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What is a Solopreneur? Key Differences From Entrepreneurs
Want to start a business on your own? Be fully in charge, working independently and taking on clients or orders at your own pace? Sounds like you may want to pursue becoming a solopreneur.
What is a solopreneur?
The word solopreneur is a combination of two terms solo and entrepreneur. Basically, a solopreneur is an individual who starts and runs a business on their own with no partners or employees. They don’t retain traditional employees or partners and instead focus on work they can do alone or with contractors. Successful solopreneurs invest in niches they are highly skilled in and passionate about.
What is an entrepreneur?
An entrepreneur is a businessperson who organizes and operates a business venture bearing most of the financial risk. Entrepreneurs work to create a business that can realize their idea, bringing in the right team, capital, and research to achieve long-term business growth. Entrepreneurs don’t necessarily have to be skilled in the area of their investment. They rely on their employees and partners to fill in gaps with the necessary expertise.
Solopreneur vs entrepreneur — what’s the difference?
How does becoming a solopreneur differ from being an entrepreneur? On the surface, they look incredibly similar. However, every solopreneur is an entrepreneur, but not every entrepreneur is a solopreneur.
This contrast becomes more visible when you understand what it takes to run each of them. Let’s delve deeper into these two types of business owners to help you decide which model might work best for you.
1. Solopreneurs manage everything
Independent work is the focus of a solopreneur, meaning that they are in charge of everything. They wear every hat applicable to both the boss and employee when building their business. However, this doesn’t mean that solopreneurs need to know how to do everything.
If a solopreneur has a task they can’t do, they outsource it to someone with the desired expertise. They don’t bring in employees. For example, if a solopreneur doesn’t know how to manage an email marketing funnel, they may explore automated tools or hire an agency or contractor to manage it.
Entrepreneurs, on the other hand, focus on building these processes into their business. Even if they do everything that solopreneurs do in the initial startup stages, they intend to grow the business to a larger team. Therefore, they hire team members to take on these tasks so that they can focus on more strategic areas of the business.
Artists, such as musicians, start as solopreneurs. As their careers grow, they eventually hire full-time managers, security teams, publicists, etc. At this point, they transition into entrepreneurs. Their role evolves from a solo act into that of a brand specialist, founder, owner, or boss with several departments/employees working for them.
2. Solopreneurs have less financial risk
Risk-taking comes with running a business. Successful businesspeople owe their success to taking financial risks that yield positive results. Entrepreneurs, to achieve their goals, have to keep on investing and look for external funding, whether by bringing in partners, reinvesting the net profits, or even taking out a loan.
In contrast, a solopreneur’s plan for making money doesn’t require much risk. They don’t necessarily intend on scaling their business and are comfortable working within a financial risk that sustains their business. Their goal is to maintain a level that allows them to run the business by themselves. They know the exact amount to invest and the expected profits, and that’s it.
3. Solopreneurs have a specialty
Entrepreneurs strive to form a team, freeing up their time to focus on growing the business rather than running it. They’re interested in exploring other niches, related or unrelated to their specialty. If an opportunity arises, they expand their business and hire someone skilled in that field.
Solopreneurs tend to zero in on a single niche and commit to meeting the needs of a manageable clientele. They choose to become good at a particular area only.
For instance, a solopreneur who offers to teach a foreign language can only teach the language they know. They can take a good number of students in one-on-one or group sessions, but they can’t teach other languages. In contrast, an entrepreneur could successfully teach multiple languages by hiring specialists as part of their team.
4. Difference in growth goals
Solopreneurs and entrepreneurs take similar steps when starting their small businesses. What often differs is their reason for pursuing a business idea and their expectations for growth.
Solopreneurs start a business to make a sustainable living out of a passion or to generate additional or ideally passive income through a side hustle. Their pursuit of growth is focused on becoming even more of an expert.
Entrepreneurs’ goal is to build a venture that’s as profitable as possible. The moment they gain some traction, they focus on building or revising their strategy to expand. Some do so intending to catch the eye of large companies who can buy or partner with their businesses.
5. Entrepreneurs focus on customer acquisition
Customers are the life-giving force of any business. Both entrepreneurs and solopreneurs have to acquire and maintain their customers. However, at some point, their priorities around customers take different routes.
Solopreneurs concentrate primarily on meeting the needs of their existing customers to generate referrals and repeat visits. They plan to perfect their art/product and expand what they can charge based on their expertise.
Entrepreneurs focus on growing their business as much as they can. They’re in constant pursuit of retaining loyal customers and bringing in new customers and increasing profits. This requires them to develop a long-term customer acquisition strategy that maintains its current customer base while regularly bringing in a new clientele.
6. Solopreneurs easily partner with other solopreneurs
Solopreneurs typically focus on providing one type of product or service at a high level of quality. Their scope is limited, but it doesn’t mean they can’t connect customers with someone who offers what they’re looking for.
Solopreneurs don’t tend to go into business with a partner. Instead, they often refer service to other solopreneurs, creating an unspoken partnership built on trust and complimentary services.
Entrepreneurs may generate off-hand referrals, but it often requires official contracts. They’re more likely to meet like-minded entrepreneurs and come up with business deals for sponsorships, promotions, etc.
The difference in growth goals influences this opposing approach to partnerships. Entrepreneurs must be more strategic to maintain their brand presence and find mutually beneficial relationships. Solopreneurs can be more flexible and focus on being part of a community of business owners, one that sends clients back and forth.
Solopreneurs still need a business plan
Interested in going solo as a business owner? You’re going to need a business plan. While you may not be pursuing aggressive growth, having a plan will ensure that you’re prepared for everything involved in running a solopreneur business.
Create your plan with our Lean Plan Template. It’s easy to use and can be completed in as little as thirty minutes. By the end, you’ll be ready to run a business on your own and have a plan in place should you decide to expand your business.
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I’m Andrew Brooks, a seasoned finance consultant from the USA and the mind behind phonenumber247.com.
My career is built on a foundation of helping individuals and businesses thrive financially in an ever-changing economic landscape. At phonenumber247.com, my aim is to demystify the complex world of finance, providing clear, actionable advice that can help you navigate your financial journey with confidence. Whether it’s personal finance management, investment strategies, or understanding the nuances of market dynamics, I’m here to share insights and tools that can propel you towards your financial goals.
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