This is part four of our four-part series on quitting your job. We saved the best for last. Is being your own boss the right move for you? Let’s explore the options. Since it’s year-end, it can be food for thought for the New Year.
In our 4-part series, we have explored:
- Sticking with an undesirable job vs. jumping on the Great Resignation bandwagon
- Nontraditional employment like gig work, freelancers, and side-hustles
- The Solo Ager and the consequences of not having a retirement plan
Let’s cover the plights and pleasures of solopreneurship with this illustration (in bold type).
Sam loved yoga; she had been studying it for years. She gave 1:1 instruction to her friends via Zoom. They thought she was a brilliant instructor and encouraged her to become an online instructor. Sam was unhappy at work; she wanted to be her own boss. She decided to hang out her virtual shingle as an online yoga instructor. She became a solopreneur because she heard many amazing stories about one-person businesses.
Of the different types of businesses, solopreneurs are most likely to fail. It isn’t easy to run a business on your own, hold responsibility for every task, and complete enough work to pay your bills and grow the business. Competition is fierce running a business as an individual for three reasons:
1) you need no expertise
2) the cost of entry can be non-existent
3) virtually anyone can claim to be a business owner
When Sam ran out of friends and family willing to pay $150/hour for a yoga session, she began to struggle. Without a network, she found it difficult to find paying customers. She started experiencing the typical challenges of running a small business.
The WordPress site she put together on her own started getting hacked. She tried building her presence on social media but failed. Sam was a free spirit. She went into business because she didn’t like being bogged down by the mundane. Sam really didn’t have a business, marketing, or financial plan. All Sam wanted was to make money doing something she loved. Sam was frustrated because her endeavor wasn’t working.
Where did Sam come up with the arbitrary $150/hour payment? Did she come up with that number because she needed to pay her bills, or was it a fair price that the market would bear? Did she research what her competitors charged?
Sam’s first love is yoga. But she’s attempting to be a web designer, accountant, marketer, social media manager, and everything else. It’s a recipe for disaster and burnout.
Sam was desperate for money, so she started dropping prices, hoping it would bring in revenue. As she started researching her competitors, she started pricing her services drastically lower than her competitors. In a few weeks, her competitors started dropping their prices as well.
This is one of the dangers when people start a company with no business acumen. This sets up everyone involved to fail. Let’s look at some of the fallacies:
- Sam is going into business for herself; she wants to be the boss; she needs to use her passion to earn money
- She is not the boss, her customers are, and if she can’t please them, she’s out of business
- Sam’s first objective is to serve her community, not pay her bills
- Sam cannot serve her community if she doesn’t know who they are
- You cannot run a business without a plan
- 41% of businesses do not have a plan
- Businesses with a plan grow 30% faster than ones that don’t
- A plan gives you a path to follow when times get tough. It can stop you from making emotional decisions.
Sam dropped her prices because she was desperate; nothing clouds the judgment quite as fast as desperation. Sam devalued herself, her services, and her community. In a race to keep up with her, her competitors also lowered their prices. All these “business owners” put themselves in a no-win scenario called The Race to the Bottom.
Sam started to run out of money, so she found a day job. She could learn to run a business and succeed at her online endeavor without the added pressure of lack of funds.
She started by asking herself why she was interested in yoga. Sam was in her 50s when she started having back trouble. She found her niche and her community, and it opened new opportunities. Sam used her passion for yoga to help women looking for a natural remedy for back and joint pain. She changed her business from a 1:1 service to offering yoga instruction (a product) on a learning platform. She learned to connect with her community through email, a newsletter, and a weekly podcast.
As she earned money, she invested it back into her business. She found contractors to help her grow her business. She worked on what she loved, creating more yoga videos per her customers’ requests. Sam hired contractors to help with other aspects of her business as needed.
According to Harvard Business Review, the purpose of a business is “to make a profit so that the business can do something more or better. A good business is a community with a purpose.” Does solopreneurship fit that definition of a business?
You cannot grow by being an island to yourself. It doesn’t work in your personal life and will not work as a business owner. When running a business, involvement in your community is imperative. In other words, finding your tribe, finding out how you fit in, and finding a way to help that community thrive is the basis of a business.
Let’s look at the digitally native brand Warby and Parker. This eyeglass brand was born and raised online. However, they expanded as far as they could online. When they asked their community what was missing, they answered brick-and-mortar stores. This year, to serve their community, they have opened 200 stores.
If we look at Sam’s story, this type of expansion is available for her. There are many opportunities open for her:
- Create and sell books about yoga or meditation
- Selling yoga equipment and clothing
- Selling yoga print-on-demand items
- Meditation courses and webinars
Sam could open a brick-and-mortar yoga studio or a chain of studios. The possibilities are endless. Open your mind to new opportunities.
You may think, “Hey, you’re raining on my solopreneur parade.” This is The Savvy Solo; we love nothing more than to see the solo community succeed. However, to be savvy, you must know when it’s best to stand on your own or seek assistance.
While running your solo business, have you ever had…
- A plumber work on a leaky pipe
- Someone do your taxes
- A tech fix your computer
- A relative write an article for your website
Congratulations, you’re an entrepreneur. If you ever had someone assist you with a task while you continued to work on your business, that’s entrepreneurship.
The definition of entrepreneur is creating a new business or organizing limited resources to capitalize on a business opportunity. There’s a fine line between solo- and entrepreneurship; solopreneurs would probably be described as a Lifestyle Entrepreneur.
How to succeed as a solopreneur
- Treat your business like a business if you expect to get paid
- Have a plan and know your end goal
- Know your community and how you will serve it
- Bring your problem-solving skills and patience
- Delegate tasks as soon as you can afford to
- Automate as much of your business as possible
- Never rely on just a service – find an evergreen product you can promote that compliments your service
Lastly, eat your elephant one bite at a time. Make a New Year’s resolution to work on your business in just 10 minutes a day. Ten minutes can be the difference between learning, thriving, and earning more. Or you can do nothing and continue to struggle and make more sacrifices to survive on your shrinking paycheck. The next move is yours.