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For a very long time, I considered myself solitary.
And in the event you’re like me, your job title only matters when someone inevitably asks, “so what do you do at work?”
While what you call yourself a solopreneur or entrepreneur isn’t a big deal, it is vital to do not forget that each takes a completely different path in business.
Due to this fact, in this text, I’ll discuss a few of them the most important differences between a sole proprietor and an entrepreneur so you may ensure where your online business goes.
Solopreneur vs Entrepreneur
What’s the difference between a solo trader and a trader?
A solopreneur often works alone, takes care of all elements of his business, and typically prefers a smaller scale, while an entrepreneur builds and manages teams, takes risks, and strives for scalability and growth.
Here is a breakdown of the most important differences between sole proprietors and entrepreneurs:
1. Team size
As their name suggests, “solo” preneurs normally work alone. While they may go with other freelancers, they haven’t got anyone else on their payroll or hire full-time employees.
Which means the “team” size of solopreneurs is most frequently “1”.
But Paul Jarvis (writer Company Of One: Why staying small is the following big thing for business) explains that simply because you are a “one man business” does not imply you’ve to work alone.
“A sole proprietorship shouldn’t be anti-growth or anti-income, neither is it a sole proprietorship (even though it definitely might be). … Should you’re a one-man business, your mindset is to construct your online business around your life, not the opposite way around.”
2. Making decisions
Whenever you resolve to grow to be a solopreneur, you must expect to make all vital decisions yourself. Conversely, entrepreneurs often involve their teams in decision-making processes.
Nonetheless, as with the whole lot on this list, solopreneurs may decide to seek the advice of with subcontractors or mentors before making vital decisions inside their company.
3. Scale
Entrepreneurs are inclined to give attention to scaling their business, while solo entrepreneurs may prefer to maintain their business small and manageable.
Very often, solopreneur corporations depend on their very own talents and skills to maneuver the corporate forward.
There are at all times exceptions to this rule, but many freelancers (who start out as solopreneurs) decide to turn their freelancing into an agency model.
Generally, though, solopreneurs are content with no massive scale or crazy growth at any cost.
4. Risk tolerance
Entrepreneurs are more willing to take risks, while single people may prefer a more conservative approach.
This often implies that lone entrepreneurs are slower to spend money, tackle debt or seek outside investment.
They can also decide to grow much slower than traditional entrepreneurs.
5. Roles and Responsibilities
Whenever you run your online business as a solopreneur, you ARE your online business.
Which implies you handle all elements of your online business, from sales to client work and the whole lot in between. They can also decide to delegate tasks to others as an alternative of hiring a team.
Entrepreneurs, then again, delegate tasks and responsibilities to their team members in order that they can give attention to tasks that only company founders or CEOs can do well.
6. Revenue Channels
Entrepreneurs often give attention to introducing latest services or products, while solo entrepreneurs may give attention to improving their existing offerings.
For instance, in the event you’re a solo independent entrepreneur, you would possibly decide to hone your craft, raise your bids, or find higher clients as an alternative of making a whole latest revenue stream.
Entrepreneurs normally wish to develop one sales channel, hire them until they’re well established, then move on to the following channel.
7. Networking
Should you prefer to work alone, a solopreneurship often is the best choice for you. While not all lone entrepreneurs prefer isolation, many wish to just work on projects and grow their business without much outside influence.
Conversely, most entrepreneurs give attention to constructing networks and then using those relationships to grow their business.
8. Capital Investment
Solopreneurs typically start and grow their businesses without outside investment, whether from banks or other investors.
As an alternative, they construct their business through the use of their very own funds and reinvesting the profits into the business.
If the added stress that entrepreneurs often face with reporting to investors doesn’t appeal to you, then solo entrepreneurship is the strategy to go.
9. Business structure
Should you are a sole proprietor, you may easily operate as a sole proprietor. In most countries, which means you and your organization are the identical legal entity.
While this might be helpful in some ways, it may possibly also expose you as a sole trader to higher taxes and potential liability in the event you run into financial difficulties with your online business.
Even in the event you plan to stay a sole proprietor, consider converting your sole proprietorship into a limited liability company, which might prevent 1000’s in taxes and reduce your risk of liability in the event you run into debt or run into legal trouble.
10. Time Commitment
Should you value time greater than money, you have to be a solopreneur.
It’s because lone entrepreneurs are inclined to have more flexibility in managing their very own time, while entrepreneurs often work long hours to maneuver their ventures forward.
This shouldn’t be at all times the case, nevertheless, some lone entrepreneurs find that they’ve created a different job for themselves and work even longer hours than in a traditional day job.
A greater way is to construct in automation and passive income that can proceed to generate business and revenue, even in the event you’re not necessarily “up-to-date”.
11. Skill sets
Should you’ve at all times been considered an “all-rounder,” you are probably a great fit for a solitary company.
It’s because solo entrepreneurs, as mentioned earlier, are inclined to cover all elements of their business.
So, not only do it’s essential to be talented in your field (website design, writing, translation, etc.), you furthermore mght need to know balance the books, pay taxes, send invoices, sell your services, and rather more.
Generally, entrepreneurs hire for this sort of work.
12. Marketing approach
Entrepreneurs often give attention to constructing a brand and implementing strategic marketing campaigns. These campaigns can cost a lot of cash and require many professionals to run properly.
Meanwhile, lone entrepreneurs may rely more on word-of-mouth and other more organic ways to amass customers.
Nonetheless, one in all the most important issues we hear about when coaching freelancers on our podcast is the unpredictability of word-of-mouth marketing.
As an alternative, we recommend trying a few of the tactics mentioned within the podcast to fill your customer pipeline.
13. Exit strategy
As a sole proprietor, chances are you’ll not have any exit strategy (plan to sell the corporate or go public).
Entrepreneurs typically have an exit strategy, while lone entrepreneurs are content to run the business for so long as crucial and then either close the door, transfer the business to another person, or sell for a small amount.
So are you a solopreneur or an entrepreneur?
After reviewing all these differences, ask yourself:
Do I would like to be a solopreneur or an entrepreneur?
Do you ought to be primarily self-employed, finance your individual small business and grow organically?
Or do you ought to work primarily with a large team, counting on investors and scaling faster?
The alternative is yours.
And the excellent news is: you may mix and match any of the features I covered today.
Simply because this text says a sole proprietor does one thing and a sole proprietor does one other does not imply it may possibly’t be modified.
It is your problem. The goal is to make you joyful. And earn money.
So long as you do each, I do not know if it really matters what the title of your online business card says.
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