In today’s fast-paced and dynamic business world, there are many ways to build a successful business or career. Starting a sole proprietor business or building a business while working with teams of freelancers or full-time employees are the two popular paths chosen when one is trying to build a business. As several successful entrepreneurs suggest, both options have their unique advantages and disadvantages, and each approach can lead to different outcomes.

Solopreneur vs. entrepreneur vs. business owner

Powered by Bill Hauser‘s valuable insights, we will explore the differences between these paths, i.e., being a solopreneur, freelance business, and working with teams. The aim is to help you decide which path is right for you.

Sole proprietorship vs. freelance business

There are some differences between a sole proprietorship and a freelance business, both of which are types of businesses run and owned by one person.

A sole proprietor business is a type of business structure where an individual owns and runs the business themselves. This means that the solopreneur is personally responsible for all aspects of the business, including any debts or legal issues that may arise. A sole proprietorship can have employees, but the owner is still responsible for all decisions and actions taken by the business.

On the other hand, a freelance business is a type of business that provides services to clients on a project basis. Most freelancers work for themselves and offer their skills and knowledge to clients on a temporary or project-by-project basis. They may work for multiple clients at once and are generally not tied to any one employer.

One of the key differences between these two types of businesses is that a sole proprietorship can offer a wider range of products or services than a freelance business. A sole proprietorship can operate as a traditional business, with a storefront or office, while a freelance business typically operates remotely and may not have a physical presence.

Additionally, a sole proprietor business may have more legal and regulatory requirements, such as obtaining business licenses or permits, registering with the government, and paying taxes. Freelancers may still need to obtain certain licenses or permits, but they typically have fewer legal obligations.

Sole proprietorships and freelance businesses: same but different?

Even though both sole proprietorships and freelance businesses are owned and run by one person, they are not the same in terms of their size, legal requirements, and structure. However, there are some downsides to running a freelance business. One of the most significant challenges is the lack of stability that comes with being a freelancer. You may have months with plenty of work and then other months with little to no work at all. As a freelancer, you are responsible for finding your own clients, which can be time-consuming and challenging.

Another big problem with being a solopreneur or freelancer is that you have to take care of all aspects of your business on your own. This means that you will be responsible for all marketing, customer service, and administration tasks. This can be overwhelming, especially for those who are just starting out and have limited experience running a business.

Entrepreneurship: Building a Business with a Team

On the other hand, an entrepreneur building a business while working with teams is a different model that involves a team of employees or co-founders. In this model, the entrepreneur is responsible for the overall strategy and direction of the business, while their team handles the day-to-day operations.

One of the most significant advantages of building a business with a team, as pointed out by several successful entrepreneurs, is the potential for growth. Working with teams comprised of dedicated and skilled employees allows you to take on larger projects and scale your business more quickly. Additionally, with more people involved in the business, you have the opportunity to leverage the unique strengths and skills of each team member.

Another significant advantage of building a business while working with teams is the potential for stability. With a team of employees, you can build a more reliable business that can weather the ups and downs of the market. You also have more help and can give tasks to other people, giving you more time to work on strategic tasks.

However, there are some disadvantages to building a business with a team. One of the most significant challenges is the additional overhead that comes with hiring employees. You will be responsible for paying salaries, benefits, and other expenses associated with running a business with employees. Additionally, managing a team can be time-consuming and requires strong leadership skills.

Another significant disadvantage of working with teams is the potential for conflicts and disagreements among team members. When working with a team, it’s important to have clear communication and processes in place to manage conflict and ensure everyone is striving together towards a common goal.

Solopreneur vs. freelance business vs. working with teams: Which Route Is Best for You?

Ultimately, the path you choose will depend on your individual goals and preferences. If you enjoy working independently and have a specific skill set that you can offer to clients, a sole proprietor business or freelance business may be the right choice for you. However, if you have a vision for a larger business and want to leverage the skills and strengths of a team, you may wish to undertake your entrepreneurial journey with a tactfully chosen team in place. Several successful entrepreneurs have tried all three formats along their journey and found the scope to succeed with both.

Sole proprietor business or building your business while working with teams—which one is your preferred choice?