05 Nov Solopreneurs Rule – and They Will Soon Rule More
Is being a ‘solopreneur’ – someone who basically runs their own shop –a good thing or a bad thing for the economy? We had better figure it out, because apparently the number of them (us actually, I am one as well) are increasing a phenomenal rate. That is one of the conclusions from a new study from consulting firm MBO Partners, which labels the rise of Solopreneurs, a ‘megatrend’, an assessment with which I would agree.
The megatrend label comes from MBO’s 2014 State of Independence in America Report, its fourth annual study on Solopreneurs. I’ve used their data before (notably in my book, Economorphics) because frankly it is one of the few ways to get a handle on how many independent workers there are out there. Although before talking about the numbers, perhaps we need to back up and define the term ‘solopreneur’.
MBO Partners has a fairly comprehensive definition, saying that a solopreneur is anyone 21 years or over whose job status can be described as one or more of “Independent Contractor”, “Self-employed”, “A freelance worker”, “A temporary worker”, “A fixed term contract worker”, “An on-call worker”, or “a small business owner with fewer than 4 employees”. By their count, that means there are 17.9 million of them in the U.S., up 1.2 percent from last year and up 12.5 percent since 2011. About 19 percent of the group also have a traditional full time or part time job, but the rest are on their own.
The report finds that most Solopreneurs are satisfied with their status, although 30 percent are what they call ‘Reluctant Independents’ who are basically employed by a single employer on a contract, or through agencies. This is a category I am watching,: they may well be temporary independents, given that as a group they will rush to ‘real’ jobs if they are offered to them. Thing is, employers are watching this group as well, and if things work out more will choose to retain workers this way rather than as traditional employees. Whether as a category they grow up shrink will depend on those employers decide that it is worth what they save on benefits to have employees who presumably have lower loyalty, to their organizations that full time employees would have.
According to the study though, the vast majority of solopreneurs are happy with their status. The happiest of all? The small but growing group ( 15 percent of the total) that generate $100,000 or more in annual revenues. As a group, those in this $100K club then to be older and more experienced than the entire group, and are also disproportionately likely to be male (63 percent of the total). I see this ‘successful’ group as one that is going to grow sharply over the next few years as boomers retire. Think retired-accountants leaving big firms and picking up contracts as they desire, or retired executiv
es using their skills to start small businesses. The strongest growth of all though (in my view) is likely to be in retired boomers who just want to generate any kind of income to supplement their (not high enough) retirement savings.