With a thriving gig economy, more people are making the leap from just a side hustle to becoming a full-fledged solo entrepreneur, or solopreneur if you’re nasty.
According to MBO Partners State of Independence in America 2019, over 41 million Americans are engaged in some form of working for themselves. And while this report has a funny way of defining what “full time” is (quote: “Full-Time Independents—those working more than 15 hours each week”), it showed that more people each year, especially Millennials, are unshackling themselves from the corporate ladder.
The US Small Business Administration echoes these findings, but also provides additional insight into just how popular sole proprietor businesses are, accounting for over 86% of all small businesses. The answer to the question of “should I go it alone” is overwhelmingly yes, and this trend shows no sign of slowing.
But is solopreneurship really as good as your candle-making aunt makes it sound? There are both pros and cons to going it alone, so let’s dive into some of them that you might not have considered when dreaming up this future from your cubicle.
The Pros of Being a Solopreneur (AKA Everything Your Heart Already Knows)
Being a solo entrepreneur is often a coveted lifestyle. It’s freedom. It’s self-empowering. It’s a great excuse to stay in pajamas and write off coffee on your taxes. But there are benefits that you might not have even considered yet.
You’ll Live Longer and Happier (Probably)
Despite the anecdotal stories (ie. truisms) of long nights and stressful days, a 2009 study of entrepreneurs showed that those who own their own business were expected to live longer than non-entrepreneurs. The study showed that entrepreneurs made healthier lifestyle choices (eg. more exercise), and it could be because of the flexibility in work schedule that allows for this benefit. After all, even if you’re working 14 hours days, you can still choose to take a gym break at different times throughout the week to always work it into your schedule.
Not only that, you’ll probably think you’re happier, to go along with those extra years. As shown in the MBO survey cited earlier, 82% of Full-Time Independents self-reported they were happier working on their own, and 69% agreed it was also better for their health. In essence, it’s not a cage if you don’t think it is. Yes you might be doing the same amount of, or even more, work as you would have done as a cog; but perception is everything.
You’re Not Financially Responsible for Any Partners
Just like in marriages, the number one problem is equity… in every sense of the word. And in a business partnership, feelings of unfairness in workload, input, and ownership always boil down to compensation. An equal partnership between two people has been viewed as an unstable relationship, and it usually necessitates a third party to resolve issues. But now, all of a sudden you have more partners than cashflow to sustain them. Solopreneurship takes all that financial burden that can devastate the survival of a company off the table completely.
Sure you’ll still have vendors and contractors to pay out, but dealing with invoices for services rendered is a completely different financial obligation compared to spliting all assets with your increasingly distant business partner.
No More “What If?”
Starting your own business is a dream of many, and even if it fails, it’s usually better to have tried than to have never tried at all. Yes, there are plenty of people who hated being an entrepreneur and vowed to never try it again; but at least they know. And knowing you didn’t like something for sure is a closed door, unlike the endless What Ifs that are uncertainties. Humans cope better with bad news than uncertainty after all, and thus the regret of never trying can be greater than the regret of failing.
So many opportunities
We’re in an incredibly exciting time for solopreneurs, having so many powerful and low-cost tools in place; from building websites to running virtual storefronts, individuals are more empowered than ever to pursue their passions and grand ideas. From the comfort of a cafe, people can run a blog with affiliate programs like Amazon Affiliates or Travelpayouts to earn a living just by writing about things they like. You can be a photographer or start your small event agency. Annie Pilon from Small Business Trends has brought together 50 ideas for solo entrepreneurs.
The Cons of Being a Solopreneur
Of course, not everything in solo startup world is profits and private bathrooms. There are plenty of downsides to going it alone.
You’re Forced to Spend Time on Uninteresting Things
No matter how exciting your new solo business venture is, you’ll inevitably have to spend more time than you want on aspects that bore you. Maybe you do like the accounting, but will you like the customer service questions? Maybe you enjoy managing inventory, but will you enjoy managing the speed of a mobile website? Even if you outsource parts of your business, you are where the buck stops and everything takes just a little more time than you’d like, especially when it’s the stuff you don’t want to ever deal with.
Recessions are Scarier
Even though recessions spark solopreneurship, once you’ve got a business running, the whiff of a recession can send a shiver down your wallet much more than working as an employee of a larger company. While layoffs can be a reality for any employee, the demise of your whole business is a completely different worry. With many economists saying the next recession is just around the corner, solopreneurs should be investing wisely both personally and in the business itself to weather the storm.
Business FOMO (Fear Of Missing Out)
“Working too much” is a constant reality for those who own their own business, but the real downside is the constant sense of Business FOMO. Will this extra vacation day cost me a sale? Will unplugging for the weekend cost me a vendor relationship? Could I make more profit if I just stay up for one more hour at night, even though it’s 3am? The Business FOMO can drive you nuts, and it’s a real trick to self-manage into letting go of imagined opportunities.
When You’re Sick, the Business is Sick
McDonald’s doesn’t get a cold and shut down, but Your Business-dot-com can and probably will. It’s frustrating to get sick when you’re an employee, but can be hugely disruptive when you’re your own boss with no paid sick days. Until you’re established (and honestly, when you’re no longer a solopreneur), when you stop working so does your company. And this is just a catch-all; “sickness” can be from illness, accidents, family issues, and mental health. Which leads us to…
Solopreneurship Can Be Bad for Mental Health
Isolation in the workplace is already a major contributor to mental health issues for employees, let alone working completely alone at your own business. In fact, entrepreneurs are 50% more likely to report having a mental health condition than normal employees, with twice as much instances of depression. Yes, this doesn’t seem to completely jive with the numbers of happy solopreneurs cited earlier in this article, but keep in mind that you can still be happy to be self-employed even while you grapple with mental health issues. Nevertheless, the isolation of working alone is a serious consideration for those thinking about taking the plunge.
Solopreneurship can be a hugely rewarding lifestyle, but there are definitely risks and downsides to consider. What is your tolerance for the downsides of working for yourself? Sound off in the comments below!