A solopreneur is usually (not always) a digital entrepreneur who leverages automation, work flexibility, and creativity to develop ultra-lean business models. Those can scale over the one-million-dollar revenue mark with a minimum Business overhead, no venture capital funds, and mostly bootstrapped. Those solopreneurs start by mastering profitable microniches.
Clarifying the meaning of solopreneurship
In the business world the solopreneur is seen as the small business owner that does, from A to Z, all the functions and tasks the business requires to survive.
Yet a solopreneur doesn’t necessarily do everything on her own but instead focuses on devoting the whole focus on the most critical part of the business while contracting (if necessary) the remaining portion of the company.
Where the classic start-up entrepreneur (the Silicon Valley archetype) is about building a company with the grandiose vision of an exit. Either through venture capital acquisition or an IPO.
In many cases, the solo businesses will transition toward becoming a small company (like DuckDuckGo solo-business that turned out in a profitable and successful venture-backed business).
In other cases, the solopreneur might limit the growth of the company as a choice of freedom. In short, for the solo business isn’t just about money but also about the kind of business you might want to build.
Solopreneur vs. startupper
The solopreneur approach might well be the opposite approach compared to the Silicon Valley-type serial entrepreneur, which primary aim is to build businesses that scale but that also requires a lot of maintenance and large employees’ base.
The solopreneur makes the opposite choice. Thus, let me recap in the following points how solopreneurs might differ from startuppers:
- Bootstrapping vs. funding: bootstrapping is the primary mode of growth of the solopreneur
- Passion vs. business planning: the solopreneur is often fueled and build on top of passion and choice rather than opportunity alone
- Non-linear income vs. financed and artificial growth: the solopreneur puts work in building scalable assets, due to the limitation in resources for the business, that is a key element for the success of the business
- More key customers vs. more customers: due to constraints in terms of structure, finances and time, the solopreneur has to make hard choices very early on. Thus, giving up that part of the business or those customers which are not key to its strategic long-term success
Related: What Is a Business Model? 30 Successful Types of Business Models You Need to Know
Step one: Start from a business model rather than a business plan
Rather than drafting a business plan, which is suited for those entrepreneurs looking for outside financial resources. The solopreneur has to look for simple tools to start and grow its potential business.
For the sake of it, using a business model, as a thinking tool, it can be way more effective, as in a page and in a few hours maximum, you can clear your mind.
Step two: Find your Microniche
Once found the gap in the market, it is then crucial to niche down. In other words, you have to drill into that specific segment of the market until you find a potential target audience (from a few hundred up to several thousand people), which will be your manna.
Related: Microniche: The New Standard In The Era Of Dominating Digital Tech Giants
Step three: Target Ramen Profitability
Serial entrepreneur and venture capitalist Paul Graham popularized the term “Ramen Profitability.” As he pointed out “Ramen profitable means a startup makes just enough to pay the founders’ living expenses.”
According to Tim Ferris, another way to look at it is to find a Muse by setting up in detail the TMI or target monthly income. Tim Ferris suggests thinking in detail about your monthly cash-flows.
In short, all the expenses that you are going to incur. Imagine, for instance, that you always dreamed of traveling the world. What does that mean? How many countries are you going to travel while setting-up your Muse? For how long will you stay in each country? How much would you pay off rent, travel and living expenses?
It might sound complicated at first, but once you set this up, your goals will be much clearer. In fact, Tim Ferris makes your life easier by making a great tool available: The Monthy Expense Calculator.
In short, this tool tells you line by line what expenses to take into account. After you have to divide by 30 (to get the daily budget) and add a 30% buffer (you must be ready for any emergency).
Step four: Bootstrap your way through
Related: What Is Bootstrapping? Why A Bootstrapping Business Is The Way To Go
Step five: create options to scale
The most important concept to understand is that of creating options to scale.
As you build a successful solo business you also create options to expand from a microniche to an adjacent space. You also have the option to look for a niche, before going fora whole industry.
Another option as the solo business grows the cash the business unlocks can be used to build or grow other businesses.
Bringing it all together
- Identify a microniche
- Draft a business model
- Bootstrap your way through organic growth
- Create options to scale
Read next: The Digital Entrepreneur’s Guide On How To Start A Business
The resources you need to get started with your business model:
- What Is a Business Model? 30 Successful Types of Business Models You Need to Know
- What Is a Business Model Canvas? Business Model Canvas Explained
- Blitzscaling Business Model Innovation Canvas In A Nutshell
- What Is a Value Proposition? Value Proposition Canvas Explained
- What Is a Lean Startup Canvas? Lean Startup Canvas Explained
- How to Write a One-Page Business Plan
- The Rise of the Subscription Economy
- How to Build a Great Business Plan According to Peter Thiel
- What Is The Most Profitable Business Model?
- The Era Of Paywalls: How To Build A Subscription Business For Your Media Outlet
- How To Create A Business Model
- What Is Business Model Innovation And Why It Matters
- What Is Blitzscaling And Why It Matters
- Snapshot: One Year Of “Business Model” Searches On Google In Review
- Business Model Vs Business Plan: When And How To Use Them
- The Five Key Factors That Lead To Successful Tech Startups
- Top 12 Business Ideas with Low Investment and High Profit
- Business Model Tools for Small Businesses and Startups
-
How To Use A Freemium Business Model To Scale Up Your Business
Popular case studies from the blog:
- The Power of Google Business Model in a Nutshell
- How Does Google Make Money? It’s Not Just Advertising!
- How Does DuckDuckGo Make Money? DuckDuckGo Business Model Explained
- How Amazon Makes Money: Amazon Business Model in a Nutshell
- How Does Netflix Make Money? Netflix Business Model Explained
- How Does Spotify Make Money? Spotify Business Model In A Nutshell
- The Trillion Dollar Company: Apple Business Model In A Nutshell
- DuckDuckGo: The [Former] Solopreneur That Is Beating Google at Its Game
The post Who Is A Solopreneur? Mastering The Ultra-Lean Business Model appeared first on FourWeekMBA.
