The Difference Between a Solopreneur and an Entrepreneur
These days it seems everyone and their cat has a side hustle. Whether it’s a t-shirt printing business or a freelance consulting business. Everyone seems to be in on the action of running their own game.
According to the Australian Bureau of Statistics the number of small businesses being registered jumped in 2021 by over 15%.
But many of these small business owners would self-identify as solopreneurs rather than entrepreneurs. Let’s take a look at the rise of solopreneurship and the differences between a solopreneur and an entrepreneur.
Solopreneurs defined
The term solopreneur has been kicking around since the 1990s but has gained popularity in the 2010s to describe a person who runs their business without regular employees. Basically, a solopreneur is an entrepreneur who is going it alone and that was always their plan.
Solopreneurs tend to run a small or even micro business often out of their homes, without any additional staff.
Entrepreneurs defined
An entrepreneur might start out as a solopreneur running their own show but their aspirations are larger. Generally, there is a larger goal than working alone. Entrepreneurs start companies rather than solo enterprises.
Let’s look at some of the defining differences between an entrepreneur and solopreneur below.
Solopreneurs are both founder and employee
A solopreneur comes up with the idea and works for their own business. They are generally the only employee though they may engage other contractors for different projects if the work is outside of their scope.
But the solopreneur basically runs their business alone and deals with all aspects of the business, completing the work, doing the administration, doing the accounting and running the whole show.
Entrepreneurs hire and manage a team
Whereas an entrepreneur will hire and manage a team for their company, the intention from the start is to grow the business and it generally involves a greater risk than the solopreneur’s business model.
There will often be a larger financial investment needed to kick off the company and a greater chance of both loss and profit.
Solopreneurs might never want to scale
While some solopreneurs might eventually want to scale their business, most are content with running it as a one-man show. Often times the business model a solopreneur has set out to create isn’t intended to scale. It’s a contract based solo operation that is self-sustaining.
This makes the jump to being a solopreneur more achievable and less financially risky than entrepreneurship.
Entrepreneurs are always scaling the business
‘Grow or die’ is a common catch-cry of modern-day entrepreneurs, if the business is not growing then what is the point? Generally, an entrepreneur’s business model will require more upfront investment and more profit in order to be sustainable than a solopreneur’s business model.
This will usually mean that they need to scale in order for the business to be viable. A lot of the business ideas entrepreneurs run with require a large scale to achieve profitability.
Solopreneurs have a smaller focus
A solopreneur is not trying to take down the large brands in their field, their product or service is focused within a small scope of the market. And unlike entrepreneurs because they actually do the work associated with this business, they are not looking to start multiple companies or sell off their intellectual property.
They are focused on what they do well and happy to continue doing it. This is why you often see content creators, consultants and freelancers taking this route, as they like what they do, they just want to work for themselves and not someone else.
Entrepreneurs are looking to disrupt
While it might not always be the case, most entrepreneurs are looking to disrupt a current market rather than create a small niche position for themselves. Their goals are larger in scale and often mean that they will be in direct competition with the established brands within their field.
Whether it’s a model for digital or manufacturing disruption, most entrepreneurs are looking to make waves in their market.
How do you know if you’re an entrepreneur or solopreneur?
Deciding which of these self-starter labels best fits you depends on your business model, your business plan and your ambitions for your business.
If you’re wanting to take what you do now and work for yourself, you don’t really want to deal with the hassle of hiring other staff and you’re happy with running it all alone, then you’re a solopreneur.
Solopreneurs can run all kinds of businesses. For example they could be a personal trainer, graphic designer, personal accountant, photographer, market vendor, or freelance social media marketer.
If you’re thinking big and you’ve come up with something that will require scaling to reach profitability, if you’re going to need staff and multiple locations and you want to change the way your industry works then you might be an entrepreneur.
Entrepreneurs often create new products or streamline technologies in their industry, this could be an application, a piece of software or a business system. Entrepreneurs can also create a business model and franchise it. If you’re not intending to build something new this might be the path you’re looking at.
Final Thoughts
Whether you’re looking to take down a whole industry, expand a small business into franchises, or simply work for yourself and doing what you love, there’s nothing more rewarding than running your own business.
If you’re thinking about taking the exciting step towards working for yourself the best place to start is with our Certificate III in Entrepreneurship and New Business. This is designed for anyone wanting to strike out on their own.
In the course you’ll learn how to research business opportunities and come up with a business plan, figure out your finances, understand and apply taxation and insurance requirements and build your business!
You can learn more about the course here, or get in touch with us, we’d love to help you find the right course for your business goals!