Your first decision as a self-employed person is whether to be an entrepreneur, a side-hustler or a solopreneur.
Entrepreneurs and side hustlers have woven themselves into our economy. We all know that entrepreneurs are like inventors. By solving classic problems in a new way they up-end industries and sometimes become very rich. Side hustlers already have a job. They take extra gigs to supplement their primary income. But a great middle-ground between these two options is solopreneurship.
What distinguishes solopreneurs from entrepreneurs and side-hustlers is their goal of financial self-sufficiency. They're not into growth for growth’s sake (like the entrepreneur) or just putting a little extra in her purse by joining an MLM (side-hustle). While many start out as side-hustlers, solopreneurs aim to support themselves entirely through their business. This is a great path for anyone from content creators, coaches, fashion designers, accountants, to insurance agents.
If you want to take your shot as a solopreneur, you can expect to go through four stages on your way to self-sufficiency.
4 stages to becoming a self-sustaining solopreneur
The first stage is the Dreamer. You may be unhappy with your current job and wondering if you should go out on your own. Maybe you already have an idea which you think will work. Maybe you don’t. You do some research, talk to friends, start getting more specific about your goals. At this stage it’s important to push past your fear of the unknown and keep going. Plan to keep working or live off of savings during this stage since you won’t be making any money yet.
Your mind is doing a lot of chattering.
“Who am I to think I could succeed on my own?”
“Who would pay me to do what I love to do?”
First off, you don’t need to have everything figured out at this stage. Nobody is expected to have a 10-point plan mapped out in the beginning. Embrace the dreamer’s mindset but don’t get stuck there. Explore the possibilities. Talk to people in your line of work about your ideas. Join groups focused on your areas of interest.
Next, move into the strategy mode by identifying precisely what it is you want this business to do for you. If your goal is to support yourself entirely through this business you’ll need to know how much you need to earn per week, per month and per year. This will help you define your financial goals and what you’ll need to do in order to achieve them.
Not sure how you can make more money? Watch this webinar on the 7 Ways to Increase Your Income.
The second stage is the Toe-Dipper. Even if you’ve started to make some money, you haven’t begun to pay yourself. Chances are, you’ll be unprofitable or, best-case scenario, at a break-even point. Even if you’ve made money, you’ll have to withhold some of it for taxes. At this stage, it’s normal to worry about what others will think. You can get caught up in non-productive spirals of activity that are premature for where you are in your business journey.
So instead of paying for expensive websites, coaching or marketing tools, drill down on what you want to accomplish with your business. Resist the urge to do a bunch of busy work and focus on your target customer. What is that they want and need and how can you give it to them? Focus on who can you serve most quickly and profitably as you get your business off the ground.
I’m a big fan of pilot programs, special deals for friends and family, and unique packages to test your business, generate some cash, and learn from your direct experience.
Talk to target customers about their needs and pain points. From here you’ll create a tailored proof of concept. Then, get to work helping your potential customers with these problems. No course or tool kit can compare to scoring some actual experience and early wins for your target customer. Combat any doubts or insecurity by focusing on how you can be of service. Enjoy the fact that you are helping others.
Many get stuck in this phase because they haven’t put enough effort on critical thinking and strategy. That’s why I created the Business Action Plan Challenge which kicks off Wednesday Jan. 13th. Please join me and fellow solopreneurs by registering here for the Challenge.
By the time you reach the third stage, you’re actually making a profit from your business. You may be paying yourself $500/week or a few thousand a month. Although you may be just getting by financially, you’re working a lot. Like, too much. You may be stressed, overwhelmed and worried that things will fall apart. But you have to carry on to keep the revenue coming in. You don’t know how to scale, delegate or lead. Although you have a business you may not have actually mapped out a process to help you save time.
This is where time management, consistency, prioritization and delegation make all the difference. At this stage, you need to prioritize your time over revenue. Every hour you spend as a builder has to drive a return. You’ll need to track the different steps of your process and sales in order to see where you can improve.
This stage can be a bit daunting in terms of where to focus and how to stay organized. That’s why I am inviting those of you in the Builder stage to join me for the upcoming Business Action Plan Challenge. I’ll help you plan your next steps so you can stay organized and on-track.
Once you’ve mastered time-management, process and tracking you’ll reach the fourth stage (Sustainer.) By now, you’re fully supporting your needs and wants with your business revenue. You’ve made it! But...worry and boredom can creep in. Maybe you worry you can’t keep up with the grind. Or you start to resent your customers, your work, or your schedule.
Now is time for a reset. Do you want to exit the business, redefine it or cash out? Think about where you want it to be 1 to 5 years down the road. Rededicate yourself to the service aspect of your business, perhaps with a new product idea or serving a new kind of audience. Or perhaps it’s time to dream of something bigger, helping more clients or reaching new heights, if that inspires you. Oftentimes this can lead you right back to the dreamer stage. When you stay focused on how you can best be of service you’ll always be on the right track.
As we enter the new world of 2021 now is the perfect time to carefully consider all of the different ways to be a Business of One. Becoming a solopreneur is a great way to remove the uncertainty of job security by taking the reins of your own business future.
Which stage are you in? Send us an email [email protected] to share with us which stage you’re in with your business.
#1 Entrepreneurs often have big visions. Entrepreneurs start small and eventually grow in size, complexity, number of employees, and revenue. A traditional entrepreneur is like an inventor. They are people who solve classic problems in a new way to up-end an entire industry. They often take tremendous financial or psychological risk to launch their ventures.
But, you don’t have to be a billionaire to be a successful entrepreneur. Mukami Kinothi Kimotho founded Royelles, a doll line or “avatars” of strong women who help empower girls to lead. She has employees, various teams and departments, but she’s not trying to take over the world. Sara Blakely became a billionaire after founding Spanx, a revolutionary product. Some entrepreneurs will sell their companies for large sums once they get to a certain size. Many will not.
#2 Side-Hustlers still have a day job. Side hustlers already have a job. Their side hustle supplements their primary income. Your side hustle could be anything from driving for Lyft to selling jewelry on Etsy.
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