I’m not going to BS you.
The premise of this article is that being a solopreneur who offers a service (as opposed to selling a physical product) is awesome. But honestly, the whole “solopreneur and service provider” thing is a combination that I stumbled onto. I didn’t plan it.
This article is my attempt to convince all you would-be entrepreneurial rock stars that, if given a choice, you should try to find a business that you can work alone, and offer a white collar service.
For as long as I can remember, I’ve always had ideas of varying viability. Many of them were definitely not solopreneur or services. My pizza truck comes to mind. It was a low-margin physical product that required employees (unless I wanted to give up my weekends, which is the only time my wife is home!).
Now that I’ve been a full-time consultant for 10 years, I’d decided that this just might be the only type of business that I ever want to own.
To convince you that my premise is accurate, I’ve come up with my top 5 reasons why you should consider becoming a solopreneur service provider.
No Physical Products
Managing physical products requires a lot of effort. You need:
- Money to buy the inventory (unless you drop ship),
- A place to store the inventory
- To take the time to ship the inventory
- A way to unload old inventory that’s not selling
- A method for processing returns of defective products.
Compare that with my consulting business. My client emails me documents, I read them and produce a documents of my own. The cost to produce them is only my time. I’m not saying it’s easy. What I am saying is that I don’t need to make an upfront investment in my product.
Minimal Financing Needs
My whole business is to assist small business owners who can’t afford to repay their SBA loan. I’ve seen some pretty difficult situations. In addition to the financial strain, the stress often has psychological implications. It’s a far cry from the stories that the media loves to tell about uber-successful entrepreneurs.
By starting a business that is not asset intensive (which in turn, drastically reduces the need for financing), you can avoid the headache and heartache that comes along with defaulting on a small business loan.
I’ve never needed financing for my business. The only major financial investment I’ve ever made was in Google Ads. And that was over time, and only because the ads were bringing me clients, so it only made sense to continue.
No Unnecessary Risk
When you compare a business like a restaurant, there is a huge mismatch of risk vs odds of success. What do I mean by that?
Let’s assume that the chances of any given business succeeding for more than 5 years is 50%. Wouldn’t it make more sense to invest $1000 in a laptop and a printer than to borrow $500,000 to build out and equip a restaurant? Again, the chances of success are the same. The only thing that is different is the downside.
I hear you shouting at your screen. I get it. Not everyone can be a consultant, and that’s true. But even if you are looking for something less white collar, there are tons of service businesses that just require labor, as opposed to equipment.
The carpenter who worked on my house last week is a great example. He’s got $2500 worth of tools. If it fails, he’ll be able to recover. The guy who borrowed $400K to start a pool company? That business is going to be sink or swim (pun intended!)
In case you’ve never met a human on earth, it can be hard to get people to do what you want them to. We’re all intrinsically motivated to do what’s good for us. That was certainly my attitude when I had a corporate job.
While I can’t say I’d buy another food truck, the guy who sold it to me did offer a small gem of wisdom (I like to think of him as my “pizza Yoda”.) “No matter how good the employee”, he said, “they will only care about 70% as you do about the business.” And I think he was being generous.
No Borders (Thanks Internet!)
As I type this, I’m on a plane headed to St. Martin. Before I went to work on this article, I complete and entire SBA OIC package for a client. I’m getting stuff done.
When you own a white collar service business, your work product can be created anywhere. The most common one I can think is tax preparation. Yo stur face time with the client’s in minimal, and the work can be done anywhere with electricity and internet.
I love the idea of sitting on a balcony that overlooks the ocean while making a living (which I’ll be doing in 4 hours). To me, it’s the epitome of freedom. Payin’ the bills while soaking in paradise on death.