The goal of just about every business is to grow. Growth usually includes, partners, full time employees, and other lines of business. However, there are many, many other benefits of growing your company on your own.
I was recently in a mastermind meeting with some fellow entrepreneurs. One of the men in our group is a fellow owner of a tech startup who develops web application for businesses. He was talking about a client that sought him out to provide a solution for their business. The initial meeting went well but then the client told him that he had to have several meetings with his business partners to decide if they are going to go forward.
I said, “Uh oh, they’re in ‘that’ phase.” We all had a good laugh.
The reason we thought it was humorous was because we all know that feeling of wanting to start or grow a successful business but needing other people’s approval first.
That part about being a team sucks. But now that I run my business as Owner and CEO, if I conference with anyone about the direction of my company, it is by choice.
As a Solopreneur, you will have full control over different aspects of the business.There is no need to consult other directors or anyone else before making a decision in your business when you are the boss. This will also limit your chances of compromising with your decisions simply because some of your directors are not comfortable.
1. Easy and Quick to Start
Starting a business with your friends or any other person can be very difficult. You have to sit down and discuss various issues before making any move. This is not the case when you run the business as an individual. There is no need to move up and down all in the name of registering your business with the necessary legal authorities.
However, you will be required to inform the local government about your intentions as well as obtain a license that will allow you to continue with your daily operations legally. Large businesses usually require the services of a lawyer to get going. Solopreneurs can get away with using a service like Incfile.com that will charge $50 to take care of your legal paperwork for you.
You could literally have a business idea and be in business in a few days. Can’t get any quicker than that.
Related article: 7 Online Tools Every Entrepreneur Needs to Operate a New Startup.
2. Closer Customer Connection and Loyalty
Smaller companies usually have a better reputation of addressing customer issues than their larger counterparts. Being a soloentrepreneur allows you to be closer to your customer which in turn creates great customer loyalty.
Being closer to your customer makes it easy to respond to the needs of customers in the best manner possible. Timely respond to complaints made by your customers increases the chances of retaining them as well as attracting new customers. On the other hand, companies take time to address concerns made by their customers.
3. Low Startup Cost
If you wanted to sell (or resell) products to the general public 20 years ago, you used to have to open a physical store. That would mean a cost for buying the products, store rental cost, shelves cost, cash registers, the list goes on. These days, you can sign up with Shopify for about $30 and set up an online store to sell whatever you want.
Capital required to start a sole business is less compared to a large company. Some of the common costs that a multi person business include equipment, training, insurance, facility rental etc. The average overall cost of a new business according to sba.gov is $30,000. Do you have that lying around?
Conversely, a soloentreprneur, part-time or freelancing business can begin for as little as $100. Some businesses can start with nothing. Beware however, there is a correlation between a low barrier of entry and high failure rates for some businesses. Since the cost of starting of business is so low, some solopreneurs don’t take it as serious as someone who invested their life savings. You still have to run your business like you’ve invested $100,000 if you want to be successful.
4. Easy Accounting
The processing of accounting for funds within the business is easier when you are running the operations solely. There is no need to have formal corporation tax returns or Annual Accounts. You can keep your financial records in any manner as long as it suits your needs.
In addition, it is not mandatory to submit details of the amount of profit you have been making for the past months to anyone for auditing purposes. You basically handle all your accounts without external interference from another party.
I recommend the book “Small Time Operator: How to Start Your Own Business, Keep Your Books, Pay Your Taxes, and Stay Out of Trouble“. It is perfect for someone who doesn’t know anything about accounting but is running a small business.
5. Demand For Your Services is Growing
Many solopreneurs are freelancers which makes their services highly sought after. A 2014 Oxford Economics survey commissioned by SAP, 83% of executives planned on using freelancers over the next 3 years. That’s most likely you. With more specialized services and businesses being developed, specialized services are also required.
6. Tax allowance on assets and expenses
Tax allowances on expenses and assets is yet another benefit of becoming an entrepreneur. You can claim for capital allowance when purchasing different equipment such as IT equipment tools, vehicles or pieces of furniture in your business. In simple terms, you can to save some extra money by taking advantage of tax allowances offered at different levels.
7. No Salary Cap
Companies make a lot of profit when compared to sole proprietors. However, the huge sums of profit generated by companies are divided among the different shareholders of the company. This leaves each member with very little amount to take home.
A Solopreneur retains the entire profit his or her business will make within a particular financial period. A good number of entrepreneurs who own business on their own do not like the idea of employing huge numbers of people in their investment. This makes them to incur less costs while at the same time maximizing on the amount of profits they generate from the same.
In addition to profit retention, this individuals can also retain their personal assets that were being used in the daily operations of the business. The profit retained by the business can be used to open other business ventures or any other purpose depending on the Solopreneur.
8. Flexibility (Business to Career and Back)
You may be someone who is still working a job while working on their business. It’s ok, many solopreneurs started out working on their businesses part-time. They tested the waters of entrepreneurship before jumping in full time into their business. Sometimes it works out, sometimes it doesn’t.
But let’s say your business venture doesn’t work out. As a solopreneur, you can easily slip back into the workforce and restart your career or just to buy yourself some more time to grow the business.
If you have co-founders and shareholders to be accountable to, slipping in and out of a job is not possible.
The Solopreneur has the opportunity to taste the waters before making any decision. This makes them able to avoid any unnecessary risks that they are likely to encounter in the process of venturing into the new business.
For me, I cannot even imagine going back to corporate life. But if you are the type that likes the flexibility, it’s better to be a solopreneur. See my thoughts below…
Privacy is an issue of great concern when running any type of business. Keeping information secret in a limited company is not an easy task. Shareholders, creditors and other parties would want to know more about your profit, capital, expenses and other business activities. If privacy is a big issue on your side, then you need to start and run a business yourself.
A solopreneur can keep information about how much money he or she makes from the business for years without the knowledge of others (besides the IRS). In addition, she or he can handle any issues facing the business in secrecy thus maintaining the confidence of both the loyal and potential customers.
10. Lifestyle Freedom
C’mon admit it, this is your favorite of all of the reasons. It’s pretty sweet to work for yourself and create your own hours. That means the 40 hour work week is yours to design if you so choose. Or not choose, for that matter.
You can work three 12 hour days, five 10 hour days or four 1 hour days. Its completely up to you and the type of business you operate. And now with technology, you can work from anywhere. One of the best things I’ve found about having lifestyle freedom as a solo, your free time is just as important as your work time.
Your life and your work become one. Which is a wonderful thing. Especially if you love your work.
The next time that you are tempted to envision yourself as an entrepreneur that runs a global empire, keep in mind the benefits keeping things small and close to home. You don’t need shareholder accountability or billions of dollars to be a successful entrepreneur. You just yourself, your talent, and drive. In the end, it’s all about what makes you happy.