Anatomy of a solopreneur [infographic]

David Bailey-Lauring
Written by David Bailey-Lauring
on November 12, 2020

Talented. Driven. Perseverance.

Not an answer to a question in a job interview about why you would be ideal for a job, but the defining traits of one group of people:

Solopreneurs.

Whilst it's obvious the word is portmanteau of 'solo' and 'entrepreneur,' it is not entirely obvious what precisely a solopreneur is.

Maybe you are wondering if you're a solopreneur? Perhaps you're interested in becoming one yet are not sure where to get started?

What is a solopreneur?

'Solopreneur' isn't a brand-new term, but it has gained momentum more recently. Many consider the word the same as a mere entrepreneur in recent years. The name is easily interchanged with the word 'entrepreneur,' but there are distinct differences. 

As many business professionals decide to begin a business without the intention of ever-growing a team staff, a solopreneur is a term (and group of people) that will continue to become more popular. 

The differences between entrepreneurs and solopreneurs are subtle. Some entrepreneurs work alone, just like solopreneurs until they can scale their businesses enough to hire employees and contractors

However, what truly differentiates solopreneurs apart from entrepreneurs is their mindset.

Entrepreneurs have ambitions that include not only building a team, but opening multiple offices, locations or stores, and offering varying products over a period. Ultimately, they wish for the day when they can offload the business to others to run it, or sell it to a larger enterprise. 

Though these are all beautiful things to aspire to, these values and goals are often not the focus of a solopreneur.

What do solopreneurs value about their way of living? 

1 in 10 solopreneurs comes from Spain

Solopreneurs love having a sole trading business because it supports a lifestyle where they can choose to be location-independent and flexible regarding their working hours.

Pre-pandemic saw most solopreneurs live a nomadic lifestyle and support themselves abroad. Having these choices are imperative for them. 

Solopreneurs are fans of a lean business operation because it empowers them to focus on what matters to them - offering business services they are passionate about doing.

Unlike entrepreneurs who seek to scale a business, solopreneurs do not have to be concerned with hefty expenses like employees, office space, software costs and wish to be their own boss and who don’t want to be a boss themselves.

Revenue increases are kept entirely within the business to be spent on themselves and fund their lifestyle, not expansion plans. 

Solopreneurs love working with people, but they don't like managing them. They will choose the right freelancers, contractors and consultants to collaborate with, but hiring them internally is not part of their raison d 'être.

Working with other specialists rather than generalists aids solopreneurs to learn and develop new skills. Critical for them to remain competitive in a world of freelance projects seeking new customers.

Where is the future of independent work going? 

In today's gig economy, more enterprises than ever before are searching for independent talent to fill the void in their workforce requirements. 

Nearly two-thirds of executives say their external workforce is essential for operating at full capacity and meeting demand.

Combined with more of us currently embracing the digital nomad lifestyle, either full or part-time, has complimented this search and filled the gaps needed. By marrying the two, both solopreneurs and enterprises witness greater productivity, and a more flexible and happier lifestyle. 

Rises in digitalisation and globalisation have sparked fundamental changes in how people work. Throw in the coronavirus (COVID-19) pandemic, and this continues to quicken even further. 

This acceleration is changing so rapidly that according to OECD research, nearly 14% of jobs in OECD countries are likely to be automated. Such numbers can sound alarming, yet new technological developments have actually provided unique opportunities to high-skilled people.

Technology and internet access have empowered many to continue their jobs at home during the pandemic. 

The platform economy has generated new job opportunities, including offering essential services both before and during the crisis.

Xolo customer data has shown that the below professions have transcended from larger enterprises to more agile, online and niche services:

  • Mobile & web development
  • Consulting
  • Online marketing
  • Design & UX work
  • Tech support
  • Editorial
  • Translating
  • Legal work

Where do solopreneurs come from? 

4/5 of solopreneurs worldwide call Europe their home

Xolo customer data represents that solopreneurs can be found in 119 countries. The key locations are:

  • Spain
  • Germany
  • France
  • Greece
  • Portugal
  • Italy
  • UK
  • Estonia
  • Belgium
  • Romania

80% of Xolo customers then are based in Europe, 10% in Asia, 5% in North America and the remainder elsewhere. 

It is easy to determine why the top three countries are Spain, Germany and France.

According to Expatica, starting a business when located in Spain, Germany and France can be a long and drawn-out affair.

The actual process to set up as a freelancer in Spain is relatively straightforward, although it is time-consuming. Applicants must register for tax and social security contributions in Spain and take out Spanish health insurance whilst working as an autónomo in Spain.

To set up a sole trader business in Germany, there are several registrations, and permits applicants must have before starting their business in Germany.

To start a business in France, applicants need to have a residence permit or be an EU citizen. 

Furthermore, they may need qualifications or diplomas that the French authorities will recognise. Then they will need to make budget forecasts, financial plans and do their market research to open a business. 

However, interestingly enough the most popular countries that solopreneurs bill for their services is:

  1. 22% USA 
  2. 10% Germany
  3. 9% UK
  4. 6% France
  5. 4% Switzerland

American clients account for roughly 1/4 of solopreneurs' income

And despite all the media headlines surrounding tariffs and protecting trade, cross-border business shows no signs of slowing down.

With savvy companies located in the USA, Canada and UK hiring the best talent in Europe to scale their businesses; it is no surprise that billing to these countries has increased.

Technology continues to evolve, and it has become more accessible for buyers to connect to sellers. 

Sole traders have utilised technology to sell their products and services to these markets and thus, reap all the benefits of a global marketplace.

How do solopreneurs get paid? 

With 30,000 invoices issued each month, and our team of accountants processing 110,000 transactions worth €750 million, getting paid is high on a solopreneurs mind.

These solopreneurs are using the following to ensure they get paid on time:

  • 19% are using PayPal, 
  • 7% use Stripe. 

Concerning business banking, solopreneurs use the Estonian-owned bank LHV, and the Estonian-British company TransferWise to receive their payments:

  • 49% use LHV, and
  • 57% use TW 

When invoicing customers, over 1,400 of them are being billed using our platform.

What is Xolo, and why do sole traders love it?

Several reasons, the Estonian corporate tax system is digital and straightforward to understand. Thus allowing solopreneurs to become sole business owners first and then begin to launch their solo careers. 

Previously, those workers seeking to transition to remote work had to be employed by large enterprises and after a period of working for them, requested to work more from home.

The Estonian e-Residency revolutionised this vision. Those seeking solopreneurship could set up their business within the EU, invoice countries from North America and Europe and get their business off the ground in a matter of weeks.

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Simplicity in doing business has made Xolo attractive to solopreneurs. Whether seeking to set up an Estonian company or to use Xolo Go (invoice without a company) to invoice customers has made those looking to become sole business owners an administrative haven.

For instance, Xolo's dashboard is a more straightforward way to manage your business. It provides a clear overview of expenses and sales, payment gateways, bank accounts, and sent invoices. 

Despite our customers' physical location, if they have an internet connection, they can upload their expenses and generate invoices to get paid on the go—no need to wait for a monthly report from an accountant. 

Lastly, Xolo customer support has set the bar for the new future of work. Knowledgeable team, faster response times to inquiries and a continually evolving knowledge base and blog on managing a solopreneur business is hugely accommodating for first-time solopreneurs setting out.  

How can you become a solopreneur?

Do you crave the ability to call the shots in your life both personally and in business? If so, you might be a solopreneur in the making. 

Unlike entrepreneurs, solopreneurs are focused on doing their thing and keeping it simple. 

This does not mean they are not ambitious. It means what they value as success is different from scaling entrepreneurs. 

Solopreneurs value being in control of their lean business, enjoying offering their services or making a product with minimal fuss. 

Furthermore, becoming a solopreneur is an easy way to start any business, even if you wish to eventually scale.

Starting small and building a business over time is a perfect way to test the ground and decide whether the lifestyle is for you. 

As Xolo Leap and Xolo Go customers find, once they begin small and see the merits of becoming a solopreneur, it is hard to turn their backs on that lifestyle.

If you wish to start becoming a solopreneur, then speak with a Xolo specialist today.

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