A solopreneur is an individual who runs their business alone, without a co-founder or employees.
Deciding to become a self-employed is an incredible moment. While running your own business may come with risks (like many great things in life!), it's the best way to put your passions to work on your own terms. If you're looking to set up a solo business, there are many ways to achieve success.
Here are some tips to help you successfully navigate this new adventure while you launch your enterprise.
Solopreneur vs entrepreneur: key differences
You've probably heard of an entrepreneur—a person who creates and operates their own business.
A solopreneur is simply an entrepreneur who performs all the duties of running a business alone. They’re often called sole proprietors, self-employed, or a variety of other terms that all refer to being a solo business owner. They don’t have any employees and have the flexibility in how they operate and run their business. Even if you’re a solopreneur, you can still set your business up as a legal entity, such as a sole proprietorship.
There are many small business ideas that are successfully run by solopreneurs—think about house cleaners, tutors, graphic designers, writers, and Etsy sellers. These businesses are sole proprietorships. The solopreneur model is an affordable and straightforward business venture. Being a solopreneur also allows for total independence, which is a big reason why many turn to this business model.
If you're thinking about becoming a solopreneur, there are a few things you should keep in mind. Let’s look at what it means to be a solopreneur, the benefits and challenges of solopreneurship, and some tips for becoming a successful solopreneur.
If you’re a solopreneur, then you’re technically an entrepreneur as well. However, not all entrepreneurs are solopreneurs. Here’s a closer look at the difference between solopreneurs and entrepreneurs:
As you can see, there are some key differences between solopreneurs and entrepreneurs.
They also have minimal delegation (outside of outsourcing and automation of tasks like accounting), as they are responsible for all aspects of their business. Solopreneurs typically run small businesses with a narrow focus, which allows them to keep costs low.
Just like entrepreneurship, solopreneurship has good and bad aspects. Here’s a breakdown of the advantages of being a solopreneur:
Of course, there are also downsides to having to operate your business alone. Here are some key disadvantages of being a solopreneur:
If you like the idea of being your own boss, with freedom and flexibility, then being a solopreneur could be the right choice for you. Let’s look at some steps you can take to ensure success when starting as a solopreneur.
If you're ready to start a business, there are some crucial steps to take that can help set you up for success:
When thinking of starting a small business, it's ideal to find a niche market or area where your skills or products are needed but not yet available. This will help you differentiate yourself from your competitors.
The first step to becoming a successful solopreneur is to figure out your passion. Generally, this should tie into things you are good at so that your interests and skills align.
Here are some tips for figuring out if you can turn your passion into a business:
Taking inventory of these things—your talents, skills, values, and hobbies—is a great way to figure out what you’re passionate about.
Do you have skills that are in demand in your area, such as photography? Or will you need to use your skills to create a new kind of business? Look for trends surrounding your passion or industry, but be creative and think outside the box. Think about the problems that people are facing and the needs that aren’t being met.
Once you have an idea in mind, research the competition. Look for ways you’ll be able to differentiate yourself. Talk to competitors, potential customers, and business leaders in that market. Don’t forget to network with entrepreneurs and other solopreneurs.
You should also build a simple business plan so you know exactly where you want to be a year from now. Outline your funding requirements, and go after the capital you need by approaching investors, using your own equity, or considering a loan. You can also consider applying for a small business grant to help you get started.
Small businesses in Canada have to pay federal taxes, and in most cases, must also collect and remit goods and services tax (GST) or harmonized sales tax (HST). There are also specific provincial or territorial licensing rules and guidelines you should become familiar with depending on your location. Find your specific regional information by Googling “small business regulations" and your home province or territory.
Your business number identifies your business to your customers and the government. It's used in much the same way as your social insurance number.
While solopreneurs can initially operate without a business number, you will need one to access a Canada Revenue Agency (CRA) program account, to collect GST/HST, or if you decide to incorporate.
Smaller businesses earning less than $30,000 in revenue don't have to charge tax, but having a business number is as much about your legitimacy as a business as it is about paying taxes. It's a good idea to register for a business number before you need one for this reason. Clients know your business isn't just a side hobby when you have a business number.
When you work for an employer, they take care of your tax deductions automatically. But when you work for yourself, that falls on you.
As a solopreneur, you'll have to save for and pay your taxes yourself. A good practice is to put aside around 25 to 30% of your earned income into a separate savings account to cover your self-employment taxes. This does not include your GST/HST payment, which should have its own account where you automatically put the money received aside. You'll also want to lower your tax bill by taking advantage of tax-sheltered accounts like RRSPs and TFSAs, and by claiming expenses.
You can also avoid wrestling with a shoebox full of receipts at tax time by doing your bookkeeping—a simple accounting of income and expenses—monthly. QuickBooks bookkeeping software will help keep you on track.
If you file your taxes yourself, you'll need to fill out a T1 General form, along with a T-2125 Statement of Business or Professional Activities. If you collect GST/HST, you'll need to submit a separate return—but accounting software like QuickBooks will walk you through the process, helping to make filing your small business taxes simple.
When starting a business, it's easy to overlook day-to-day administrative tasks, but they are crucial to success.
To stay on top of things, create an invoice template that includes your business number and payment terms, including any penalties for late payments. You should also determine where and how you want to bank. While a business bank account isn't mandatory, separating your personal and business finances will make your life easier. To keep work expenses separate from personal ones, you can also consider using a business credit card.
Finally, don't forget to set up a website and Google Business profile so your customers can find you online.
Finding your audience is the final step, but it's also the most important. You need to attract loyal customers to run a successful business.
Now that you have your idea and business plan, it’s time to build your brand. The biggest part of brand building is thinking of ways to attract customers. An effective marketing strategy will rely on various online channels—including websites, social media, and email.
However, as a solopreneur, it’s also important to remember that you are your brand. How you present yourself and the experience you provide to clients will factor into your branding.
There are many ways to market your services—you can try traditional mailers and Google ads to reach a variety of demographics. But the easiest way to begin is with your inner circle. Ask family and friends for feedback on your elevator pitch, and see if they know anyone looking for the product or services you provide. Word-of-mouth recommendations are the fastest way to build a base of reliable clients and customers.
Once you've pursued those leads, it's time to brush up on your networking skills. Go to conferences and join professional organizations. Get active online and on social media, especially in forums relevant to your business. Consider writing guest blogs to introduce your services to new audiences while building SEO power.
Last but not least, ask happy clients to review you. Reviews can give your business extra credibility, as new customers are more likely to trust a business that others already trust.
There's a lot to think about when you set up a business. Self-employed and solopreneurs may go it alone, but the journey shouldn't feel lonely. Add QuickBooks Online to your team to help you track income and expenses, identify deductions, and file your returns.
As your company starts growing, take breaks to see how your business is doing. You’ll want to take the time to review your progress.
Ask yourself these questions to gauge how you’re doing—and answer them honestly:
Focus on areas where you’re underperforming and double down on what’s working. Monitoring and learning from what’s working (or not) in your business will help you grow sustainably.
As a solopreneur, it's important to stay flexible. You’ll want to adapt or pivot to address challenges and opportunities. You don’t have to stick to your initial business plan. If you need to adjust your vision to accommodate growth, do it.
When it comes to staying flexible, here are some tips:
Staying flexible is an essential part of being a successful solopreneur. One way to help you remain agile in the startup world is to embrace technology—in particular, leverage it to help you automate and outsource tasks you don’t love.
When going at it alone, you’ll want to set up systems and procedures that allow you to get the most done in the least amount of time. Find ways to offload repetitive and time-consuming tasks.
Some easy ways to automate and outsource processes in your business include:
That last tip is an easy way to put many repetitive tasks on autopilot, such as payment processing, invoicing, and cash flow management.
Automating your solopreneurship is a great way to save time and improve your productivity. This way, you can free up your time and focus on the things you enjoy about your business.
Pursuing a solopreneurship can be thrilling and overwhelming at the same time. Here are some traits that many successful solopreneurs have or develop:
The business world is constantly changing, so solopreneurs need to be adaptable. Having or developing the above traits are key steps in a successful road to solopreneurship.
You can start a solopreneur business in just about any industry. Here are some of the most common solopreneur ideas:
Solopreneurs can work in a variety of industries, from consulting and professional services to product sales.
If you're willing to put in the hard work, solopreneurship can be a gratifying experience. You will have the opportunity to be your own boss, set your own goals, and work on projects that you are passionate about.
There are shortcuts to reducing the hard work, however. Start by automating as much as you can. Take advantage of accounting solutions like QuickBooks to streamline your finances.
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