- Solopreneur vs. Entrepreneur
- 1. Team Size
- 2. Decision-making
- 3. Scale
- 4. Risk Tolerance
- 5. Roles and Responsibilities
- 6. Revenue Channels
- 7. Networking
- 8. Capital Investment
- 9. Business Structure
- 10. Time Commitment
- 11. Skill Sets
- 12. Marketing Approach
- 13. Exit Strategy
- So are you a solopreneur or an entrepreneur?
For a long time, I considered myself to be a solopreneur.
And if you’re like me, the only time your job title actually matters is when someone inevitably asks: “so, what do you do for work?”
While what you call yourself as a solopreneur or an entrepreneur isn’t really a big deal, it’s important to note that each takes a very different path in business.
So in this article, I’ll cover some of the biggest differences between a solopreneur and an entrepreneur so you can be confident in where your business is headed.
Solopreneur vs. Entrepreneur
What’s the difference between a solopreneur and an entrepreneur?
A solopreneur often works alone, handles all aspects of their business, and typically prefers a smaller scale, while an entrepreneur builds and manages teams, takes risks, and aims for scalability and growth.
Here’s a breakdown of the biggest differences between solopreneurs and entrepreneurs:
1. Team Size
As evidenced by their name, “solo”—preneurs typically work alone. While they may partner with other freelancers, they don’t have anyone else on payroll or hire any full-time employees.
This means a solopreneurs “team” size is most often “1.”
But Paul Jarvis (author of Company Of One: Why Staying Small Is the Next Big Thing for Business) explains just because you’re a “company of one” doesn’t mean you have to work alone.
“A Company of One is not anti-growth, or anti-revenue, and it’s not just a one-person business either (although it certainly can be). … If you are a company of one, your mind-set is to build your business around your life, not the other way around.”
When you choose to be a solopreneur, you should expect to make all major decisions yourself. Conversely, entrepreneurs often involve their teams in decision-making processes.
As with everything on this list, however, solopreneurs may choose to consult with subcontractors or mentors before making big decisions in their company.
Entrepreneurs tend to focus on scaling their business, while solopreneurs may prefer to keep their operations small and manageable.
Quite often, solopreneurs’ businesses rely on their own talents and skills to move the business forward.
There are always exceptions to this rule, however as many freelancers (who start as solopreneurs) decide to scale their freelancing into an agency model instead.
Generally, however, solopreneurs tend to be satisfied without massive scale or insane growth at all costs.
4. Risk Tolerance
Entrepreneurs tend to be more willing to take risks, while solopreneurs may prefer a more conservative approach.
This often means solopreneurs are slower to spend money, take on debt, or seek outside investments.
They may also choose to grow much more slowly than traditional entrepreneurs.
5. Roles and Responsibilities
When you run your business as a solopreneur, you ARE your business.
Which means you handle all aspects of your business from sales to client work and everything in between. They might also choose to outsource tasks to others instead of hiring a team.
On the other hand, entrepreneurs delegate tasks and responsibilities to their team members so they can focus on tasks only company founders or CEOs can do well.
6. Revenue Channels
Entrepreneurs often focus on introducing new products or services, while solopreneurs may concentrate on refining their existing offerings.
For example, if you’re a freelancing solopreneur, you may choose to get better at your craft, increase your rates, or find higher quality clients instead of creating a whole new revenue stream.
Entrepreneurs tend to enjoy spinning up one sales channel, hiring until it’s well-established, and then moving on to the next channel.
If you prefer to work alone then solopreneurship may be the best option for you. While not all solopreneurs prefer isolation, many enjoy simply working on projects and growing their business without much outside influence.
Conversely, most entrepreneurs focus on building their network and then leveraging those relationships to grow their business.
8. Capital Investment
Solopreneurs typically start and grow their businesses without external investments—either from banks or other investors.
Instead, they bootstrap their business by using their own funds and reinvesting profit into the business.
If the added stress entrepreneurs often face from reporting back to investors doesn’t appeal to you, then solopreneurship is a good path.
9. Business Structure
If you’re a solopreneur, you can easily operate as a Sole Proprietor. In most countries, this means that you and your business are the same legal entity.
While this can be helpful in some ways, it can also expose you as a solopreneur to higher taxes and potential liability if you face financial trouble in your business.
Even if you plan to stay a solopreneur, consider converting your sole proprietorship into an LLC which can save you thousands in taxes and reduce your liability risk if you incur debt or fall into legal trouble.
10. Time Commitment
If you value time over money, then you should be a solopreneur.
That’s because solopreneurs usually have more flexibility in managing their own time, while entrepreneurs often work long hours to drive their ventures forward.
This isn’t always the case, however, some solopreneurs find they’ve created another job for themselves and end up working even longer hours than they might at a traditional day job.
11. Skill Sets
If you’ve always been considered a “jack-of-all-trades” then you’re probably a great fit for solopreneurship.
That’s because solopreneurs—as mentioned before—typically handle all aspects of their business.
So, not only do you have to be talented in your field (web design, writing, translation, etc), you also have to understand how to balance books, pay taxes, send invoices, market your services and lots more.
Generally, entrepreneurs hire for these kinds of tasks.
12. Marketing Approach
Entrepreneurs often focus on building a brand and implementing strategic marketing campaigns. These campaigns can cost a lot of money and require many professionals to execute properly.
Meanwhile, solopreneurs may rely more on word-of-mouth referrals and other more organic ways of getting clients or customers.
However, one of the biggest issues we hear about when coaching freelancers on our podcast is how unpredictable word of mouth marketing can be.
Instead, we recommend you try some of the tactics mentioned in the podcast to fill your client pipeline.
13. Exit Strategy
As a solopreneur, you may not have any kind of exit strategy (a plan to sell the business or go public).
Entrepreneurs typically have an exit strategy in place while solopreneurs are content to run their business as long as needed and then either close doors, pass the business on to someone else, or sell for a modest amount.
So are you a solopreneur or an entrepreneur?
After reviewing all of these differences, ask yourself:
Do I want to be a solopreneur or an entrepreneur?
Do you want to work primarily on your own, funding your own small business and growing organically?
Or do you want to work primarily with a large team, relying on investors, and scaling more quickly?
The choice is yours.
And the good news is this: you can mix and match any of the traits I’ve covered today.
Just because this article says a solopreneur does one thing and an entrepreneur does another doesn’t mean you can’t change things up.
This is your business. The goal is to make you happy. And make you money.
As long as you’re doing both of those things, I don’t know if it really matters what your business card title says.
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