Success as a Solopreneur
May 12th 2022
Where solopreneurship, or operating as a one-person company, used to be perceived as a starting point to entrepreneurship, today many start-ups are opting to remain as solo ventures.
Approximately 73% of U.S. small businesses are categorized as solopreneurships, reports Podia, which equates to 41.8 million companies. Rather than being merely a stepping stone, for many entrepreneurs solopreneur is now frequently a preferred destination.
Research by the Global Entrepreneurship Monitor (GEM) 2020/2021 Global report found that “the rate of US adults expecting to remain as the only employee in their business was up by nearly 20 percent from 2020.” Further, “A strong characteristic of Covid-19 era entrepreneurship is that is appears to be accelerating the rate of single-employee companies…a trend that started a few years earlier.”
Said another way, more people are starting one-person businesses and opting to keep them as such.
Pros and Cons of Being a Solopreneur
Starting a solo venture is a big step, whether you intend to eventually expand it or not. As with everything, there are advantages and disadvantages of remaining a solopreneur:
- Ease of start-up. Getting a one-person venture up-and-running is much easier and potentially faster than having to take into account the preferences of partners or investors.
- Low cost. When you’re only responsible for yourself and the equipment and materials you need to run the business, you can typically keep expenses low. Once you begin to add staff, costs can rise exponentially.
- Speed. When you’re the lone decision-maker, you can make choices quickly and make progress faster.
- Control. Similarly, when you own 100% of the company, what you say goes. No checking with anyone else about their opinions.
- Limited capacity. Although you can keep costs low when you’re the lone employee, when you’re the CEO/janitor/delivery person/production supervisor, your capacity can be limited. There are only so many hours in a day for you to work.
- Less room to scale. A result of limited capacity is that it’s more difficult to scale a solo business without converting it into a larger venture.
- Stress. When you’re the person responsible for everything in the business, that can cause stress and anxiety. Being in charge isn’t always good news.
For an increasing number of Americans, running a solopreneurship makes a lot of sense. Often called “lifestyle” businesses because the companies are built around the owner’s skills, abilities, and interests, one-person businesses can still be both lucrative and successful.
Here’s how to make solopreneurship work for you:
Focus on Growth, but Not Expansion
While outsiders may see your one-worker venture as limiting, don’t let that discourage you. There is plenty of growth possible through non-traditional strategies.
- Rely on contractors and freelancers. You will eventually need support if you plan to grow your business, but that doesn’t necessarily mean you have to hire permanent employees. Retain your flexibility by relying on workers as-needed—a.k.a. freelancers—as well as consultants and coaches. That way, you can ramp up the business without incurring hefty fixed costs.
- Allow remote work. The majority of solopreneurs work from a home office, which is great for keeping the cost of rented space to a minimum. If you decide to pay for expertise, such as a bookkeeper, scheduler, or web designer, permit them to operate from their homes, thereby eliminating the need for commercial space.
- Partner with sales reps. If you produce a product, consider working with manufacturer’s representatives rather than hiring your own sales crew. They earn a commission with each sale, which reduces your company’s costs; in many cases, you don’t produce until you get an order.
- Invest in marketing. Although many solopreneurs opt to keep the business small and manageable, often relying mainly on word of mouth, that doesn’t mean you should keep your business a secret. Getting the word out, even if you’re working part-time, can increase demand and allow you to raise your rates, even if you limit supply.
As Elaine Pofeldt states in her book, The Million-Dollar One-Person Business, “the vast majority of self-employed people have barely begun to unlock their potential in making the most of their businesses.”