The Great Resignation may be turning into the “Great Regret” for some workers who joined the exodus, but for the Americans who have opted to become “solopreneurs,” their independence offers less risk and more security than traditional employment. Joblist’s second-quarter 2022 report found that 26% of workers who quit their previous job now regretted their decision, and 42% said their new job wasn’t meeting expectations.
By contrast, a Harvard Business Review survey of 6,240 workers, including 928 independents, found that 74% of independent workers planned to remain self-employed. A further seven out of 10 independent workers believed solopreneurship was more secure than traditional employment. For millions of Americans, the time is right to go solo.
A solopreneur is defined as an entrepreneur who doesn’t hire any W-2 employees. As the world emerged from the pandemic, many workers wanted more independence, autonomy, and work/life balance than corporate jobs offered. Lockdowns also allowed would-be solopreneurs the opportunity to learn the necessary information to start their own businesses.
As a result, there are now more solopreneurs in the U.S. than at any time since the Great Recession of 2008. About 16.8 million Americans (or 10% of the workforce) were self-employed in June, and over one-third of the expansion of the labor force between June 2020 and June 2022 was driven by independents. Solopreneurship is a growing business trend that impacts the economy and how we view work.
What Is the Solopreneurial Spirit?
The Small Business Administration reports that approximately 81% of the 32.5 million American small business owners are solopreneurs with zero paid employees, though they may hire contractors or freelancers. Solopreneurs tend to run service-based businesses such as consulting, freelancing, content creation, and web development.
The terms “solopreneurs” and “micro-entrepreneurs” can be used interchangeably, but micro-businesses can have up to nine employees. Unlike solopreneurs, entrepreneurs might start alone but aim to grow their venture into a larger company.
Solopreneurs often start their business in a specific niche. They are content to keep their business at a scale they can manage without wanting to hire employees or grow into a larger enterprise. They don’t view growth solely by income; they also consider the value of autonomy, flexibility, and well-being.
The Case for Solopreneurs: Drivers of Independence
Technology and Online Platforms
Technology opened up opportunities for solopreneurs that wouldn’t have been available a few years earlier. For example, social media channels spurred the need for influencers and content creators.
Digital platforms and marketplaces such as Etsy, Shopify, and Amazon Marketplace make it easier, cheaper, and more convenient for solopreneurs to start a business from anywhere. In 2021, about 7.5 million vendors sold goods through the Etsy platform, up from $4.4 million in 2020.
Videoconferencing, cloud storage, and payment applications such as Stripe, Venmo, and PayPal have also improved remote working and automation, putting vendors in direct contact with their customers.
Benefits:
- Low financial risk: Expenses for solopreneurs are typically low, and with no payroll to meet, they keep a more significant share of earnings.
- Minimal investment: A business can start with little or no money. Some solopreneurs start their businesses while still working full-time.
- Keeps things easy: Without employees or partners, there are fewer complications. The business owner makes the rules and determines culture.
- Full company ownership: No need to share profits with anyone else.
- Work from Anywhere: Solopreneurs are location-independent.
Impact on the Economy
Economic Diversity
While COVID-19 wreaked havoc on the economy, the growing solopreneur trend provided a silver lining. With varied options for solo businesses from owning an Etsy shop to web development, people have more opportunities to generate revenue. Solopreneurs also offer options for consumers to spend their money locally. With low overheads, solopreneurs help strike the balance between affordability and quality.
As COVID restrictions lifted, different industries emerged as popular choices for solopreneurs, including travel, events, entertainment, and transportation. With solopreneurs requiring specific tools to manage their businesses, that demand has spawned a new industry of support and advice for solo business owners.
More Opportunity in Labor Market
Nearly a quarter of microbusinesses were founded by people who may not have participated in the traditional workforce otherwise, including laid-off employees, students, retirees, people with disabilities, and homemakers. The Great Resignation also resulted in a substantial jump in the share of self-employed women.
An Eye to the Future
Raising millions of dollars in venture capital is a far cry from the capital needed to start a small independent business. Solopreneurship only requires an idea for creating a business and the passion to make it work. With increasing opportunity, and high satisfaction and accessibility, a career as a solopreneur is set to continue being a popular option for many Americans. The impact will be felt across the economic landscape and is already changing how we view work.
