Oftentimes, the terms solopreneur and entrepreneur are used interchangeably. But are they synonymous?
Both entrepreneurs and solopreneurs love to work independently and to develop their concepts into profitable businesses. However, they differ in how they go about achieving their goals and also the end-goal for the business. Here are 5 main differences between solopreneurs and entrepreneurs.
Manager vs Worker
Entrepreneurs oversee the running of their businesses while solopreneurs run the business. Entrepreneurs work on the business. They are more focused on strategy, brand building, research, product development, and developing the mission and vision of the business. On the other hand, solopreneurs work on the business. They do an aspect of strategy and business development, but they are more involved in the day-to-day running of the business.
Funding
While most solopreneurs bootstrap their businesses and raise the funds needed in the business by themselves, most entrepreneurs are keen to seek funding in form of grants, equity, or business loans.
End Goal
Entrepreneurs aim to start a business that can eventually run and make money without their direct involvement. Some entrepreneurs work on their business with the main aim of selling eventually or expanding as much as possible.
Conversely, solopreneurs aim to set up a business that they can run by themselves. Their focus is on making the business profitable and sustainable. They keep the business manageable and are not keen to expand or sell.
Hiring a Team
Solopreneurs primarily work in their business alone. They serve as the employees and oversee the day-to-day running of the business. However, they may occasionally sub-contract different aspects of the business, especially in the areas where they have no expertise.
While most entrepreneurs start out as solopreneurs, as the business continues to grow and the need for specialized skills arises, they hire a team. Hiring employees not only enables them to focus on the strategic aspect of the business, but it speeds up the business growth.
Employees focus on the day-to-day running of the business ensuring smooth operation. They also get more done than one would do alone. Moreover, they contribute their ideas, skills, and experience to the success of the business.
For entrepreneurs who are keen on expansion, a team comes in handy in expanding the scope of the business both in regards to offering and physical locations. For instance, if the entrepreneur runs a social marketing agency, they can easily grow into a digital marketing agency by hiring the required talent.
Financial Management
Financial management is crucial for any business whether you are an entrepreneur or solopreneur. However, it is more elaborate for entrepreneurs.
Most entrepreneurs register their business as corporations or limited companies, which have a higher level of financial obligations according to the law. They also have to pay employee salaries, taxes, and benefits. All these have to be accounted for in a proper financial structure.
On the other hand, most solopreneurs register their businesses as either single-member LLC or sole proprietorship. These have a lower financial obligation and financial management is much simpler.
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