The Many Tasks of the Solopreneur & Getting Organized
The tendency is to call anyone starting a business an entrepreneur, and technically that is true. However, there are substantial differences in starting and operating a business if one is a solopreneur. The solopreneur does much the same as the entrepreneur, but to put it into a simple statement, the solopreneur does it without partners or employees. The “solo” in solopreneur means a lot.
One major difference between the entrepreneur and the solopreneur is that the entrepreneur is often building a business to scale. They want to scale up their business, promoting consistent growth, and with a plan at some point to sell it. The solopreneur differs in that they normally want to structure a business that they can totally control, operate, and manage themselves. They do not want to grow it beyond that point, as they do not want others involved.
There are three basic areas of involvement to make a solopreneur business a success, and each is equally important over the long term.
Marketing and Promotion
From startup promotions to ongoing marketing and advertising, the business cannot be successful without customers or clients. Some businesses require in-person efforts, such as consultants or professionals who pitch to potential clients. In today’s high-tech world, most solopreneurs can market their business online with a website, through social media, or through email or text marketing. Some do better with phone calls.
The solopreneur’s business plan should have a well-defined system to generate new business, including how much time and effort is required and the estimated costs. Because the income of the business is dependent solely on the efforts of the owner, care should be taken to not spend too much time in sales or marketing to the detriment of working with customers.
Operations for Profit
Many solopreneurs operate out of home offices, so their overhead is quite low. Even if they lease a small space, their overhead will always be lower than any business with employees. This does not relieve the owner of the need to determine what they want for compensation from their business, what it costs them to produce their product or service, and how much they can sell it for in their marketplace.
The business plan should set out the time and materials necessary to produce products or services that generate income for the business. Check out the competition to see what comparable products or services sell for to try and be competitive. This does not mean that there cannot be differences in quality, delivery, or support that justify higher pricing. The solopreneur must strive for a balance between their desired income and the time they have or desire to devote to the business.
Back Office Management
While the first two items above are critical for income generation and business success, this one is quite important to help you to keep more of what you earn. It is a sad truth that many solopreneurs struggle to find a way to increase their income by a few percentage points while they are simultaneously giving away double digits in taxes unnecessarily. They may also be paying more in taxes while not planning adequately for retirement.
Your business plan should include a budget for tax advisory, bookkeeping, and tax preparation services. In doing so you will free up more time to earn more and avoid paying out money in taxes you could be keeping.