The pandemic spurred small business formation. People who only previously thought about owning their business made the leap – and continue to do so. An Intuit survey of 8,000 U.S. workers reported that 83% of the people surveyed said COVID-19 accelerated their plans. According to their 2021 New Business Insights report, Intuit predicts 17 million new small businesses will form in 2022. The U.S. Census Bureau confers, showing month-over-month new business application increases in 2022.
So, what are the differences between solopreneur, entrepreneur, and small business owner? And why does it even matter? Here we’ll go over the different titles, the differences between the two, and some things to be aware of.
Small business. We tend to think of small businesses as mom-and-pop shops, like the local coffee shop or boutique grocery store – something with a storefront. Small businesses usually already exist in the marketplace. New owners just add their creative flare. This differs from solo- and entrepreneurs who are usually founders or creators of new or innovative products or services.
Most people that set up a small business intend to hire employees to serve customers in person within a specific location. Owning a small business is part of the quintessential American dream. In fact, small businesses make up 99.9% of all US businesses and create 1.5 million jobs annually.
The big motivator for hanging your own shingle is being your own boss. But you need to do your homework. A small business, more so than solo- or entrepreneurship, requires a solid business plan and sufficient capital. Not only that, but you’ll also want to make sure that your business is in an area with a large enough talent pool to hire from.
NerdWallet reported 10 businesses with the highest growth trajectory to start in 2022. Food trucks, car wash services, personal training, and yoga all made the list.
Solopreneur. A solopreneur is a one-person show. They’re both the founder and creator, and the sole person responsible for delivery of products and services. Solopreneurs might hire outside contractors or freelancers, but at the end of the day, the buck stops with them.
For the most part, solopreneurs are not focused on building an empire (think Steve Jobs, Elon Musk, and Jeff Bezos). Instead, they’re building a business they can operate on their terms. Solopreneurs tend to have a single focus or two related focal points. Their focus is building a loyal customer base manageable for one person with some outside help on occasion.
The advantages of being a solopreneur include low start-up and overhead costs, no employee headaches, and manageable workloads. But there is a limit to what one person can do. One of the best things you can do as a solopreneur is diversify your income streams by creating courses or writing ebooks. That allows you to scale your business and still work independently.
Looking for ideas? Some solopreneur business ideas include graphic designer, photographer, event planner, web designer, content creator, and freelance writer. With each of these, you have the option to scale by adding products. You can also scale by starting a YouTube “how-to” channel.
Entrepreneur. This is the person who wants to create an empire. That empire doesn’t have to be Amazon or Apple. It can be much smaller – or bigger! But entrepreneurs intend to scale. Their focus is to hire a team of people to bring their idea to the next level.
Entrepreneurs are founders with an idea that evolves with the help of an expert team – only often the founder is credited with all the success. That’s because they are the ones that have the guts to bring it to fruition. There can be incredible financial risk involved with entrepreneurship. Often these people will seek venture capital or high-risk financing. They’ll leverage their homes. True entrepreneurs don’t believe in failure.
Here are some examples of entrepreneurship. Sara Blakerly, founder of Spanx. Oprah Winfrey, TV personality. Steve Jobs, Apple. Jeff Bezos, Amazon. You can find examples of entrepreneurs in every industry.
Many entrepreneurs start as solopreneurs but later choose to scale. If you’re a web developer, you can expand into analytics or social media. You can add a content division and graphics department. You’re limited by your imagination, your risk tolerance, and business goals.
Whatever you decide to call yourself, at the end of the day you’re a business owner. You call your own shots, make your own rules, and your success depends on you. There is nothing to say you have to fit within the predefined boundaries of these definitions. In fact, just the fact you’re your own boss means you’re willing to take risks. Step outside the box whenever you want – or retreat for safety depending on the economy. As a business owner, being flexible is paramount.