Solopreneur business models abound – because every solopreneur, in a way, is their business model. Even if two solopreneurs are selling the same services, you’ll notice that they have tweaked their business models to suit their personalities, talents, and areas of forte. Not everyone is comfortable creating their products and services and marketing them the same way. A business model is about a way to make money with your area of expertise. Structuring your business to do that, given your comfort in your style, is the challenge. We’ve put together many opinions here on solopreneur business models for you to gain your perspective.
- The solopreneur business model has changed for the better over the last few years
- Solopreneurs need only be profitable enough to pay the foundersâ living expenses
- How you label the work your business does may have to evolve with your market
- Get real facts on how much you can potentially earn through your business model
- Setting out a business model is the best way to convince yourself to get started
- The conventional business scaling growth model is not the only way to grow
- Which is better â staying as a solopreneur or building it up to be a firm? It depends!
- This may be the only business model you need – use the â3×4 makes 12â rule
- Thinking of your business in the context of key functions enables a systemic model
- Whatever your business model for your solopreneurship, keep progress in perspective
- At the base of your business model is the question of how to price your offerings
- Set the boundaries of what you will allow for customers at varying levels
- We think big and try to start big – instead, think big and start small
- Solopreneurs can create great companies, but it takes a village to build scale
- Everything takes longer than expected in a business, so keep tweaking your model
- Take time to consider what business structure will work best for your situation
- The freemium model helps startups scale by attracting users without costly ads
- Business models are no longer what they used to be – only about the money
VIDEO: Kathryn Aragon, in this straightforward video, discusses “#1 Solopreneur… Is This the Business Model for You?” (Must watch: 26:11 minutes)
Kathryn Aragon is an experienced hand at solopreneurship. She explains what drew her into her solopreneur business and how she grew using a roadmap that was instinctively right for her. She asks you to question yourself before you delve in and teahes you the factorsand criteria that you can use to help you decide. She explains the simplest of solopreneur models – the professional freelancer model – and then goes on from there.
1. The solopreneur business model has changed for the better over the last few years
Jim Galliano in the article “The Solopreneur Business Model”:
“The solopreneur business model has changed a bit over the last few years. Today, this approach to the entrepreneurial journey is as much about lifestyle as it is about income. Depending on your situation, you may be happy with x-number of dollars per year? As funny as it sounds, you may not be driven to obtain unspeakable wealth!
Most of you didnât start your business with the goal of creating a mega-corporation in from home, did you? Most of you probably arenât comping at the bit at the prospects of managing a large staff of people, either? Remember, you have to manage whatever you build or whatever you own. So, itâs worth taking the time to be brutally honest with yourself when it comes to business. What do you REALLY want to build? Are you starting to find yourself disliking what it is youâre building? Youâre not alone.
If given the choice to earn a six-figure income with no employees or just by yourself, would you take it? No, thatâs not a trick question. The solopreneur of today has more advantages than at any other time in history. With the systems, platforms, and services we currently have in place, you can literally build an agency of one. Iâm using the word âagencyâ loosely in this context.
That doesnât mean you wonât want to hire a virtual assistant or other sub-contractors on an as-needed basis. Thatâs fine. What Iâm saying is, the core of your business will just be you. And yes, youâll be able to take time off, take vacations, and live a life that doesnât revolve 24/7 around the clockwork.â
2. Solopreneurs need only be profitable enough to pay the foundersâ living expenses
Gennaro Cuofano in the article “Who Is A Solopreneur? Mastering The Ultra-Lean Business Model”:
“Serial entrepreneur and venture capitalist Paul Graham popularized the term âRamen Profitability.â As he pointed out âRamen profitable means a startup makes just enough to pay the foundersâ living expenses.â
According to Tim Ferris, another way to look at it is to find a Muse by setting up in detail the TMI or target monthly income. Tim Ferris suggests thinking in detail about your monthly cash-flows.
In short, all the expenses that you are going to incur. Imagine, for instance, that you always dreamed of traveling the world. What does that mean? How many countries are you going to travel while setting-up your Muse? For how long will you stay in each country? How much would you pay off rent, travel, and living expenses?
It might sound complicated at first, but once you set this up, your goals will be much clearer. In fact, Tim Ferris makes your life easier by making a great tool available: The Monthy Expense Calculator. In short, this tool tells you line by line what expenses to take into account. After you have to divide by 30 (to get the daily budget) and add a 30% buffer (you must be ready for any emergency).â
3. How you label the work your business does may have to evolve with your market
Laura Adams in the article “Top Tips for Defining Your Solo Business Modelï»¿”:
“There are many versions of solo businesses, and yours may evolve over time. Consider the type of venture you want to build or may have already created. If youâre still not sure how to label your business, here are some tips:
Use the same business label as your competitors. If you have competition or know successful people doing similar work, find out what they call themselves. Search on LinkedIn or Google to read their business descriptions or bios for clues about the norms in your industry. If you call yourself a solopreneur because you think it sounds more prestigious than âfreelancer,â it could hurt your business prospects if your potential clients arenât familiar with that term.
Use the same business label your potential clients would use. The language you choose to describe your business should match what your potential clients and customers would search for. Do they type âindependent contractorâ or âconsultantâ into search engines? If youâre not sure what your ideal clients are looking for or where they would find you, the easiest way to find out is to ask them. And when a new client does discover you, be sure to ask them how. Find out what search terms, platforms, or people were responsible for your connection.
Use your business label consistently. When you decide on a business label, use it throughout your marketing: on print materials, websites, social media accounts and bios. Say it with confidence and a professional attitude when you talk about yourself. If youâre not consistent when you write and speak about your business, you may end up confusing people. Choose the label that works for you and stick with it.”
4. Get real facts on how much you can potentially earn through your business model
Margaret Kerr-Jarrett in the article “Solopreneurs Can Grow Faster and Smarter With a Lean Business Plan”:
“Before you can make projections for your future solopreneur business, itâs important to get a realistic picture of what you can achieve. Hereâs where old-fashioned networking comes in. Donât just guess how much you can potentially make; talk to real-live people in the field.
For example, you may assume that your earnings could take you into the six-figure range. Thatâs what they earn at Deloitte, right? Wrong. According to consulting.com, âThe average annual salary for a Business Consultant is $72,900.â Still not chump change, but not what you may have expected, either.
Regardless of what you read and guess, itâs important to talk to experienced individuals who can set you straight with honest expectations. Even if your field is yet-to-exist (talking parakeets on-demand, anyone?), you can still reach out to those with similar business and revenue models.
From there, do an actual sales forecast to model the revenue you think youâll be able to bring in. Put together a list of your personal expenses for the standard of living you require. Compare the twoâthis will help you understand how much revenue youâll need to bring in each month to make your venture your primary work. Donât forget to factor in self-employed (sole proprietor) taxes!”
5. Setting out a business model is the best way to convince yourself to get started
Erica Swallow in the article “Why Every Solopreneur Needs a Business Plan”:
“It’s incredible what the exercise of putting a plan to paper can do. A business plan allows you to prove to yourself that your business is possible. So, what are you waiting for? What’s holding you back? Let your business plan be the conduit for action â it’s time to fly.
Depending on how much time you’re willing to put into crafting your business plan, there are two resources that entrepreneurs of all stripes have used to much success: The Lean Business Model canvas, and MIT entrepreneurship professor Bill Aulet’s book “Disciplined Entrepreneurship: 24 Steps to a Successful Startup.”
If you have an hour to spare, start with the Lean Business Model canvas, created by Ash Maurya, author of Running Lean and Scaling Lean.
If you’d like to dig even further into your work and write a full business plan, I highly recommend Bill Aulet’s “Disciplined Entrepreneurship: 24 Steps to a Successful Startup,” an easy-to-read, step-by-step guide to writing a thorough plan. The book includes many examples to guide you through the process and thoroughly explains why each step is crucial, without being overwhelming or overbearing. “
6. The conventional business scaling growth model is not the only way to grow
David Parrish in the article “Solopreneur Business Growth Model”:
“J.K.Rowling is a highly successful and wealthy writer. Yet many business advisers would condemn her for not having a âproper businessâ because she hasnât grown it and employed lots of people. Their advice to Picasso would have been that he needed to employ lots of âmini-meâ Picassos if he wanted to be successful in business. Madonna, who describes herself as âan artist and a businesswomanâ is also successful and wealthy, yet her business is not âscalableâ. And if your business isnât scaleable, then it is condemned by those same business advisers as being merely a âlifestyle businessâ.
Whatâs going on here? There is a model of business growth, based on âscaling upâ, that is useful and appropriate for many businesses, But not for all businesses. Itâs the only model that many business advisers know, and as a result they push ALL businesses in the same direction, even when itâs clearly not appropriate for them. They say: âthis is how you must grow your business, and if you cannot or will not, then you are a failureâ. As a result, many solopreneurs then give up, or go their own way but feel they are not âreal businessesâ. Itâs annoying and tragic.
The conventional business growth model, based on scaling up, is a great one. It works. It makes sense. Iâm not against it. My point is that it is not the only way to grow a business. We can do business differently.”
7. Which is better â staying as a solopreneur or building it up to be a firm? It depends!
“Any successful entrepreneurs you may look up to will tell you this, your business growth is heavily dependent upon how fast you can make sound business decisions (and take required action accordingly.)
Itâs because being stuck in the space of indecisiveness is the silent killer of all businesses as it causes stagnation. Money, in case you didn’t know, loves speed and hates stagnation.
Hereâs the spoiler alert: If you are wondering, âWhich is better â staying as a solopreneur or building it up to be a firm?â, the only answer I can give you would be, âIt depends.â
The bottom line is there is no right or wrong way. Either can work for you. More importantly, there’s nothing you “should” do. Instead Iâm a huge advocate of the idea of you doing what you want to do. What it comes down to is getting seriously honest with yourself and answering this question instead: What do I ultimately want from my business?”
8. This may be the only business model you need – use the â3×4 makes 12â rule
Deborah Engelmajer in the article “You Donât Need A Business Plan, Solopreneur. Do This Instead.”:
“As a solopreneur, you wear two very different hats: the boss hat, and the employee hat. But itâs not always easy to know when to work for your business and when to work on your business. Hence, the 3×4 makes 12 rule — or, how to grow and reach your yearly goals.
12: Once a year, write down your objectives. This will take time, but it is crucial. Be as specific as possible. If one of your objectives is to increase your sales, note by how much? If you want to grow your email list: How many subscribers do you want to reach by the end of this 12-month period?
3×4: Every 3 months (so 4 times per year) look at your 12-month goals and ask yourself: What do I need to do in the next 3 months to get closer? This quarterly assessment allow you to stay focused on your yearly goals, while making room for experimentation.
Once you have your 3-month plan (based on your 12-month plan), break down your objectives into small, actionable tasks organized by priority, and focus on doing.”
9. Thinking of your business in the context of key functions enables a systemic model
Michael Gerber in the article “Systems For Solopreneurs”:
“If you look carefully at any business, you will notice that there are key functions that focus directly on interacting and serving customers. They are Lead Generation, Lead Conversion, and Client Fulfillment. There are also key functions that focus primarily on the care and development of the business itself. They are Leadership, Marketing, Money, and Management. Together these functions make up the Seven Centers of Management Attention model.
Thinking of your business in the context of these key functions enables you to view it systemically. In other words, your business is one working system with seven major supporting systems. It is a powerful and holistic business model that effectively demonstrates the integrative nature of all the primary systems in a business.
If you examine the strategy and activities of the different centers, youâll quickly understand that a lone real estate agent, psychologist or graphic designer still has both strategic and tactical work to accomplish in each center. The lone practitioner needs systems in their Money, Marketing, Client Fulfillment, Lead Generation, and Lead Conversion centers just like any other business.
Since theyâre on their own, much of the work in Leadership and Management focuses primarily on developing themselves as efficient, organized, self-directed leaders and managers of their individual enterprise.”
10. Whatever your business model for your solopreneurship, keep progress in perspective
Greg Mercer in the article “Lessons From A Solopreneur”:
“I definitely had a plan for my company, but reminding myself that the product would be an evolution was humbling.
My first step was identifying the pain points I experienced. A lack of resources for product research on Amazon inspired me to create a minimum viable product of my companyâs first offering: a simple but mighty browser extension to browse product ideas directly on Amazon.
Then, I focused on drafting ideas around each featureâs functionality and what a Jungle Scout platform would look like.
Achieving these milestones enabled me to concept a higher-level goal of building a complete solution for selling on Amazon.
When youâre building a company, you will put in long hours and feel like some days you get little return. But those small wins (like earning a customer for your first product) lead to big momentum and are reminders that youâre making progress.”
11. At the base of your business model is the question of how to price your offerings
Brittney Lynn in the article “Building An Actionable Business Plan For Your Soloopreeur Business”:
“Your circumstances also play a major role in determining pricing for your services and products. Are you relying solely on your income? Do you have children to support? How much of a nest egg do you have? Where do you live and what is your lifestyle?
Hereâs how I do it: I know how much I want to make in a year. It is a reasonable salary, something I could obtain if I were working a regular 9-5 job in this same field.
Once I determined that number, I worked backward and figured out how much I would need to make per hour to get to that salary. Then, when Iâm pricing out clients for projects, I make it based on that hourly rate.
Iâm sure some people think I charge too much. Others think I charge too little. I charge what I know Iâm worth. Whether that fits into someone elseâs budget is up to them.”
12. Set the boundaries of what you will allow for customers at varying levels
George Kao in the article ”
Simple Model for Authentic Businesses — Concentric Circles”:
“Hereâs the business model that I use, and recommend for all clients to consider. Itâs meant for those of us who wish to earn a living as solopreneurs, helping others with our wisdom and skills.
This business model offers complete location independence, so you can create an income anywhere you live, rural or urban, as long as you have a stable internet connection most of the time. You could also apply this to a local business, although itâs geared primarily for online businesses.”
Image courtesy: George Kao
13. We think big and try to start big – instead, think big and start small
Faisal Hourani, in the article “Solopreneurs: What strategies do you use to grow your businesses?”:
“For almost everyone that ever wanted to build a business this holds true: we look at how far this business can reach. Your goal for example is to build this multi million dollar business, and you did the maths already of course â if only 1% of the market buys, you are a millionaire.
Thatâs great but then we start working on it and we donât see the results we expectedâ¦ And that is the problem â we are thinking big and imagining it will also start big.
The secret is starting small while thinking big. And by starting small I mean breaking down your vision into achievable, measurable goals.
So instead of saying I want to build a business, you say I want to get 10 paying customers.”
14. Solopreneurs can create great companies, but it takes a village to build scale
Christie Kerner in the article “Solopreneurs: What strategies do you use to grow your businesses?”:
“Solopreneurs can create great companies for themselves, with robust revenue and reach. But, it typically takes a village to create something of massive scale.
Founders are often a jack of all trades, master of just a couple. It’s unreasonable to expect a person with the creativity to design well to also be expert at the tedious needs of accounting, for example. A single person does not typically have the breadth of expertise needed to get a business scaled, which is why in scalable tech companies you’ll usually see a founding trio: a hacker (coder), hustler (sales) and hipster (design).
Some founders opt to found solo and build a strong team that complements their skillset. There are less companies like that who make it to $100MM+ for a variety of reasons.
I’m pretty sure you can never say never when it comes to entrepreneurs, but true scale is a team effort one way or another.”
15. Everything takes longer than expected in a business, so keep tweaking your model
Brett Fox in the article “What is the best start-up business to start with a short period of time and investment?”:
“Donât start a business if you only have a short period of time. You will fail because startups take time. First time entrepreneurs underestimate how long it takes to build a successful business. Even a small, solopreneur-type business takes time to get to some sort of scale.
Whatever money you have, make it last twice as long as you planned on. Somehow, someway, you have to think longer term. If you have six months worth of money, find a way to make the money last for twelve months. If you have twelve months worth of money, then make that twelve months of money last two years. Everything takes longer than you think when you start a business.
Customer acquisition takes longer than you think it will because no one knows you exist. Building your product or getting ready to sell your service will take longer than you think. Your business model will likely need some tweaking to get customers buying from you. You likely will not make as money as you planned as quickly as you thought.
Keep this in mind as you decide what to do. But most of all, you need to be prepared to make your money last as long as possible.”
16. Take time to consider what business structure will work best for your situation
Kenny Hams in the article “What Is The One Piece Of Advice You Would Give To First-Time Founders Or Entrepreneurs?”:
“Perhaps youâre guilty of starting by taking on freelance work on the side, and eventually transitioning to entrepreneurship. Thatâs fine, but donât neglect the nuts and bolts of starting a businessâthey still apply to you.
âJust because youâre a one-person operation, doesnât mean you will have any fewer obligations as a business owner,â says Leo Welder, CEO of ChooseWhat. âTherefore, it is important to create a foundation for your freelance operation just like you would any other small business.â
Welder suggests taking time to consider what business structure works best for your situation. âYou need to protect yourself from personal liability and keep good records of your business financesâboth income and expenses,â he says. âFor most freelancers, creating a single-member LLC is going to be the simplest and cheapest way to protect yourself from personal liability. Because the business will have one owner, the paperwork for a single-member LLC is relatively simple.â
Not only that, Welder recommends setting up a separate bank account and credit card for business purposes, as well as choosing dedicated invoicing and accounting software that is linked to your business account.”
17. The freemium model helps startups scale by attracting users without costly ads
Ben Mor in the article “What are some inspiring and successful business models of startups?”:
“The Freemium Model explianed: This combination of âfreeâ and âpremiumâ has become a widely used approach amongst startups over the last decade. Broken down, the model offers a basic service to consumers for free, while charging for premium services (advanced features and perks) to paying members.
Linkedin is one of the best examples of a successful freemium model, with the free version letting users share professional profiles, while the premium offerings are talent solutions and premium subscriptions with added features. One of the most interesting reasons Linkedinâs model works is because each new member that signs up for free or premium increases the value for other members.
Make sure if you choose this model that you find a balance between what you give away so that users will still need or want to upgrade to a paid plan. One of the greatest advantages to a freemium strategy lies in its ability to be a marketing tool for your service, which helps early-stage startups scale by attracting a user base without costly ad campaigns.
Freemium models also tend to be more successful that 30-day free trials and other offers like that. Customers are much more comfortable with accessing a service for free, and the no strings attached feeling that comes with before deciding to make a purchase.”
18. Business models are no longer what they used to be – only about the money
Jennifer Tulio Barr in the article “What are some interesting business models?”:
“Historically, the best business models were those that generated substantial ROI/revenues, met (or exceeded) quarterly stock projections and enjoyed longevity.
Todayâs most progressive companies believe success is determined by much more than money. Experiences are important. Building relationships is paramount.
Innovation is often necessary to survival. And there is an expectation on the part of all stakeholders that companies will do well by doing good.
New business models that have emerged (some overlapping) include: social mission/community development, corporate social/environmental responsibility, the sharing economy/marketplace, social impact, subscription-based services, and build-to-order/customization.”
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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