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Posted February 15, 2024

How to Become a Successful Solopreneur

If you find joy in working on your own, managing day-to-day operations while scheming grand plans for the future, you may have what it takes to become a successful solopreneur. While there have always been solopreneurs, the concept of a person forming and growing a business on their own has become more widely recognized in recent years, emerging as a legitimate and popular way to work. Let’s take a little time to explore the solopreneur business model, starting with a look at exactly what it means to be a solopreneur.

What Is a Solopreneur?

A solopreneur, as you’ve probably figured out, is an independent entrepreneur who has founded and developed a business they run themself—on their own—solo. Solopreneurs can be new to the business world, but more often they possess work experience and valuable knowledge that customers are willing to pay for. They know how to leverage their skills to provide products and services that people need and want.

Some common endeavors for solopreneurs include: 

  • Content creation
  • Personal training
  • Consulting
  • Public relations
  • Pet care
  • Craft design
  • Copywriting
  • Graphic design
  • Photography
  • Web development
  • Software development
  • Event planning

All solopreneurs are entrepreneurs, but not all entrepreneurs are solopreneurs. While entrepreneurs start businesses, they don’t necessarily manage every piece of the enterprise like a solopreneur does. Entrepreneurs often get a business up and running with the idea of building it into a large company and hiring employees to keep things running. Solopreneurs, on the other hand, manage every aspect of their business, juggling tasks ranging from marketing, website maintenance, building a strong personal brand, and keeping their customers happy. They may occasionally hire a freelancer or contractor to help with work they cannot do themselves, but generally, it’s a one-person show.

Understanding the Solopreneur Business Model

A business model is simply a plan for how a business—whether a solopreneur or a Fortune 500 company—is going to make money. Regardless of the type or size of your business, you need a plan for how it will make a profit. Your business model identifies the products or services you’ll sell, who you plan to sell them to, how you’ll market the product or service, and any expenses you’ll encounter along the way.

Don’t confuse a business model with a business plan, as they are two different things. While a business model is a strategy for how a company will make a profit, a business plan is a document that goes into significant detail regarding the short-term and long-term objectives of a business and how it plans to achieve those objectives. Most business plans contain specific elements, including an executive summary, products and services, market analysis, marketing strategy, financial plans and projections, and a budget.

Some components of a solopreneur business model, which should be identified and crafted before you write your business plan, include the following:

  • A value proposition, that identifies your target customer and what sets you apart from your competitors in terms of the value you provide.
  • A description of the goods and/or services you offer.
  • Projected startup costs for things like technology expenses, interest on the money you borrow, and supplies and equipment.
  • Where you’ll get the money you need to cover the startup costs.
  • Your target customer base.
  • A marketing strategy that lays out your plan for reaching prospective customers and drawing them in as paying customers.
  • Projections of revenues and expenses.

Common Business Models for Solopreneurs

Your business model also refers to the type of business you’ll operate. There are many business models, with additional models being introduced as different types of businesses emerge. Here are some business models that are likely to apply to solopreneurs. Remember that business models can overlap. A hair stylist, for instance, might also sell retail beauty products at the checkout counter of their shop.

Here are a few business models to consider:

  • Producer or Manufacturer – A manufacturer uses raw materials or prefabricated components to build a product to sell. While some manufacturers are very large, like Apple or Volkswagen Group, others are more niche. Solopreneurs who make and sell crafts, candles, beauty products, or homemade goods fall into this business model. 
  • Brick-and-Mortar Retailer – This is a common business model, ranging from grocery stores to jewelry boutiques to sporting goods stores. A retailer, which can be a nationwide chain or a small, independent shop, buys products from a wholesaler or distributor and sells those goods to the public at retail prices. Flower shops, fashion boutiques, and small specialty shops are examples of retail businesses operated by solopreneurs.
  • Online Retailer – This business model can also be purely online. In this variation, the solopreneur builds an e-commerce website with CMS software solutions like WordPress, Square, and Wix and resells products made by others. These products could also be sold via marketplaces like Etsy and Amazon. The interesting thing about this model is with the ability to dropship straight from manufacturers or have inventory stocked and fulfilled by Amazon, the business owner never has to physically touch a product.
  • Fee-for-service Model – Under this business model, an individual or company charges a set fee for a service it provides. Many solopreneurs, such as athletic trainers, accountants, graphic designers, freelance writers, home and office cleaners, dog walkers, childcare workers, and hair stylists, employ the fee-for-service business model. Depending on the services provided, they might charge an hourly rate, a per-project fee, a monthly retainer, or a commission.
  • Subscription Model – If you’ve ever paid a recurring fee for someone to mow your lawn on a regular basis or purchased a community-supported agriculture subscription, you’re familiar with the subscription business model. Solopreneurs can benefit from this model as it assures regular income as long as the product, service, or software is provided.
  • Advertising Model – A solopreneur who reaches a substantial audience as a fashion blogger, recipe developer, or YouTuber might employ an advertising business model, in which an advertiser pays for space to promote its product or service within the content posted by the solopreneur. This type of business model is often used by individuals that label themselves as content creators.
  • Affiliate Marketing Model – The affiliate market model is when a solopreneur earns a commission when an audience member buys a product or service the solopreneur recommends. A cooking blogger, for instance, who tells an audience they couldn’t survive without a certain company’s blender or air fryer and provides links viewers can use to purchase those items, is employing an affiliate marketing business model.

How to Create a Business Model

There’s no one-size-fits-all business model, as every business is different and some businesses include elements of more than one model. Building a business model requires research and a thorough understanding of what you’re trying to achieve.

Here are some general steps to get you started:

  • Define the problem your product or service will solve – A hair stylist, for instance, solves a problem for a person needing a haircut or color. A web designer solves a problem for a person who needs a website and is unable to design it themselves.
  • Name your audience – Once you’ve defined the problem you’ll solve, think about who you need to connect with to do so. Who is experiencing the problem you can solve? That’s your target audience.
  • Know how your product or service can best serve the needs of your target audience – Think about what you’re offering and consider whether it may need to be tweaked to meet potential customers’ needs.
  • Identify how you’ll market your product or service to your targeted audience – Will social media provide the most exposure, or should you employ an email campaign or use paid advertising such as Google AdWords or LinkedIn Ads?
  • Anticipate what expenses you’ll encounter – Make a list of the fixed and variable expenses you’ll need to get set up and running. Once you have a handle on how much money you’ll need to buy equipment and supplies to get started and keep your business operating, you can think about how you’ll fund your venture and what prices you’ll need to charge to assure your revenue exceeds your costs.

Creating a business model can seem overwhelming, but as you get more involved and familiar with the type of business you want to run, who it will serve, and how customers will benefit from your offerings, you’ll become more comfortable with the idea. Also, there are plenty of good business resources you can consult, or you can study other, similar businesses to see how they’ve set up and are running their operations. Conducting that market research will help you understand what works well for other businesses, and also if there are gaps in the market your business can fill.

How to Grow and Nurture Your Business

While most solopreneurs prefer to keep their businesses small and manageable, building and running a successful business of any size requires diligence, knowledge, and perseverance.

A solopreneur should possess or be willing to develop savviness in a variety of areas to assure their business will grow and prosper, including these:

  • Create a powerful brand – Building a strong personal brand helps you establish enduring connections with customers, effectively communicate information about your product or service, and weave your personal story with your business persona. It enables you to communicate your unique value proposition (UVP), letting people know the skills and offerings you bring that set you apart from the competition.
  • Establish a brand identity – You’ll need a memorable business name, logo, and other visual elements to establish and build your brand identity, which is what customers and prospective customers see and identify with your business.
  • Build an online presence – A strong online presence can set your business apart by increasing brand awareness and drawing in customers. You’ll want to build a website, create effective content, and use SEO and social media marketing to make customers aware of what your business offers. Social media channels like Instagram and TikTok are very important for connecting with audiences online.
  • Grow a healthy network – Everyone needs a strong professional network to increase their chances for success. You can begin building a network by attending industry events or joining a business organization such as your local Chamber of Commerce. Talk to people and don’t be afraid to make connections. Members of your network are likely to provide business referrals, which could be invaluable. A referral from a trusted and respected professional can influence a potential client or even an investor, and can open doors you may not even imagine. Also, a network enables you to communicate, share, mentor, and be mentored. Connecting with those in your network can lead to collaborations and increased visibility and credibility.

Advantages of Working as a Solopreneur

No one can deny that working as a solopreneur has some compelling advantages, not the least of which is the freedom and flexibility it offers. You’ll never have to meet someone else’s expectations about how your business is run, clock in, or take a lunch break at a specified time.

Some other advantages to becoming a solopreneur include:

  • You make the decisions – When working as a solopreneur, you don’t have to check in with anyone when making business decisions, it’s completely up to you. This allows you to act nimbly and respond quickly to market changes.
  • Low startup and operational costs – Solopreneurs often incur low costs for starting and operating their businesses. Many can work remotely, requiring minimal equipment with low overhead costs. In addition, the IRS allows tax deductions for self-employed people who work from home.
  • You receive 100% share of the profits – This is powerful because it offers freedom. When you are receiving everything your business earns, you get to decide when you want to work and how often you want to work. You are in control of your destiny and that can be shaped by how you want to spend your work and free time.

Some Challenges to Consider

As with any form of business, you’re sure to hit some snags from time to time. A supplier doesn’t deliver on time, meaning you can’t complete an order for a customer, or a person you’re set to interview for a magazine article decides at the last minute they don’t want to participate. Because there’s nothing or no one between you and your client, you’re held responsible for any problems that arise.

Some other challenges include:

  • Isolation and loneliness – Working on your own can lead to feelings of isolation for some solopreneurs. Studies have found that social isolation can lead to negative health outcomes such as decreased immune function and higher stress levels.
  • Financial responsibility – Financial management can be challenging, especially when you’re in charge of all other aspects of a business. Solopreneurs who don’t have a background in finance or accounting sometimes find this work demanding.
  • Time management – There is no shortage of distractions, especially for solopreneurs in the digital space who can easily have their attention diverted by something they see on Slack or Twitter that causes them to lose focus and end up wasting time. As a solopreneur, you must be diligent about working both in your business and on your business, completing work for clients on time while also working to bring in new business. Dedicated work hours and freeing yourself from as many distractions as possible are keys to success.
  • Trouble finding work-life balance – While solopreneurs enjoy flexibility in their work schedules, they sometimes find themselves struggling to keep up with the daily demands of the job. Wearing the many hats of marketing director, sales manager, chief financial officer, customer service representative, and others can take a toll, making it difficult to balance work with other areas of life.
  • An inherent risk of business failure – As dedicated as you are to your business, there’s a possibility that it could fail. That knowledge can be stressful for solopreneurs who may not have a safety net or Plan B if their business does not succeed.

Steps to Get Started on Your Solopreneur Journey

If you’re feeling drawn to the idea of becoming a solopreneur, there are some concrete steps you can take to get started. Trust me on this…you can do it! My husband, Phil, and I launched one of the very first online legal document filing companies out of our tiny southern California apartment in 1997, and we never looked back.

Let’s consider some steps that are essential to getting started as a solopreneur:

  1. Narrow your focus and identify your strengths – Focus on a business idea you’re passionate about—something you can see yourself doing on a day-to-day basis for the foreseeable future.
  2. Research, research, research -. Check out who’s already doing something similar to what you aspire to, paying attention to their customers, how they position and promote offers, the social media platforms they’re active on, and other aspects of their businesses. Knowing your competitors can give you a leg up and help you distinguish yourself.
  3. Get clear about the product or service you’ll provide – A business that offers a product or service no one needs will not succeed. Be clear about the need for the product or service you’ll offer and identify the problem it can solve for potential customers.
  4. Identify your target customer – Knowing your target customers is imperative, as it will help you narrow the field to find a niche group that’s eager to buy what you’re offering. Creating a customer avatar—a sort of template of your perfect customer—can help you narrow down who you want to reach.
  5. Put together a marketing plan – You’ll work on marketing frequently once your business is up and running, but you should have an idea ahead of time of how you’ll achieve your marketing goals. Start by researching the four Ps of Marketing: Product, Price, Promotion, and Place.
  6. Establish a budget – Think about everything you’ll need to get your business started and then figure out how much money you’ll need to pay for it. Making every dollar count is essential to a new business, so budgeting is something you’ll want to focus on
  7. Document everything – Develop clear and concise product descriptions, purchase terms and conditions, consulting proposals, and contracts. The written word is a critical part of making sure you and your customers are on the same page and no one must guess or assume about what you’ll deliver. If you offer a product, you’ll need crystal-clear product descriptions, shipping terms, and refund policies so that customers know exactly what they’re getting and what they can expect once they purchase your product. Set clear expectations with customers and then over-deliver.
  8. Make your job as a solopreneur easier – Taking advantage of apps and automated systems available online and in the cloud can help you save time, assure greater accuracy, and improve your performance. Think time-tracking apps, apps to help you stay organized, automated marketing programs, accounting software, and so on.
  9. Be patient and don’t give up – It can take years to get fully established in a business you’re running yourself by building a robust client base, firming up your financials, perfecting your product or service offerings, getting the best marketing plan in place, and performing all the other necessary tasks. Believe in yourself as you work hard to achieve your goals. You’ll get there!

A Few Options for Making it Legal

Every business venture operates as some sort of business entity, either formal or informal. There are several entity types, but most small businesses operate as one a Sole Proprietorship, a C Corporation, or a Limited Liability Company (LLC).

Many solopreneurs operate as sole proprietors, which is a simple business structure with one person, or a married couple, serving as owner and operator. A Sole Proprietorship isn’t registered with the state, meaning it’s not a formal business entity. If you start a business without filing registration paperwork, your state will automatically consider your company to be a Sole Proprietorship. You might need to obtain some business licenses or permits, but basically, you can just hang out a shingle and declare that you’re in business.

That ease of getting an enterprise started makes this business type appealing, but there are some significant downsides to Sole Proprietorships:

  • No personal liability protection – The biggest problem with a Sole Proprietorship is that there is no legal distinction between the business and its owner. That means if you’re sued or you incur debt you can’t repay, your personal assets (house, car, bank accounts) are at risk.
  • Tax concerns – A Sole Proprietorship is subject to pass-through taxation, meaning the owner reports business income or loss on their personal tax returns, and the business is not taxed separately from its owner. That makes paying taxes easy, but there are disadvantages. Business income could put you into a higher tax bracket, increasing the rate at which you’re taxed. Also, as a Sole Proprietor, you’ll need to pay self-employment taxes, which in 2024 total 15.3 percent of net earnings.
  • Perceived lack of professionalism – Potential customers and suppliers sometimes view Sole Proprietorships as being less professional than entities such as LLCs or corporations. That can work against you as you strive to cultivate a loyal customer base and build business relationships.

A C Corporation is a company that’s registered with the state and authorized to conduct business. This type of business entity can have an unlimited number of owners, known as shareholders, but some have just one owner and are called single-owner C Corporations.

A C Corporation operates as a separate and distinct legal entity, which provides limited liability protection for the owner, and there are other advantages. Getting setup and registered as a C Corporation can be time-consuming and confusing, however, and you must adhere to various regulations to remain in compliance. Also, C Corporations are subject to “double taxation,” as they are taxed at both the corporate and personal levels.

In my opinion, a single-member Limited Liability Company (LLC) is the most beneficial business structure for many solopreneurs.

Here’s why an LLC is many times ideal:

  • Personal liability protection – An LLC is registered with the state and considered a legal entity that’s separate from its owner. That means the personal assets of the business owner are protected in the event the LLC is sued or cannot pay off the debt it has incurred.
  • Simple taxation – An LLC is by default taxed as a Sole Proprietorship, with all profits subject to income and self-employment (Social Security and Medicare) taxes. Taxes are filed on the owner’s personal tax return, which simplifies the filing process.
  • Tax flexibility – While taxed as a Sole Proprietorship by default, an LLC can request that the IRS tax it as a corporation. While choosing to be taxed as a C Corporation would subject the LLC to double taxation, selecting to be taxed as an S Corporation would enable the business to be taxed as a pass-through entity, avoiding double taxation on corporate income.
  • Increased credibility – Suppliers and customers often assign more credibility to a business that is registered with the state and operates as a legally formed entity.
  • Fewer regulations – An LLC is easier to get started and subject to fewer compliance regulations than a corporation, making it less complicated and less expensive to register and remain in legal compliance with the state.

LLCs often provide the best of both worlds for solopreneurs, offering legal protections and other advantages without all the complications and expenses of forming and maintaining a corporation. Requirements for getting an LLC up and running vary from state to state, and solopreneurs operating as an LLC don’t face quite as many registration requirements as an LLC that has multiple members or employees. Generally, you’ll need to take the steps outlined below.

Steps to Take to Form an LLC

  1. Choose a name for your LLC – You’ll need to choose a name and then conduct a name search to make sure it’s not already in use at the state or federal level, or that the name isn’t overly similar to that of another company within your state.  You also must conduct a trademark search with the United States Patent and Trademark Office to make sure the name you choose is not trademarked.
  2. Appoint a registered agent – A registered agent is a person or company designated to receive government documents and legal correspondence on behalf of an LLC, and every LLC must designate one for the business. If your business operates in more than one state, you’ll need a registered agent in each one.  CorpNet is authorized to provide our registered agent services in all 50 states, making it easy to meet this requirement regardless of your needs.
  3. File Articles of Organization – Articles of Organization, sometimes called Certificate of Organization, are the paperwork you’ll need to file with the state where your LLC will be based. Articles of Organization contain basic information about your business, such as the name and address and name of the registered agent. Complexity and costs for filing this document vary from state to state, and delays can occur if all the information is not correctly reported. CorpNet’s filing experts can help you prepare and file your LLC formation documents easily and accurately, assuring you won’t experience a delay in opening your business.
  4. File a Beneficial Ownership Information Report. – Starting in 2024, many businesses—including LLCs—are required to file a Beneficial Ownership Information Report with the Financial Crimes Enforcement Network, a bureau of the U.S. Department of Treasury.
  5. Draft an LLC operating agreement – While an LLC operating agreement isn’t legally required by every state, it’s a good idea for every LLC to have one, even a solopreneur operating as an LLC. An operating agreement is a business governing document that details the roles and responsibilities of members and outlines how the business will be run. It might seem like a single-member LLC doesn’t need an operating agreement, but it helps to establish your company as an entity that’s separate from yourself, which is important in maintaining your liability protection.
  6. Apply for an EIN – A single-member LLC will want to register for an EIN (Employee Identification Number) with the federal government. This EIN will be required to create a business bank account in the name of the company, and it will be used in purchasing raw materials or finished goods for resale.
  7. Obtain the necessary business licenses and permits – Certain businesses, including childcare centers, day spas, bakeries, tattoo parlors, and others, require state, federal, or local business licenses and permits to operate legally. If you’re not sure whether you need a license or permit, it’s critical that you research the business license requirements to find out.
  8. Keep your LLC compliant – In addition to the steps necessary for starting an LLC, there are ongoing compliance requirements to consider. It’s important to pay attention to these requirements, as they can change, or new requirements, such as the one mentioned below, can be imposed. Compliance obligations vary from state to state, but below are some common requirements that apply to solopreneurs:
    • Maintain separate business and personal bank accounts and keep track of all transactions.
    • File and pay all taxes.
    • File an annual report if required by your state.
    • Renew business licenses and permits.
    • Inform the state of any significant changes to the business, such as an address change or a new registered agent.

Getting Started as a Solopreneur

As you’ve surely noticed, there’s a lot involved with establishing and running a business as a successful solopreneur. If you think you’ve got what it takes and are ready to get started, you’ll benefit from professional help that can simplify the process and help you get established as a legal business entity. CorpNet team members will work with you to make sure all forms and applications are completed correctly and submitted promptly and cost-effectively.

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<a href="https://www.corpnet.com/blog/author/nellieakalp/" target="_self">Nellie Akalp</a>

Nellie Akalp

Nellie Akalp is an entrepreneur, small business expert, speaker, and mother of four amazing kids. As CEO of CorpNet.com, she has helped more than half a million entrepreneurs launch their businesses. Akalp is nationally recognized as one of the most prominent experts on small business legal matters, contributing frequently to outlets like Entrepreneur, Forbes, Huffington Post, Mashable, and Fox Small Business. A passionate entrepreneur herself, Akalp is committed to helping others take the reigns and dive into small business ownership. Through her public speaking, media appearances, and frequent blogging, she has developed a strong following within the small business community and has been honored as a Small Business Influencer Champion three years in a row.

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