you covered.
Here are four common solopreneur business models you could start yourself.
Start an e-commerce business
E-commerce businesses are centred around selling consumer goods via the internet.
They are perfect for solopreneurs, as there’s no need for a physical location – like a brick-and-mortar shop. As a result, there’s a reduced need for additional employees like retail staff. You can also automate a lot of e-commerce activity and processes so you don’t need to manually process every order that comes through.
One practice that particularly encapsulates the solopreneur mentality in the e-commerce space is ‘dropshipping’. If you’ve not heard of it before, dropshipping is a new model of online selling. The seller doesn’t keep any goods in stock but instead orders them from the manufacturer when orders come through.
With dropshipping, you can effectively run an e-commerce business with very few overheads. That allows you to focus less on the operational side of your business, and more on curating your product catalogue and generating awareness.
As outlined earlier in this guide, the lines between freelancers and solopreneurs are blurred to say the least.
Typically, the term freelancing relates to roles that centre around supporting businesses with design, development or production in some sense. You could freelance as a writer, graphic designer, music composer or one of the many other roles required intermittently by businesses.
To find a freelancing position that fits for you, think about your passions and skill sets. Are you a confident writer? A copywriting position might work well for you. Have you got years of experience working in a particular programming language? You could consider freelancing as a developer.
If you have a skill that businesses are in need of, and willing to pay for, then it’s a good sign of a solopreneur opportunity.
When freelancing, it’s important to remember that you’re integrating into a team and will need to demonstrate that you can share and collaborate effectively with your new-found colleagues. If you’re contracting as a video editor, for example, you’ll need to make sure you can get feedback on video edits without disrupting the workflow.
Consider consulting and coaching
You don’t just have to think about delivering work for businesses either.
If you’re a specialist in your field – and have the right combination of experience and confidence – consulting or coaching is also a good option.
This is less about producing an asset that has been briefed to you, and more about bringing a wealth of knowledge and experience on a subject area to help businesses make informed decisions.
You may, for example, have extensive experience in brand identity and design strategy. You could use this experience to establish yourself as a solopreneur brand consultant, helping businesses to understand why they are struggling to resonate with their audience and how they can change.
One final area to consider is that of passive income.
Simply put, passive income is the concept of generating a regular income, whilst only requiring minimal labour, if any at all.
Traditional examples of passive income might include wealth generated from investments, royalties earned on creative works or income from a rental property.
But in the ever-changing world of ‘side hustles’, and with the rise of automation, there are more opportunities to create passive income than ever. You could develop an app, start selling stock photos or create an on-demand printing shop – the possibilities are vast.
Work solo, but never alone
You may look after everything in your solo business, but every day you need somewhere to bring you, your work and your customers or clients together.
Dropbox is designed to make your working day as collaborative as possible. Whether you’re working alone on a project or want to invite clients into a space to give feedback on the work you’ve delivered, Dropbox has a feature to help.
Simple, secure file sharing and cloud storage is just the tip of the iceberg.Just wait until you start collaborating in real-time across huge distances, or get live feedback and annotations on your latest video project.You can even set up an automatic backup of your computer – just in case the worst happens, and you need to restore your files later.