What is a Solopreneur?

A solopreneur is the founder and sole employee of the business. They are in charge of every aspect of their brand and business, which results in handling majority of the business tasks on their own. Solopreneurs are more tied to present day-to-day tasks while entrepreneurs also have to think about future

What is an Entrepreneur?

Usually, entrepreneur starts off as being the founder of the business, but at some point, must delegate work to other people to keep the focus on steering the business in right direction. In order to handle different aspects of the business, it is essential to hire the right people and manage them properly.

What is the main difference between both?

An entrepreneur will have a team that they manage while solopreneur is comfortable running all their business tasks and projects themselves, they are founders and sole employees of the business. Solopreneurs can outsource extra people (freelancers or contractors) now and then, but they will not have employees that are paid through employer’s payroll and have their payroll taxes withheld throughout the year. Entrepreneurs experience more stress and anxiety as more people rely on them while solopreneurs have more freedom in comparison between the two. Here is a golden-nugget - 6 hidden costs when using freelancers.

1. Solopreneur is a one-man army

Thinking about everything does not sound easy and you are right – it is not. Figuring out the service/product that you can sell, doing the actual marketing and sales by yourself as well as running the numbers in your notebook is tiring, but it comes with great upside – independence and freedom. If you get anxiety when you are under pressure, or your mind goes blank when you have to do 2-3 things simultaneously then solopreneurship might not be for you! Solopreneur is a manager, founder, sales team, and accountant in one. One man army.

While entrepreneurs would hire multiple people to take care of previously mentioned tasks and focus on other things, that increases the accountability on entrepreneur’s part because now you are leading multiple people. You are managing them. This requires not only healthy nervous system, but also great soft skills. You might be great graphic designer or close to being the best cars mechanic, but what happens when you have to manage people who might not have your expected level of expertise in certain field? How do you react? Can you handle it? More importantly, can you manage them efficiently enough to run your business successfully?

2. Solopreneurs provide specific service for clients

If you are entrepreneur, it does not require for you to have several years of experience in specific field to start business. All you need is some capital, right opportunity, and positive mindset. If you are a solopreneur, however, selling a service or product that you know nothing about can get very tricky and be close to impossible to do. That is one of the biggest differences – solopreneurs must have several years of experience in the field while entrepreneurs do not.

3. Scaling

At some point having high hourly rate for your provided businesses might not be enough. If you are best of the best, you can ask 50$ per hour, 100$ per hour or even 1000$ per hour, but there are only 24 hours every day so there is a limit to your earnings. For solopreneurs, there is a scaling limitation that sometimes we forget - entrepreneurs can scale by increasing workers that produce the service/product while solopreneurs can scale only by hourly rate.

4. Balance of stress

One would say that being a solopreneur gives you more freedom and independence, as well as high enough earnings to fit your daily needs to somewhat decent standards while entrepreneur potential upside is much higher in earnings department but comes with a cost – a lot more stress and anxiety as you have to lead more people. Leading and managing more people equals a lot more headache. You do not have to go through painful debates and decision making is a lot easier when you are a solopreneur – you decide and move forward while entrepreneurs might have to deal with group of people who have invested money into the company.

5. Taxes and Accounting

Calculating taxes for solopreneurs is a lot easier and can be managed by yourself if needed while doing accounting with no prior experience for multiple workers can result into an easy migraine. Some countries offer very flexible taxation if you are solopreneur – you might not even need to create a limited liability company that can add up more unneeded complexity, and even benefit of having easier tax reports and lower tax itself.

Overall, in most scenarios’ solopreneurs can benefit using the same tax advantages as entrepreneurs and save on accounting if they are comfortable with the numbers themselves as well as pay less (this depends from country to country though).

6. Start-up costs (Solopreneur vs Entrepreneur)

Knowing that solopreneurs usually have high expertise in the service that they provide, starting costs seem to be a lot lower for them, while entrepreneurs might need to spend more money up-front in most cases. It is interesting to note that entrepreneurs have few more options to get money for their crazy ideas. By the way, if you're looking for some inspirational ideas, take a look at this article.

7. Decision making and pivoting

Decision making is a lot easier and quicker when you are solopreneur simply because you are the only person in the company, so you do not have to run your ideas and plans by investors and convince them that this is the right path.

Entrepreneurs usually will have to make bigger effort when they decide that pivoting is necessary, especially if the company they run is a big one. The bigger the company, the harder it is to do. You will have to do a ton of consulting with your accountants, CFO and managers before you make final decision, and do not forget that investor opinions matter as well.

8. Profits (Entrepreneur vs. Solopreneur)

You can always find failed businesses that are run by entrepreneurs and successful ones that are being run by solopreneurs, but in general, entrepreneur will be able to make higher profit margins as they can employ more people and scale business with no limitations whereas solopreneurs can scale only hourly rate.

Entrepreneur might also be interested in making profit quicker by selling the business and starting a new endeavour whereas solopreneur cannot sell the business because it depends on the one person (solopreneur) to run in efficiently.

By the way, 78% of small businesses were profitable in 2022 (including both entrepreneurs AND solopreneurs) even after Pandemic.

9. Networking

Solopreneurs usually network using co-working spaces or by initiating conversation with other business owners that provide the same services. Entrepreneurs, on the other hand will usually use local community or business networking international (BNI) meetings to connect with others.

While having a chat with similar minded people benefits you greatly, you will quickly come to conclusion that majority of your problems are specific and will have to be resolved by your own decisions and actions. Entrepreneurship and solopreneurship is lonely and not for everyone.

BONUS:

Top 3 entrepreneurs in 2022:

1. Jeff Bezos is an American entrepreneur, media proprietor, investor, computer engineer, and commercial astronaut. He is the founder, executive chairman, and former president and CEO of Amazon. With a net worth of around US$139 billion as of October 2022, Bezos is the third-wealthiest person in the world and was the wealthiest from 2017 to 2021 according to both Bloomberg's Billionaires Index and Forbes.

2. Bill Gates is an American business magnate, software developer, investor, author, and philanthropist. He is a co-founder of Microsoft, along with his late childhood friend Paul Allen.

3. Mark Zuckerberg is an American business magnate, internet entrepreneur, and philanthropist. He is known for co-founding the social media website Facebook and its parent company Meta Platforms (formerly Facebook, Inc.), of which he is the chairman, chief executive officer, and controlling shareholder.

Top 3 solopreneurs in 2022:

1. Jackie Aina has a self-titled beauty YouTube channel. She is reported to be worth $1 million. Her posts are mostly on beauty, including product reviews, tutorials, and first impressions. She is of Nigerian origin and hails from Los Angeles.

2. Alex Trochut is a Spanish artist, graphic designer, illustrator, and typographer. Born in Barcelona and currently based in Brooklyn, NY. He has created album covers for Katy Perry’s single “Roar” (2013) as well as The Rolling Stones’ Rolled Gold: The Very Best of the Rolling Stones (2007), among others.
Alex Trochut has a net worth of $5.00 million (Estimated) which he earned from his occupation as Designer. Popularly known as the Designer of Spain. He is seen as one of the most successful Designer of all times. Alex Trochut Net Worth & Basic source of earning is being a successful Spanish Designer.

3. Farnoosh Torabi is an American author, journalist, personal finance expert, speaker, and television personality. As of 2022, She has earned an estimated net worth of $2 Million. She is best known for her finance book “You’re So Money – Live Rich Even When You’re Not”.