Solopreneurs vs. entrepreneurs? What are the key differences between the two, and why does it matter so much? The real difference lies within the mind of the person who wants to start a business. In business, there are two types of people. Solopreneurs get their mojo from self-expression. They love to do the work. Entrepreneurs are those who love to manage those who do the work. They get their mojo from management. From this crucial difference in mindset, a host of other external behaviors emanate that distinguish solopreneurs from entrepreneurs. Read on to see how many subtle differences there are …
- How solopreneurs and entrepreneurs see themselves as business bosses
- Solopreneurs are driven by passion, and entrepreneurs by vision
- How solopreneurs and entrepreneurs define their business models
- Solopreneurs vs entrepreneurs on spending effort vs spending money
- Financial management differences between solopreneurs and entrepreneurs
- Endure on vs exit out – what solopreneurs and entrepreneurs prefer
- The dissimilar workplace requirements of solopreneurs and entrepreneurs
- The No. #1 challenge at work that solopreneurs and entrepreneurs have
- The credit and the blame – how solopreneurs and entrepreneurs handle these
- Why solopreneurs are usually doers, and entrepreneurs are usually delegators
- Production vs promotion – the primary roles of solopreneurs vs entrepreneurs
- Maintaining business control – strategies of solopreneurs and entrepreneurs
- The tall fir tree vs the wide banyan tree – how solopreneurs and entrepreneurs scale
- Niche expansion vs opportunity expansion – how solopreneurs and entrepreneurs develop
- Passive income vs increasing dependency – how solopreneurs and entrepreneurs earn
- Meaningfulness vs financial success – what solopreneurs and entrepreneurs find rewarding
- Profit vs creativity – what gives solopreneurs and entrepreneurs their motivation
- Business as an end vs a means to an end – how solopreneurs and entrepreneurs see balance
VIDEO: Tanner Chidester talks about solopreneurs vs entrepreneurs (Must watch: 5:46 minutes)
In this clear and crisp video, Tanner Chidester explains three crucial points that circumscribe the solopreneurs versus entrepreneurs debate. He mentions Marketing & Scalability, Quality of Fulfillment, and Quality of Your Lifestyle as these three points. His arguments are really worth hearing.
He also tells you why neither solopreneurship nor entrepreneurship is superior to the other. Both are alternative. Both are choices.
Differences in Business Orientation
1. How solopreneurs and entrepreneurs see themselves as business bosses
Being the sole people in their businesses, solopreneurs hardly ever see themselves as “bosses”. Except perhaps in their author bios, where they may mention themselves as “Founder-Owners” of their businesses, they seldom introduce themselves to others as the top people in their businesses.
They may say, nonchalantly, that they “have a business called XYZ”.
Entrepreneurs are very conscious that they are the bosses of their businesses. Even when they are starting out as lone founders, they envision having a team around them soon. They present themselves to potential inventors or other stakeholders as the Chairman/President/CEO of ABC Company.
The business card is often a crucial piece of self-positioning, and entrepreneurs are particular about establishing who they are from the start.
2. Solopreneurs are driven by passion, and entrepreneurs by vision
Solopreneurs start businesses around their passion areas. Even if their businesses seem to be built around their areas of expertise or experience, that expertise is also often their area of maximum motivation.
If a solopreneur has to choose between writing a “passion statement” or a “mission statement”, the former would come easier to them. That’s because they are so conscious of the here and now of their businesses. They don’t think so far into the future.
Entrepreneurs, on the other hand, are vision-driven. They see the businesses, in their minds, as far as five, ten, fifteen years into the future.
They imagine bustling teams, many branches around world capitals, a large repertoire of products. They see a “mission statement” as a “values document” they can be used to bind their disparate teams together as a whole.
3. How solopreneurs and entrepreneurs define their business models
The business model of most solopreneurs is the classic online inbound marketing model. They build their websites and online presence through social media accounts. They blog a lot and build traffic, traction, and a loyal readership of trust.
They build their own credibility, authority, and thought-leadership. They then try to see what products they can create or sell to the tightly-knit target audiences they have built.
The entrepreneur, most often, believes in the classic outbound marketing model of business. First, know what you want to sell, then find the audiences for that and woo them. And in the process of promoting the product and the brand of the business, get the brand to become a dominant one, trusted by external stakeholders and internal employees alike.
Entrepreneurs veer towards the outbound marketing models because they believe they need to “push” the products faster – to turnaround revenue faster. After all, they have teams to pay salaries to. They can’t afford endless patience, and neither can their investors.
Differences in Financial Strategy
4. Solopreneurs vs entrepreneurs on spending effort vs spending money
Solopreneurs clearly understand that if they are unwilling to spend effort themselves, they will have to spend money instead. The trade-off between money and effort is clear. They have to be willing to double-down on personal effort in order to keep budgets on a shoestring level to survive and later thrive.
If they won’t write blogs, they’re going to have to spend a pretty penny on outsourcing. If they won’t manage their businesses themselves, they’re going to need to pay Virtual Assistants.
Enterpreneurs never see this effort vs money trade-off, because to them teams are indispensable. They are ROI-conscious instead. They see the greater initial expense as the route to greater profit.
A typical entrepreneur would calculate: “I need 20 people for my project. That’s going to cost me $X per month. How soon can I recover this money by sales? How many sales will be needed to cover costs? How many sales will be needed to get an ROI or profit of at least 25%?”
5. Financial management differences between solopreneurs and entrepreneurs
Most solopreneurs start sole-proprietorship businesses, where keeping personal and business finances separate can be a perpetual bugbear. Solopreneurs don’t begin business knowing much about accounts, taxes, compliances, and other legalities, so the nature of financial management is essentially basic. They don’t make their businesses formal as LLC companies until much later.
They take external advisory help when they find things becoming a bit unwieldy with financial terminologies they don’t understand.
Entrepreneurs start with financial advisors to hand right from the beginning. They generally make sure they know enough about the financial planning of a business because ultimately it’s the financial statements that reflect the wealth and equity created. They begin business worrying about what company format to start with, and how they will change that later.
They plan to have hired bookkeepers and chartered accountants, who can guide them at every step. They are armed for financial planning – and governance is largely about financial management.
6. Endure on vs exit out – what solopreneurs and entrepreneurs prefer
Solopreneurs seldom, if at all, plan to sell their businesses. On rare occasions, I have seen elderly solopreneurs think of selling their businesses when they fall ill or cannot do work anymore. Till then they plan to carry on, because their businesses are as much about keeping themselves occupied and enjoying life, as about earning money.
They never plan to retire unless forced to. They don’t even imagine passing their businesses to their children. Just as they followed their passions to start their businesses, they think their children may want to follow their own passions too.
Entrepreneurs seldom go into business without clarity on their exit strategy. In fact, putting down the exit strategy is part of every solid business plan. Entrepreneurs could think of selling out partial stakes in their businesses or going for a full buyout. They are also conscious of “succession planning” and grooming protegees.
Many live off the partial-stake-sale or buyout money they make for a while, but when the entrepreneurial bug bites them again, some create new businesses. Some choose to become investors in other entrepreneurial businesses.
Differences in Challenges At Work
7. The dissimilar workplace requirements of solopreneurs and entrepreneurs
Solopreneurs don’t need formal workplaces, and neither do they see their workspaces as “offices”. Even though some of them may convert a corner of their homes into “home offices” they seldom refer to their nooks as “offices”.
Their real business places are their gadgets – laptops, tablets, and mobiles. They can as well work from home, a beach, a park bench, or a nearby cafe table, so long as the laptop or tablet they work from goes everywhere with them.
Enterpreneurs need workspaces that are formal, and can house their teams. Even with the new normal of remote teams, they still can’t fully do away with the “physical office space”. There are lots of times when Zoom calls just can’t get the same results for them as face-to-face group meetings can.
Also, clients, customers, and investors set store by where the entrepreneurs are physically located. Offices cannot be in seedy geo-locations. Also, if they say they are 100% online businesses, their credibility is still questioned. They have to show some spanky office, somewhere downtown, to be able to reflect a certain brand aura and solidity.
8. The No. #1 challenge at work that solopreneurs and entrepreneurs have
Ask any solopreneur about the No #1 challenge in business and the answer will be “setting priorities”. Solopreneurs wear all the hats in their businesses that other people would have worn, if they hired them. Knowing what their A, B, and C priorities are must be crystal clear.
Many of them spend a lot of time redrafting their to-do lists again and again – because they are not sure which priority bucket an item goes into. Separating the “urgent and important” tasks from the admin trivia (that often facilitates the “urgent and important” tasks) is never achieved to their satisfaction.
Entrepreneurs, when asked about their No. #1 challenges, will invariably say “team alignment”. Since their business models are based on teams and team roles, there has to be perfect alignment between team members, between teams, and between teams and the business overall. Entrepreneurs cannot afford misalignment of priorities within their team hierarchies.
This is not an easy thing to achieve, because it calls for team training, sensitization of teams to the values, mission, and goals of the business, and monitoring discipline with strictness. A strong HRD head, who frequently instills the “business culture” to the teams becomes important.
9. The credit and the blame – how solopreneurs and entrepreneur handle these
Solopreneurs have to take both sides of the coin – the credit and the blame. They are the sole people in their businesses, so the pats on the back are theirs to hold close to themselves and cherish, while the brickbats are also theirs – hopefully to learn from.
The major problem most solopreneurs face is keeping their sensitivities and egos aside and not taking things personally, whether they get the credit or the blame for circumstances that arise out of their work. When you are a single-person business, and you are the brand, both kudos and criticisms must be given due distance from your own self. You have to develop some detachment.
Entrepreneurs as bosses often take the credit but pass down the blame. Or, at least, this is the perceptions their teams may have of them. They have to do as much as they can to distribute credit down the line and make it belong to everyone when it comes.
Entrepreneur bosses also have to show that they too take their share of the blame when things go wrong because “the buck stops with them”. When identifying blame for a job gone wrong, it has to be empathetic corrective action and not always harsh punitive action. You don’t want to lose a valuable team member. You want the member to lose the potential for a repeat mistake.
Differences in Business Roles
10. Why solopreneurs are usually doers, and entrepreneurs are usually delegators
Solopreneurs create a business where they are “doers” – expressing their talents, passions, or expertise. They can hardly bear to see somebody else doing what they do best in their businesses, while they merely oversee the other person. Many solopreneurs believe no one else can do what they can do, in the way they uniquely do it.
A lot of solopreneurs, for instance, feel a lot of angst if they are forced to outsource the work they are splendid at. If they write well, for instance, they can hardly bear the “inferior writing skills’ of an outsourcing freelancer, and may spend a lot of time correcting the “inferior work”. They are such compulsive doers, and often perfectionists.
Enterpreneurs create businesses where they are “delegators” not “doers”. They see their roles as supervisory. They set the “quality of work” expectations, and then monitor if the work done by external or internal workers is up to the mark.
Indeed, they are right to be “delegators”, because they enter business not because they themselves have a talent or skill to showcase. They start businesses where they can engage a bunch of doers and they can create wealth from the work of other people. They bring together talents and expertise and see it as their role to create wealth that is greater than the sum of its parts.
11. Production vs promotion – the primary roles of solopreneurs vs entrepreneurs
In business, solopreneurs would rather handle production, and leave the promotion to others. If marketing and promotion are not their strong suit (as it often isn’t), they may well be tempted to hire experts for a time, or take it campaign by campaign.
Some solopreneurs train themselves to learn how to market their work better, but still, it’s not their natural instinct. On the other hand, product creation is familiar territory – and so much time is given to production finessing, sometimes, that marketing activities often fall way behind.
Entrepreneurs, contrarily, tend to take promotion of the business and products on themselves, leaving production to the “guys in the backroom”. Even when they hire marketing managers, the entrepreneurs right at the top of their businesses become the key deal-makers when closing sales with customers or clients.
They leverage their position at the top of their business hierarchy to make that final selling argument that makes fence-sitting customers tip over. In such cases, their credibility is built on how many strata of employees they have under them. The bigger the pile of people they are sitting above, the more their word counts.
12. Maintaining business control – strategies of solopreneurs and entrepreneurs
If solopreneurs have an instrument of control over their businesses, it is the humble “to-do list”. Other types of aids and tools may include worksheets, checklists, cheatsheets, planners, and so on. Simple documents that help clarify the mind, and put tasks into neat compartments on a sheet of paper, is all that it takes to make solopreneurs feel “organized” and “disciplined”.
Solopreneurs like clutter-busting their minds because there is a limit to how much one brain can assimilate and work with.
Entrepreneurs are often shown as sitting in front of “dashboards” – their centers of business control. The dashboards may have real-time simultaneous performance monitoring of various performance metrics of their businesses.
In large businesses there is often a domino effect when one performance metric falls. It impacts a whle lot of other performance parameters. Knwoing where to correct the issues is part of the entrepreneur’s smartness. Unless he is in control of the whole business, the entrepreneur will not be able to identify the underlying single problem under the labyrinth of symptoms of a the problem that appear in different parts of his business.
Differences in Scaling Business
13. The tall fir tree vs the wide banyan tree – how solopreneurs and entrepreneurs scale
Solopreneurs prefer scaling by growing lean but very tall, like fir trees. Many of them can – and do – make millions, while remaining as single-person businesses. Solopreneur businesses are by no means only “small businesses”, as people wrongly think.
It all depends on solopreneurs learning, over time, exactly where to spend more time to rake in more revenue – and to studiously avoid other tempting activities that are not financially productive, or take them sideways. Some solopreneurs, who remain small, may do so because they like to have small businesses – but that does not mean that those who dream big cannot make it into the millions club.
Entrepreneurs usually scale by growing wide with branches and roots like the banyan tree. Entrepreneurs dream of geographical widening, more teams, more projects, more roots on the ground, and more expansion that is both organic or through acquisitions and mergers.
Their thinking almost exactly resembles the banyan tree, which grows wide and broad, rather than tall, and puts down many new hanging roots from its branches, that then touch the ground and become wide trees themselves, attached to the mother tree. The more widening and roots that form new growth, the more revenue for the entrepreneur.
14. Niche expansion vs opportunity expansion – how solopreneurs and entrepreneurs develop
Solopreneurs, when they exhaust the potential in their original niches, may either drill down deeper into sub-niches or grow by entering shoulder niches. They seldom, if at all, venture into totally new territory that is not in some way an outgrowth of their original niche.
This may be mainly because they have extreme specialization in their niches, which may get watered down with too much divergence from their topic of authority. They know that if they try to do too much and lose their niche specificity, they will be on shaky ground where they cannot establish thought-leadership.
Entrepreneurs are generally open to growth even in areas unrelated from their original business idea. For instance, a businessman I know had initially started a book distribution business, but when he later found a potential market in selling children’s toys, he gladly entered that area as well – and sold both books and toys via ecommerce. The dictum that appealed to him was to go wherever the money was to be found, and if that meant entering an unrelated territory, so be it.
Later, however, he found a way to make his brand mean both books and toys by the simple trick of creating a third spin-off business that would create children’s books. He thus bridged his disparate money-making streams by creating a third harmonizing money stream. This is how an entrepreneur thinks and scales.
15. Passive income vs increasing dependency – how solopreneurs and entrepreneurs earn
Solopreneurs are hard-pressed for time, so they do well when they productize their services and offer passive-income products. What are passive-income products?
Let’s say we have a solopreneur who is an ace at Internet Marketing via SEO. Instead of consulting in his service area, whereby he can only handle a few clients at a time, he may choose to create an SEO keyword tool and put it, along with a user manual and demos, on his website. He can sell the tool’s usage as monthly subscriptions. By “productizing his knowledge”, his product can sell without his further intervention. Money will come in literally even as he sleeps. It’s about giving customers the self-service option for the solopreneur to earn.
Entrepreneurs would rather prefer to handle complex projects where they can create vendor-dependency. The larger or more complex a project is, the more opportunities an entrepreneur gets to add items to his bill (e.g people used and their time, their innovations, their training services for clients).
Further, entrepreneurs may also charge a “performance fee” as a percentage of the greater results achieved than expected by the clients. And then, they may also charge for project maintenance. It’s about making the client dependent on your business for the entrepreneur to earn.
Differences in Personal Satisfactions
16. Meaningfulness vs financial success – what solopreneurs and entrepreneurs find rewarding
Solopreneurs do value money-making from the business, but not as much as “meaningful work”. If you had to make a solopreneur do what he didn’t find meaningful and satisfying, he would rather pass up the work, no matter how much money it promised. A job or task needs to be meaningful to him in the way he thinks he can enjoy doing it – while also help others with his product being of value to them.
A classic example would be a solopreneur music artist who sells his albums as products online. He creates music with meaningfulness to himself – and gets heart and soul absorbed in the creation of it. He also then enjoys the fact that people who buy his albums also find their own meaningfulness in what he has produced.
Entrepreneurs are more transactional in their pursuit of financial success. They do not look to move the souls of customers. They prefer customers to make logical hard-headed decisions to buy their products, and they enjoy promoting their products using logic.
They are not averse to using a bit of emotional pull when selling, but they expect the final decision to be one where the customer justifies his emotional attraction for the products with a logical sanction to himself to buy.
17. Profit vs creativity – what gives solopreneurs and entrepreneurs their motivation
Solopreneurs are deeply satisfied when their creativity gets due attention and applause. Their joy, their mojos, demand of them sophisticated excellence in the creation of whatever they sell. If there is room to be differently creative with every product they sell, they wouldn’t get all uptight about losing the standardization of their product range.
Creativity is, in fact, a psychological motivator for solopreneurs. Some of them even like to get creative in their workflow patterns and processes just for the variety they get in their work, from one day to another. Creativity keeps the solopreneur’s life spinning. Every fresh day brings something new with it – a new thing to create, a new way to create things, new people to know, and serve, new ideas and new twists to old ideas.
Entrepreneurs are driven by the idea of profitability. If creativity can help profit-increase, good. If not, profit is the numero uno goal. To that extent, entrepreneurs love standardization or planned customization, and they hate anything that smacks of ad hoc product development or product additions. This is because they calculate deeply every cost involved to know their exact profitability – and they know where to tweak it all for higher profit.
If the creativity quotient of a product is quantifiable and can be billed, it would serve their purpose. Otherwise, they’d prefer usually to know that their product is fixed in its costs, and they can rely on certain targeted profitability from it.
18. Business as an end vs a means to an end – how solopreneurs and entrepreneurs see balance
Solopreneurs see business, or their work, as one of the means to the end – the end being a happy, comfortable life. Work is one of their pursuits that add richness to life. Business is by no means an end in itself.
Work-life balance is cherished by solopreneurs. Doing business at the cost of the rest of their lives is not what they entered business for. Neither will they be very happy for long in such a business that eats up personal time, family time, and the elegant harmony of life. Business is important because it makes you feel “in the zone” when you’re working. But if it creates any kind of friction with the rest of your life and its tranquillity, then it bears review and a rethink.
Entrepreneurs love the business of being in business. They can be walking and talking business 24 hours a day. They so love everything “business” that many of them carry their business goings-on into their family living rooms and dining tables, invite business guests frequently with whom they can “talk shop”, and often drive their families to the edge with their absence from important family events because of business meetings.
Some of them carry their business even into the bedroom, with mobile phones pinging all night with messages from their ilk. Business, as a topic, gives them an adrenaline rush – and they’d never let a seminar or meeting pass without attending. I’ve often heard wives of such entrepreneurs describe themselves as “committee widows”.
So What Are Your Thoughts? Do Share!
This post is incomplete without your input. The community of solopreneurs would feel galvanized to hear from you … so do share your thoughts on this topic with us, in the comments field below this post.
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