Being an entrepreneur isn’t easy, especially when you’re a team of one. Everything falls on your shoulders, and it’s no one (else’s!) responsibility if things go south.
Even when you’re running a small business with just a handful of people, it can be really difficult. If your team is larger, these items may not apply to you – but likely you just have different hurdles to conquer.
Don’t get me wrong – I would never go back to working a normal job unless I had to! There are a lot of benefits to being your own boss – like choosing your clients so you can work with people you truly like. We paint a pretty picture in our Instagram feeds and blog posts, though, so I want to provide another perspective, too.
One that explains why being a solopreneur sometimes sucks.
1. You can be your own boss, but only to a point
Being the head honcho, the one in charge, is a heady feeling. If you just quit a 9-5 day job where you hated your boss, it’s even better. Your first thought is probably that you don’t have to answer to that boss anymore!
That’s right – now you get to be your own boss!
Except being your own boss doesn’t mean you don’t have to answer to anyone. Now, you really have to answer to your clients, because if they aren’t happy, they’ll take their money elsewhere. Then you’re back to square one. Unless you’re in a field with no competition, where everyone has to choose you, you’ll need to have happy, satisfied customers.
Once you’ve established your business, hopefully you’ll become successful enough to choose your clients. When you get to this point, you’re able to work with only people that you like, projects you believe in, and businesses you yourself might patronize.
But no matter how choosy you can afford to be, you’ll always still need to make sure you’re keeping your clients satisfied.
2. You have to figure it all out…yourself
When there’s no boss, there’s no mentor either. What I mean is that when you operate as a team of one, you don’t have coworkers or experienced management team members to help advise and make decisions.
Instead, you have to decide everything on your own.
Sure, you may have a lawyer or accountant to help with specific tasks, but when it comes down to the bottom line, everything is truly up to you. And if you don’t know what to do, you still have to figure it out.
This is a great place to mention that it’s really helpful to have an outside mentor – preferably someone in your line of work, but at least another business owner – who can help be a sounding board. If you don’t have a mentor, then there are mentorship and mastermind groups on sites like Facebook where you can find some really good advice AND camaraderie.
You may also want an accountability partner – someone who can help make sure you stay on track with your goals and tasks.
3. There’s no steady paycheck
Reality time: when you’re a solopreneur or own a small business, there’s no such thing as a steady paycheck.
That’s right – what you make is directly and IMMEDIATELY tied to how well your business is doing financially. Hopefully you operate with some cash reserves so that you can still pay bills when time are slow.
But many times this isn’t the case. If you’re living paycheck to paycheck, and suddenly the next paycheck is missing or less than usual, you may have tough choices to make.
4. There’s no one to cover for you when you take a vacation
If you’re the only person running your business, it becomes very hard to take a vacation. There are still tasks that need to get done – unless you completely close your business while you’re soaking up rays on a beach somewhere!
And if you’re the type of solopreneur who trades time for money – a business where you’re paid based on the number of hours you work – then all income-making opportunities may grind to a halt while you’re on vacation.
I’m not saying you shouldn’t go on vacation, though. Everyone needs to take a break. Otherwise you’re heading straight for a mental breakdown, or at least a bad case of burnout.
The best way to handle this is to have a passive income stream that can make money without your having to do anything immediate. This is usually in the form of digital products: a course, an e-book, selling photos on stock photography sites, etc. Any form of income that can keep going for a week or two while you’re traveling is a great thing to have.
5. Being a solopreneur can be lonely
When you work alone, it can be make for a lonely day. There are no chats in the break room or monthly birthday lunch bashes. You may not even see your clients in person…ever!
Hey, maybe there’s a good reason so many of us entrepreneurs talk to ourselves!
You need to make sure you’re interacting with others outside of your business. Take time for coffee with your best friend, a golf or tennis game on the weekend, and clubs, groups, or church organizations where you can get involved and build relationships.
And please don’t confuse clients for friends. It’s great to be friendly with clients, but you need to maintain a line of professionalism. It’s much better to have friends with whom you can be yourself and relax those boundaries some.
6. Doing your taxes is going to be much harder!
Unless you set yourself up as a sole proprietorship and just decide to eat the cost of self-employment taxes, your bookkeeping and tax returns are going to be much harder.
Most businesses, including many single-person ones, form a corporation or limited liability company for legal and financial reasons. When you do this, you have to have separate bank accounts and track all of your income and expenses. And when tax day rolls around, there will be no 1040-EZ forms anymore.
Now you have to fill out schedules!
For me, this was a no-brainer. I’m no good at this stuff so I hired an enrolled agent to do my taxes. But there’s still a lot of bookkeeping needed for a small business, even if you don’t do your own taxes.
Expect some on-the-job-learning in the area of accounting!
Well those are a few of the challenges I have faced, both as a solopreneur and the owner of a small business. I’m sure others can offer many other reasons as well. Don’t let this discourage you, though. I’m not trying to nay-say being an entrepreneur. It’s just important to go into it knowing there are downsides as well as the more obvious benefits.
If you’re a solopreneur or head of a very small team, what are your challenges? Leave a comment below to let us know.