If you have always wanted to start your own business, you will likely have researched and considered all of the different types of businesses available to you. If you are an independently-minded person who wants to make their own way in the business world, then you have probably concluded that life as a sole trader is the best choice for you.
Sole traders are, nowadays, more commonly called “solopreneurs”, but the idea is the same. You run the business by yourself, for yourself. This is one of the most common forms of business— but is it the right choice for you?
Before you commit to solopreneurship, you might want to consider the pros and cons…
PRO: You keep all the profits
The most obvious pro of life as a solopreneur is that every penny you earn is yours. You don’t have to pay dividends to your shareholders; you don’t have to split the profits with a partner— the funds are yours to use as you wish. This, arguably above any other, is the aspect that tends to most draw people towards solopreneurship.
CON: You hold all the risk
Of course, if you’re a solopreneur, everything to do with the business falls into your hands. Additionally, if you fail to separate your personal finances from the business, you could find yourself personally liable for debts the business has accrued. Good separation of business and personal finances can help to prevent this situation from occurring, but you will always bear the responsibility for all decision-making. Many people find this stressful, and dislike the fact they don’t have a partner to turn to for advice and guidance.
PRO: Outsourcing is always an option
Solopreneurship doesn’t mean you literally have to do everything for yourself. While you won’t have a business partner or staff as a solopreneur (in most cases), you can still outsource various business-related tasks to other companies. Whether it’s outsourcing your advertising needs to a reputable company or hiring assistance to meet your IT service & support needs, you’ll always be able to bring in help where you need it— and you’ll then be free to focus on the areas of the business you truly care about.
CON: Growth can be difficult
If you try to grow your business as a solopreneur, you may find that there simply aren’t enough hours in the day for everything you’re hoping to accomplish. Even with the best outsourcing in the world, growth creates so much work in terms of executive-level decision-making that you will almost certainly need help. To succeed as a solopreneur, you need to accept one of two realities: you don’t wish to expand beyond a lifestyle business, or you’re open to hiring staff or joining a partnership when the time to expand is upon you.
In conclusion
Ultimately, only you can know if solopreneurship is the right choice for you. However, by reading through the above, you can be confident that you are making an informed decision that takes account of the most important factors, which should ensure you are able to make the right decision for both you and your future business endeavors.