More and more people are dropping out of the traditional workforce to go it alone, start a solopreneur business and become their own boss. But before we dive into the ins and outs of starting your solopreneur business, let's first cover the basics.
What Is a Solopreneur?
A solopreneur is a person who sets up and runs a business on their own. A combination of the words "solo" and "entrepreneur," a solopreneur is someone who prefers to work alone, without an office, and without any employees.
Starting a Solopreneur Business in 9 Steps
Below we’ve outlined all the steps you will need to follow in this proven guide to starting a solopreneur business.
In each of these sections, we will not only provide a list of steps for you to follow but we also have included links to tools and resources that will be helpful as you progress through your solopreneur journey.
1. Choose Your Solopreneur Business Idea
Some solopreneurs set out with an idea already fully formed, while others just have an inkling. Still, others see a wide-open market and seek to capitalize on a well-positioned business idea that meets the times.
Whatever stage of the process you’re in, we have some tips to help you find that perfect solopreneur business idea that will make it all worthwhile.
First, find the perfect balance of skills, experience, and passion. Ask yourself what you are passionate about because, obviously, that will be an important factor in the type of solopreneur business you pursue. But you will also need to find a business idea that leverages your specific skill set and experience.
Then, you'll need to evaluate your work-life balance. Make sure the type of business idea you choose will be compatible with your lifestyle.
Do you envision yourself having a great work-life balance in your solopreneur days? Then you might want to avoid a business idea that will require more than 60 hours of work a week.
Do you need to balance other responsibilities along with your solopreneur business? Find one that can be accomplished in the hours you are available for it.
Finally, flesh out your business idea.While you’re in the idea-finding phase, it’s important to work at finding the right match. Set up a weekly schedule that includes time blocked off for working consistently on finding your business idea and fleshing it out.
What Businesses Are in High Demand Right Now?
If you're still feeling stumped after these three steps or need some ideas to jump-start your search, try the following four super-hot solopreneur ideas on for size.
Car wash services:NerdWallet pegs car wash services as one of the most profitable small business ideas in 2022. The car wash market is projected by many experts to grow to $20.7 billion in 2028 (from $14.7 billion in 2021). If you love cars, try offering your services as a traveling auto detailer and get in on all of this predicted growth.
Personal trainer: Personal training is extremely hot for 2022. With people returning to group fitness classes after the pandemic, it is the perfect time to strike out on your own as a solopreneur personal trainer. The U.S. Bureau of Labor Statistics predicts that the market for fitness trainers will grow 39 percent between 2020 and 2030.
Online education: The demand for virtual courses, workshops and webinars has never been higher. People everywhere have shifted to a remote work lifestyle and that shift is also making it easier than ever to access a wider audience to share your knowledge and expertise. Consider opening a solopreneur business that hosts Zoom workshops, offers Facebook live classes or provides downloadable courses in your area of expertise.
Additional Solopreneur Business Idea Tools + Resources
Contrary to what many people believe, your business plan does not need to be a super formal document. A good business plan will be a roadmap for how to start and manage your business, however that looks for you. A solid business plan can also be used to apply for funding from grants or investors.
Research shows that having a business plan makes startups 16% more likely to succeed. So, even though it doesn’t have to be formal, it should still be comprehensive and well thought out.
Template for Your Business Plan
Your business plan should include the following sections:
Marketing and Sales
As a general rule of thumb, you do not want to spend more than three months on your business plan. If you spend any longer than that, the exercise can begin to get in the way of actually starting your business. Allot a specific amount of time to complete your business plan, and if you don’t have it perfectly complete by the end of that timeframe, put it away and get to work!
Choosing your business entity type will be one of the most significant steps you can take toward getting your solopreneur business up and running. This simple step is often overlooked, but it can make a world of difference down the line when tax season comes around or if you ever face liability.
Choosing an official business structure may sound like a formal step for a big company with many employees, but it’s important for any startup, even a solopreneur business, side hustle, or freelance gig.
You will be choosing between registering your business as the following entities:
In general, most solopreneur businesses will consider registering as an LLC (Limited Liability Company) or a nonprofit. If you do not register your business as an entity, it will be considered a sole proprietorship by default.
It is important not to get confused between the terms solopreneur and sole proprietorship. Just because you are working solo does not mean you have to operate as a sole proprietorship. In fact, in many cases, it is not recommended to operate as a sole proprietorship as a solopreneur. That is because when you operate as a sole proprietor, you do not have personal liability protection.
So, if your business runs into any legal issues down the line, you may be held personally liable. Registering your solopreneur business as one of the business entities above may also come with significant tax advantages for you.
You’ve got your business idea, business plan, and the business entity chosen. Now it’s time to build your brand, which begins with a strong business name. Choosing a short, distinctive name can create excitement around your products and services. Plus, it will inform the brand you build as a solopreneur, building loyalty among your customers. Needless to say, finding the right business name is a crucial step in starting your solopreneur business.
Follow these simple steps to find the best business name for your solopreneur business:
Get input and feedback.
Use a business name generator.
Consider choosing a DBA.
Make sure your business name is available in your state.
And now, you have a business name to take your solopreneur business out there to the market!
As a business owner, you are responsible for making sure your business has the permits and licenses needed to operate legally. Start by researching the nearest Small Business Development Center (SBDC) to see what sort of zoning and operating laws pertain to your business.
Ensuring you're compliant with business license regulations helps your business run smoothly and avoids any issues with government agencies.
Now that you have a snazzy business name, it’s time to put that name out there and build your solopreneur business website.
Pro Tip: As soon as you decide on your business name, register your domain name to make sure you have a web presence that corresponds with the business name.
Many solopreneurs with little to no web design experience believe they need to hire a web designer to build their website for them. While it is perfectly acceptable to seek an expert’s help, you might be surprised at what you can do on your own.
There are a plethora of website design services that allow even the most inexperienced web designers to create beautiful, professional websites for their startups. These services will meet the needs of 90 percent of small business owners.
Wix, Weebly, and WordPress are three of the most popular website design services, but in a few hours of online research, you will see that the options for website design services are seemingly endless.
Follow these three golden rules when it comes to designing a website for your solopreneur business:
Consider your audience.
Keep it simple.
Once your site is live, be sure to keep it updated with fresh content and information to keep your customers coming back to the site. Whether you are selling a product or a service, retention is key. Give your customers a reason to come back to your business and website.
If you registered your business as an entity, then you will need to get an EIN. (If you do not register as an entity and choose to operate as a sole proprietor, then you do not need an EIN.)
An EIN is like the Social Security number for your business, and it will be used to administer your business taxes and possibly to help you sign up for a business bank account. You can get your EIN by filing a Form SS-4 with the IRS, applying online at IRS.gov, or with Incfile’s EIN service.
If you chose to register your solopreneur business as an LLC, you’ve already taken a step toward protecting yourself from liability. Now it’s time for you to protect your business, too. Many solopreneurs will purchase business insurance and find legal protection to help avoid problems down the line.
Business insurance can protect you and save you from spending a lot of money if something goes wrong. Solopreneurs can benefit from a policy that protects them from errors and omissions and a policy with cyber protection.
Hiring an attorney to represent your business as you start out is a good idea. The attorney can build contracts for your business to add a layer of protection and also to make it easy to acquire clients if you have a service-based business. If you have a product-based solopreneur business, then your attorney can work with you on the necessary disclaimers to help protect you and your business.
Just because you’re operating solo doesn’t mean you can’t hire an accountant or a bookkeeper to help manage your finances. Many solopreneurs hire contractors, especially in the financial management field, to help run their businesses.
Whether you’ll be hiring some help or managing your finances alone, it’s important to start with solid financial software. Xero, Freshbooks, and QuickBooks are three of the leading financial management software for businesses. These programs can help you keep your business expenses organized. Never mix your personal and business finances.
You will also need to keep on top of your business taxes, and a CPA can help you with that. You will want to max out all allowable tax deductions, never paying more than you have to. That is why having the expert guidance of a CPA can help. One of the most important parts of your small business taxes will be filing your Schedule C form. This common small business tax form is used to report income or loss. It should be filed along with your form 1040.
Now that’s not the end of the road on your journey to becoming a solopreneur, but it’s a good start! By following these steps, you will have officially started your solopreneur business and be set up for success. Now it is up to you to run your business well, build your brand and market it. Enjoy your new title of solopreneur!
While you’re getting started on this exciting journey, keep Incfile’s handy Start a Business Checklist accessible to ensure you don’t miss anything along the way.
Nicole Bowman is a freelance writer who thinks turning research into stories is the best gig ever. She started writing billboards back in 2002, worked in book publishing in New York for many years and now she creates all sorts of engaging content for the web. Nicole lives in Rehoboth Beach, DE, with her husband, two sons and their poodle, Tootsie. She loves the great outdoors, bookstores and tennis.