Everyone related or unrelated to the business field knows what the word 'entrepreneur' is. However, not many people understand what 'solopreneurs' are, especially if they are unrelated to the business field.
Here's giving some critical differences between solopreneurs and entrepreneurs to help you understand them better.
Solopreneurs don't hire W-2 employees.
Hiring W-2 employees come with so many liabilities like insurance, payroll, payroll taxes, and many other factors that involve lots of money expenditure. Therefore, solopreneurs prefer to hire freelancers and independent contractors to outsource tasks that can take much of their time.
Solopreneurs are the only actual employee of their business.
Entrepreneurs hire employees
Entrepreneurs work with a team and hire employees. They have workers under them to help them perform various business tasks. Most solopreneurs eventually turn to be entrepreneurs once their business becomes established because running a smooth and well-off business requires a village.
Whether you're a solopreneur or an entrepreneur, financial management is the key to moving forward.
Entrepreneurs usually register their businesses as limited companies or corporations. Therefore, they are liable to pay their employees salaries, benefits, and taxes.
On the contrary, solopreneurs usually register their business as sole-proprietorship or single-member LLC. Naturally, they have low financial obligations than entrepreneurs, and financial management is also quite simple.
The main aim of entrepreneurs is to start a business that can eventually make money or run smoothly without their direct involvement.
On the contrary, solopreneurs start a business to run it by themselves. Their primary focus is to keep business manageable.
Solopreneurs works on the business by keeping their financial liabilities minimal, and therefore the risk of money loss is not so much. On the other hand, entrepreneurs can suffer a substantial financial blow if their business fails to grow.
Assume a business has ten workers or employees, and each employee is paid around $20000 annually. If a business somehow fails to thrive, the owner still has to pay a $200000 salary.