Solopreneur vs Entrepreneur: 6 Key Differences You Need to Know

The way we work is changing rapidly. With the rise of the gig economy and advancements in technology that make it easier than ever to start and run a business from anywhere, more and more people are embracing a solo path to entrepreneurship.

In fact, according to a 2019 report by Upwork and the Freelancers Union, 57 million Americans – or 35% of the U.S. workforce – freelanced in some capacity that year. And a growing portion of those freelancers are what‘s known as "solopreneurs."

But what exactly is a solopreneur, and how do they differ from a traditional entrepreneur? In this post, we‘ll break down six key differences between these two paths to business ownership and help you determine which might be the best fit for your goals and lifestyle.

What is a solopreneur?

First, let‘s define our terms. A solopreneur is an individual who starts and runs a business completely on their own, without the support of a team or co-founder. The term is a combination of "solo" and "entrepreneur."

While solopreneurs and entrepreneurs share many similarities, such as a drive to create something new and an appetite for risk, they differ in some fundamental ways. Here are six of the biggest differences between these two types of business owners:

1. Business model and structure

One of the most significant differences between solopreneurs and entrepreneurs is the business model and legal structure they operate under.

Solopreneurs typically operate as a company of one, either as a sole proprietorship or single-member LLC. They tend to offer a specialized service, such as writing, design, coaching or virtual assistance, and work on a freelance or contract basis with multiple clients.

Entrepreneurs, on the other hand, often start out as solopreneurs but eventually build out a team and more complex business structure, like a multi-member LLC or C-corp, with the intention to grow and scale. They may offer a physical or digital product, software, or a suite of services, and aim to capture a significant portion of market share.

As a result, entrepreneurs deal with added legal and financial complexity as they grow, such as setting up payroll, providing employee benefits, and securing outside funding or bringing on partners. Solopreneurs are able to keep things simple by remaining a lean team of one.

2. Team and delegation

Another key difference between solopreneurs and entrepreneurs is how they approach building a team and delegating tasks.

By definition, solopreneurs wear all the hats in their business, handling everything from marketing and sales to project delivery and bookkeeping. They may occasionally outsource certain tasks to a freelancer or contractor, but for the most part, they are used to doing everything themselves.

Entrepreneurs may start out the same way, but they usually reach a point where they can no longer do it all and decide to hire employees, build out departments and delegate responsibilities. Their role shifts from executing day-to-day tasks to leading and overseeing a team and working "on" the business rather than "in" it.

This is perhaps the biggest distinction, as it requires a vastly different set of skills to manage people and scale a company vs. run a one-person operation. Solopreneurs often value their autonomy and prefer a more hands-on approach, while entrepreneurs need to get comfortable with giving up control and empowering others in order to grow.

3. Skills and strengths

Given the differences in business model and team structure, solopreneurs and entrepreneurs also tend to possess different skills, strengths and areas of expertise.

Solopreneurs are often experts in a particular craft or discipline, such as writing, design, programming, coaching or teaching. They are highly self-motivated and thrive working independently. While they may not be masters of every aspect of running a business, they are usually quick learners who aren‘t afraid to figure things out as they go. Above all, they know how to get stuff done on their own.

Entrepreneurs, in contrast, are often "big picture" visionaries who are skilled at spotting opportunities, innovating and taking calculated risks. They are natural leaders who know how to rally a team around a shared mission. While they may have started out doing all the work themselves, they are experts at hiring smart people and delegating effectively. They geek out over building efficient systems and processes that allow them to scale with ease.

Of course, there is certainly overlap in the traits of successful solopreneurs and entrepreneurs, such as discipline, resilience, adaptability and a growth mindset. But how those qualities are applied day-to-day can look quite different.

4. Lifestyle and workstyle

Another major distinction between solopreneurs and entrepreneurs is the lifestyle and workstyle they are able to create for themselves.

Many solopreneurs are drawn to this path for the freedom and flexibility it affords. By working for themselves and keeping their business intentionally small, they are able to design a career that fits around their ideal lifestyle, not the other way around.

For example, they may choose to:

• Work from anywhere in the world as a digital nomad
• Set their own hours and take time off when they please
• Pursue passion projects or side hustles alongside their solo business
• Take on only the clients and projects that excite them

In many ways, solopreneurship is the ultimate form of job crafting. According to a report by MBO Partners, 82% of independent workers say they are happier working on their own than in a traditional job, and 69% say it‘s an entirely different way of working.

Entrepreneurs, on the flip side, often find themselves putting in long hours and making personal sacrifices as they work to get their venture off the ground. They may have big dreams of achieving financial freedom and flexibility someday, but the path to get there is often quite grueling and uncertain.

That‘s not to say entrepreneurs can‘t enjoy many of the same lifestyle perks as solopreneurs – especially as they grow and are able to remove themselves from the day-to-day operations of their business. But it often comes at the cost of a lot of blood, sweat and tears in the early years.

5. Challenges and risks

Of course, no path to business ownership is without its challenges and risks – and solopreneurs and entrepreneurs both have their fair share.

For solopreneurs, some of the biggest challenges include:

• Wearing all the hats and juggling multiple roles
• Dealing with inconsistent income and cash flow
• Feeling isolated or lacking a sense of community
• Fighting self-doubt and imposter syndrome
• Avoiding burnout from doing too much

Solopreneurs also face outsized risk in the sense that they are solely responsible for the success or failure of their business. With no team to fall back on, the buck stops with them.

Entrepreneurs, meanwhile, grapple with challenges like:

• Attracting top talent and retaining employees
• Balancing growth with profitability
• Keeping up with changing market conditions and competition
• Fundraising and managing investor expectations
• Maintaining company culture and values at scale

While entrepreneurs have more people and resources to lean on, they also face higher stakes and greater liability. A study by CB Insights found that the top reasons startups fail include running out of cash, not having the right team, and getting outcompeted.

Clearly, there is no "easy" path to starting a business. But for some, the unique challenges of solopreneurship are outweighed by the freedom and fulfillment of being their own boss. It‘s all about understanding the tradeoffs and choosing the path that aligns with your risk tolerance, goals and desired lifestyle.

6. Growth trajectory

Finally, solopreneurs and entrepreneurs tend to have different visions for the future of their business and how they define success.

Many solopreneurs are content to keep their business small and aren‘t necessarily looking to scale into a big operation. Their version of success is having a steady roster of clients, doing work they enjoy and making a comfortable income for themselves.

In fact, staying solo is often an intentional choice to avoid the added stress and complexity that comes with building out a team and pursuing aggressive growth targets. Solopreneurs are often playing the "long game" and optimizing for sustainability over speed.

That‘s not to say solopreneurs don‘t grow and evolve over time. Many expand their services, raise their rates, productize their offerings or create passive income streams as they gain experience and clout in their industry. They may even choose to build an agency or collective of other solopreneurs to serve more clients and increase revenue – all while still maintaining the flexibility of a company of one.

For entrepreneurs, on the other hand, the goal is often to grow as big and fast as possible, achieve a successful "exit" by selling their company or going public, and then move on to the next big idea. Success is measured in terms of climbing revenue, expanding market share, and multiplying valuation – not necessarily creating a balanced lifestyle for themselves.

Of course, this is a bit of an overgeneralization, and there are certainly entrepreneurs building sustainable, socially conscious businesses for the long haul. And conversely, there are ambitious solopreneurs who may decide to shift into building a team once they‘ve hit a certain revenue milestone or personal goal post.

The key is to get clear on your own definition of success and reverse engineer a business model to support that vision – whether you choose to go it alone or assemble an all-star team.

Conclusion

As you can see, solopreneurship and entrepreneurship are two very different animals – each with their own unique advantages, challenges and measures of success. There is no one-size-fits-all approach to starting and growing a business.

If you crave autonomy, flexibility and the ability to craft your work around your life, the solo path may be an excellent fit. But if you dream of building something big, thrive in a team environment and are willing to embrace the added complexity that comes with it, entrepreneurship may be your jam.

Whichever path you choose, know that it will be an incredible journey of personal and professional growth. Because at the end of the day, that‘s really what it‘s all about – stretching outside your comfort zone, honing your skills and creating a body of work you‘re truly proud of.

As a wise mentor once told me, "The reward of entrepreneurship isn‘t the pot of gold at the end of the rainbow. It‘s who you become in the process of pursuing it."

The same could be said of solopreneurship. So if you feel the pull to hang out your own shingle and embark on the ultimate business adventure, trust that instinct. With hustle, heart and a willingness to embrace the unknown, you might just find the solo path to be the most fulfilling career choice of all.

Ready to dive in? Check out my ultimate guide to getting started as a solopreneur and learn the strategies I used to build a six-figure business in less than a year. The world needs what you have to offer – so dream big, start small and never stop growing.