#135:Innovation and Leadership: 5 Differences That Set Solopreneurs and Entrepreneurs Apart in Business

Show Notes

Congratulations on your decision to start a business and become a founder. So will you be an entrepreneur or a solopreneur? Why is determining which type of small business owner you want to be so important? Because the choice you make can have a direct impact on your bottom line and future sales.
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If you haven’t thought about what type of “preneur” you want to be, you’ve come to the right place! In this episode, co-hosts Lori Vajda and Nola Boea share five important business distinctions between a solopreneur and an entrepreneur.

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In This Episode You’ll Learn 

• The 5 unique differences that set solopreneurs apart from entrepreneurs
• How entrepreneurs and solopreneurs each build and maintain a profitable business
• While both solopreneurs and entrepreneurs face similar business risks, their level of responsibility differs.
• As a bonus, you'll get 24 ideas to start your own business. 

Key points Lori and Nola are sharing in this episode:

(04:23:21) Three main reasons first-time owners don’t consider the type preneur they will be and the impact it can have for a successful launch 

(05:45:70) If you don't know the differences between an entrepreneur and a solopreneur, you could make some serious business mistakes, including filing your taxes incorrectly or register your business with the government 

(07:58:71) Our definition of solopreneur and entrepreneur

(9:46:36) The five main differences between solopreneurs and entrepreneurs so you can determine which direction is right for you  

(19:28:92) 24 possible business ideas that you might consider for your first-time business

Resources 

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Transcript

[00:00:00] Nola: One key advantage of working for yourself is knowing you are in control of your own destiny, which includes having a say over when and where you work. If you've been considering making the thrilling move to start a small business, one of the first things you'll need to decide is if you'll be a solopreneur or an entrepreneur. Why is determining which type of small business owner you want to be so important? Because the choice you make can have a direct impact on your bottom line and future sales. Stay tuned listener, because in this episode we are defining these self-starter terms and explaining how their differences impact not only your day-to-day operations, but also your future aspirations. And as a bonus, you'll get 24 ideas to start your own business.

[00:00:41] Lori: Welcome to Sticky Brand Lab, where we bridge the gap between knowledge and action by providing you with helpful information, tips, and tools from entrepreneurs and other experts so you can quickly and easily jumpstart your side business. We're your hosts. I'm Lori Vajda, and this is my co-host, Nola Boea. Hi Nola.

[00:01:02] Nola: Hey, Lori. You know, you've created a few different side businesses. What dreams or aspirations did you envision for them? In other words, are you a big picture type or did you focus on the here and now details of launching your profitable business?

[00:01:17] Lori: That is a good question, and I actually have two different answers. The very first side business I did was as a dating coach, and I did that in pretty much the early 1990s. At that time, the internet was just coming on. I was more excited about getting a business on the internet, so I did the copywriting for my first website before they actually called it that. I had a designer, I mean, I did everything there and I was thinking about all the things necessary to launch a coaching practice. So it was very much in the present moment in the here and now just getting started. I say that because later I realized that there was a novelty to a dating coach. It was new when I started it. But I really wasn't thinking big picture. And later as that became more of a trusted kind of coaching practice, it really took off. And there's some pretty big name people who ran big companies as a result of starting either in matchmaking or dating. And I missed that window because I wasn't thinking that way.

So that lesson learned prompted me to think differently on a second business and idea that I had, and that was, my husband had started a paddle board shop, and we were selling paddle boards, but we were also renting them. And one of the things that I had noticed was that there was a lot of clothing related to surfing, but not so much related to paddle boarding. So I thought, hey, what if I develop a line of designs for t-shirts and then small independent store owners like we were, could have them customized with their location and the name of their shop. So in that case, I was thinking very big picture, and as a result, I wasn't putting into place all the small steps that needed to happen as a small business just getting started.

[00:03:21] Nola: Okay. Yeah.

[00:03:23] Lori: Which I think kind of lends itself to why you and I thought that it's crucial to understand that there are two types of small business owners. I think it also demonstrates how if you're starting your business without taking that into consideration, it does have a definite impact on your growth potential, on your sales potential. But there's one last point that I also want to make here, and that is you don't have to be solid in your determination to be just a solopreneur or an entrepreneur, but if you have a general idea of what you envision, it helps you avoid working on things that are not important. And also helps you determine what is important as you launch your new business.

[00:04:09] Nola: Exactly. And that's simply because each path has its own business model, right? And each business model has its own opportunities, challenges, and goals. And those define what you should actually be focusing on. So Lori, why do you think most aspiring first-time entrepreneurs don't consider this before starting their business?

[00:04:30] Lori: Well, if they're like myself, when I launched the dating coach business, it's because I didn't know any different. I didn't know that being a first-time entrepreneur, I didn't have any idea about the business structure that I was getting into. I was just enamored with the idea of starting something that really didn't exist, and that was being a dating coach.

But I also think that another reason people don't consider the two entities is because they're often used interchangeably with other terms and phrases. You hear entrepreneur, solopreneur, small business, side business, side gig. You hear all of these terms and they're used so interchangeably, not just with other business owners, but in the media to being rather confusing. Now the reason that those are often interchangeable is because the keywords associated with them have a bigger audience draw. Think about that for ourselves. We say that our podcast is all about empowering first-time entrepreneurs in the second half of a vibrant life. We use the term "entrepreneur" because it has a bigger reach, than "side business" does, for example.

[00:05:46] Nola: Yes. And so we use it in a general term, and that's often how these terms are used. They're general, they're kind of interchangeable, but yet if you don't know the real differences between those terms, you might not do things very practical, like filing your taxes correctly. Or you might not register your business with the government correctly, or you might incorporate with maybe the less than ideal business structure. And ultimately, it really does all come down to business model. And knowing the differences between entrepreneur and solopreneur helps you decide which type of small business model is right for you and your goals. And this is why we're talking about this topic.

So now, I do think it's important to point out here that things don't necessarily have to be cut and dry, put in one box or the other box, because that's not life, you know? In fact, it would be totally common to choose one path and then change your mind down the road once you're in it, once your company's running, and you really have a good sense of your short and long-term goals. But the thing is, knowing the differences upfront really gives you an advantage right from the get go.

[00:06:56] Lori: It does, it makes things a lot easier. You know, some of our early guests that we interviewed gave stories on being asked to do something within their wheelhouse, and they kept getting asked. And so they had to manage the requests, and that led them to becoming a solopreneur, and they were doing that on the side to their full-time job. And then as the demand kept increasing, they found that they were at this crossroads and they had to make a decision. Am I going to stay doing this on the side, or am I going to go all in and turn this into an entrepreneurial business like an agency?

[00:07:35] Nola: And that is exactly why we wanted to talk about this. Our goal today is to point out the five main differences between solopreneurs and entrepreneurs. So you, listener, can determine which direction is right for you. And in doing so, we'll be giving you 24 possible business ideas that you might consider for your first-time business. So shall we get started?

[00:07:56] Lori: So let's start with the term solopreneur. Did you know Nola, that it really didn't come to be in our awareness until the 1990s? I think that's when it was first coined the term.

[00:08:11] Nola: That's probably about when I read it in Entrepreneur Magazine and thought, Ooh, that's cool.

[00:08:17] Lori: Yeah, it makes a lot of sense because it's also when I started my dating coach practice. But it wasn't really until the 2010s that it became much more of a common vernacular, and I think during the pandemic and since the pandemic, it's really exploded. So a solopreneur is really just a business owner that also is the workforce. A good way to think of it: you are responsible for everything. You do the marketing, you do the organizing, the managing the sales. You wear a multiplicity of job titles as a solopreneur. You might outsource some of your services or some of the work that you do to a freelancer or to a consultant or to another professional, but you're not hiring employees. So at the end of the year, at least in the US, you would issue 1099s versus a W2.

[00:09:13] Nola: Exactly. So even though you might reach out for certain types of help, you're still a solo entity, you're still working solo. On the other hand, an entrepreneur might start out as a solopreneur, but their aspirations are larger. Entrepreneurs start companies - think startups - because generally an entrepreneur's business model is focused on scaling it up and achieving growth. And as a founder, CEO or managing partner, you are more likely to seek funding from investors or be willing to take on debt to finance your business growth.

Now, both a solopreneur and an entrepreneur will usually start their business based on an idea, a product, a service. Of course, they're going to get all excited and dive right in, but while as solopreneur will remain solo, entrepreneurs quickly focus on building a team to help them bring the business to a wide market. So there you have it. We've just defined the first major difference between the two types of owners. Solopreneurs primarily work alone while entrepreneurs focus on building a team and scaling.

[00:10:16] Lori: Perfect. Now I'm going to give difference number two, and that has to do with what you're selling. Is it a single product or service, or are you looking to offer multiple options and multiple verticals? Entrepreneurs start their endeavors with the goal of expanding by offering a variety of goods and services. Whereas a solopreneur usually is committed to just one product or product line and service.

So here's an example. A solopreneur might offer coaching services. They might start off doing that one-to-one, but expand to group coaching or to put together a webinar or a course. They might sell books from it, but everything is dependent upon them. So if there's no them, there's no sales. Whereas an entrepreneur would look at coaching from the idea of an agency. Here, they would offer a variety of subject matter experts for the buyer or the prospective customers to choose from. So they might have a business coach, a life coach, a meditation coach, a nutrition coach, whatever it is. You would come to the coaching agency. And that agency might also provide training services on specific techniques that they've developed that fall under their umbrella. Does that make sense?

[00:11:40] Nola: Absolutely. I like that example. Solo practitioner versus agency. Yep. That's perfect.

[00:11:46] Lori: Now, I recently had an experience in which I thought I was working with a solopreneur and it turned out I was working with an entrepreneur. I was looking for a tooth fairy pillow. Are you familiar with these?

[00:12:01] Nola: No. When I was growing up, the tooth fairy pillow was the one that my head was on.

[00:12:04] Lori: Exactly. And as a result, I think over the course of raising kids, you hear stories from other parents about the kid who wondered if there really was a tooth fairy, so they didn't tell anybody they lost a tooth.

[00:12:16] Nola: Yes. Aw.

[00:12:18] Lori: Or the parents who hated to go in and try to get under the pillow for fear that they would wake their kid up. Well, the tooth fairy pillow is a way for a child to put their tooth into the little pocket, but you can also get them and hook them on the door, and so some kids will put those on the doorknobs outside of their bedroom. Makes it easy for parents.

Well, anyway. I was looking for one and went to Etsy. I love the homemade, the idea of the customized and personalized pillow, and I saw a vendor on Etsy that I was familiar with. I had actually seen this person on a GMA's Deals and Steals. And I thought, oh, well, I'm familiar with this particular brand, so let me reach out. And I specifically reached out on Etsy to ask her if she could do something that was more customized. I wanted a different hair color to go with a different eye color, and then personalized with the child's name on it. And I didn't hear from her, and I sent a follow up email. I still didn't hear from her, so I reached out to another vendor and she responded right away. No problem personalizing. And customizing it. So I went with her. Later, I heard back from the first vendor that I reached out to, and she let me know that she didn't make those pillows, that the only thing that they did was personalize them with the child's name on it. So she only had a very limited selection of what she could offer.

[00:13:48] Nola: I think that's really fascinating, and not only in the difference between obviously what was somebody operating as a solopreneur versus somebody who had a lot more going on. I personally think it's interesting that in your example, that particular business model made an impact on your customer experience. Depending on which business model you were engaging with made a difference in your customer experience. I just think that's food for thought.

[00:14:13] Lori: I know I wouldn't have thought that way , and you kind of think that that's going to be the case on Etsy. I think it also just shows that you can be an entrepreneur and have a storefront on Etsy, on Amazon, your own website. But again, that's the difference between an entrepreneurial mindset and a solopreneurial mindset.

Which brings me to the third difference, and that has to do with time commitment . Broadly speaking, a solopreneur may have another job, be in another stage of life where they only want to work part-time. For example, they might be retired or they might be a stay-at-home mom. You could also be a person with a multiplicity of interests. And so here your business is just one of many that you're running, kind of keeping it small, generating multiple streams of income. By contrast, an entrepreneur dedicates all or the vast majority of their time to their business.

[00:15:14] Nola: Exactly. And while you talked about the time commitment, this fourth difference I'm about to explain has to do with the business' growth opportunities. So one of the main differences is that the vast majority of solopreneurs, they really don't have any desire to scale their business a whole lot. In fact, many solopreneurs limit what they do to intentionally keep their businesses manageable. This allows them to make decisions quickly and get the work done on a flexible or a minimal schedule. And I have an example about that.

[00:15:46] Lori: Do you share, Nola.

[00:15:49] Nola: Okay. I will. My sister is an Alaskan artist and there was a time when she supplied local gift shops with these unique handmade notecards.

[00:16:00] Lori: Woo. How cool.

[00:16:01] Nola: Yeah, they were very cool. They featured animals and cultures that were indigenous to, let's say the Arctic Circle. And oh, they had fur on them. They were very tactile. So she would occasionally send me one of her handmade notecards, and you know, I naturally kept them and actually grew a collection. So, one year for Christmas, I created an e-commerce website featuring photos of her notecards, and I unveiled it to her as a surprise. And I let her know that I'd be willing to help her take her business international. And I could see her cards being sold in gift shops and stores in Canada, Norway and Greenland. You know, I was thinking really big. This could really go someplace! Well, she lovingly and kindly declined my offer. And I, I was, you know, kind of bewildered at first. But she explained that she'd really already looked into what it would take to mass produce her products, and she decided she did not want that life. She intentionally wanted to keep her enterprise small. She had a season for crafting, a season for selling, and she filled up her remaining time doing other artistic endeavors. She had no interest in going all in to scaling this one product into a full-time company. Even if I did offer to help manage the business aspects.

[00:17:21] Lori: You know, I always often say, when is help, not helpful? When it's not helpful. And that's a great example of she knew what she wanted. And she was very clear about it, on the other hand, I think it's also a great example of the difference between a solopreneur and an entrepreneurial mindset. An entrepreneurial mindset, you still could be a solopreneur. Like for example, maybe you have a restaurant and you only want to serve breakfast, or you only want to serve breakfast and lunch. So you still have a lot of hours, but you don't have evening hours. You're not all day. You get to limit those interactions. By the same token, if you had an entrepreneurial mindset, you might think, okay, I'm going to run my restaurant and I'm either going to have another location I envision that someday, or I envision selling, like if I was a restaurant, maybe I have spices and rubs and sauces, and so I have this other stream that I want to open up and sell to diversify my offerings, if you will.

[00:18:25] Nola: Yep, good examples. Our fifth and final noteworthy difference has to do with decision making. Since entrepreneurial businesses include more people, your decisions, you know, they can have wide ranging effects, especially when the goal is expansion. And as a result, your decisions could have a significant impact on your employees, your suppliers, and your investors.

By comparison, decision making as a solopreneur is pretty straightforward, and more often than not, it's a personal choice. Let's take the example of a solopreneur. If I'm a solopreneur and I want to take the month off, I can make that decision for myself. I know my own budget, I know my own schedule, I know my customers. I can do that. Yet, if I'm an entrepreneur and I decide to close my company for a month, like a lot of European businesses do, and I'm kind of jealous. Especially if you're in the US, it could have a significant impact on everyone involved.

[00:19:22] Lori: Yeah. Nola, this perfectly illustrates why we thought this topic was so important. Because regardless of which direction you ultimately go in, one of the things is knowing that you as the individual have something to offer to people out there. So if you've been thinking, how can I use my skills, my knowledge, my passion to start a business, we've got a few ideas here for you, and here's some good examples.

Maybe you are not ready to make the full-time leap into solo partnership and want to test the waters and see if this idea that you have even has any traction. So here you're going to build something based on your knowledge and skillset. You could offer consulting services or coaching services. You could also offer to do speaking engagements, host workshops, or do trainings, anything that's on the side of your full-time job.

[00:20:22] Nola: Now listener, if you haven't caught on yet, we've started that countdown of the 24 business ideas and Lori just listed I think about five.

[00:20:31] Lori: Woot woot! Okay, so now let's say you're ready and you want to start offering freelance services on the side. This works especially well for creative types or people with kind of industry niche services. So here, think if you fall under these big umbrellas and you have an interest or passion for event planning, graphic design, web development, bookkeeping services, accounting, photography services, market vendors, social media managers, content creators. You can also now think about, well, what could I do with my hobby or passion? And if you, again, fit that creative model, that could come under the idea of artists who, like your sister, create business cards; musicians who do jingles, or if you're in podcasting, it could be your intro or outro; bakers who do home baking services out of their kitchen; jewelry designers, woodcrafters, teachers, Farmers market vendors. You know, maybe you love doing herb gardens. Clothing designers; maybe you're a sew-er. Videography.

[00:21:47] Nola: Okay, and

[00:21:49] Lori: What are we up to? Nola?

[00:21:51] Nola: That's ... We are up to 24.

[00:21:53] Lori: Yay! So here, as the demand for your services or your expertise really come into play, you can decide for yourself if you are going to just do this on your own or if you're going to contract with other people. If you do that, you still fall under the umbrella of the solopreneur. But let's say you really love the freedom and flexibility of being your own boss, and you see the demand for your services continues to grow. So you might make the decision to start a company or start an agency, or even develop an online presence with an e-commerce store or a physical storefront and employ people. Now you are an entrepreneur.

[00:22:44] Nola: Yes you are.

[00:22:44] Lori: As you can see, there's not a right way to do this, but following what gets you excited and motivates you to try something new, that's what today's topic is all about.

[00:22:57] Nola: Indeed. Well, listener, we hope the ideas and thoughts we've shared here today have sparked your interest, curiosity, and willingness to turn your knowledge, experience, ideas, or passion into multiple streams of income, and empowered you to become a first-time entrepreneur in the second half of your vibrant life. Now, be sure to stick around to the very end of this podcast for a little fun.

[00:23:20] Lori: If you found the information we've shared helpful and want more tips, tools, and inspiration delivered directly to your inbox, sign up for News You Can Use over on our website at stickybrandlab.com or click on the link in our show notes.

[OUT-TAKE]

Not multiplicity. Let me do this whole thing again.

[00:23:44] Nola: You're going to have to build a character around that voice. Love it. We're going to have to have a guest. You have to do both voices.
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[00:23:55] Lori: I would be the voice and I will be the questioner. Okay. Okay.