The Financial Reality for Solopreneurs: A Balance of Passion and Practicality

For many entrepreneurs who’ve gone into business on their own, the idea of having total financial control of their own operation was a major motivator. When we surveyed 1,000+ solopreneurs, nearly a third (32%) cited the desire for autonomy (in all aspects) as their top reason for starting their own business.

The Power of One: 2025 Solopreneur Report details the results of our survey in full, including motivations, financial ups and downs, technology use, and more. While you can’t really put a price on autonomy, the survey made it clear that it’s also not without its cost. Here’s what we learned from respondents. 

Finding Your Financial Footing

58% of solopreneurs feel financially secure about their businesses. 

This is likely the impact of the freedom that comes with working for yourself. Solopreneurs are business owners who work without co-owners or employees. So while they do have to juggle all business functions on their own, being a team-of-one often significantly reduces their overhead. 

Some of their work may be outsourced to accountants or other as-needed specialists, but overall they get the satisfaction of having a direct hand in almost every part of their business. They also get complete control over all financial decisions, including what gets outsourced and what stays in-house. This means, despite the extra legwork, they’re more likely to feel confident in the value of their work — because they can see its impact.

64% agree that their business is a reliable source of income. 

The other benefit of working solo is getting to collaborate one-on-one with clients, and the reliability it can bring. This personal facetime can go a long way in building solid professional relationships, and a steady flow of work and income. When you’re the only one answering questions, replying to emails, and taking the time to attend meetings, clients may see you as hard-working and consistent. So even if you can’t take on the same workload as a team of professionals, the clients you do have are likely to work with you again. 

Navigating Income Gaps

Nearly half (48%) of solopreneurs have gone without income for at least a month.

This is the less sunny side of solopreneurship. Being your own boss often means sacrificing a steady paycheck. For a small business owner — particularly a sole owner — this can mean periods of significant financial uncertainty.

So what’s behind these income gaps? For one thing, it can take two to three years¹ for a new business to turn a profit. Beyond that, you also have to consider the reality of being a business-of-one. A single person can handle only so many gigs at one time, meaning that even one late client payment could lead to reduced or nonexistent income until that invoice is paid. Plus, demand for almost any service can fluctuate. When business slows down, your cash flow probably will too.

However, if you’re an aspiring solopreneur, you shouldn’t let that curb your ambitions. While 51% reported that their solo business was their only source of income, the other 49% stated that they had other income sources. The 49% included those who were solopreneurs:

• Full-time, but maintained a second income source
• Part-time, alongside another commitment

Building a Safety Net

68% have less than six months of savings — or no safety net at all.

One crucial element of financial security is setting aside funds in case of emergencies and unexpected expenses. But for many solopreneurs, there isn’t always much left over to put into a savings account. That’s also why it’s so important to properly budget when you’re a solopreneur.  

Here are some budgeting style suggestions² from one of our partners, Collective, a financial management platform for freelancers and self-employed people:

• Allocate certain percentages to different categories
• Dedicate an account to pay all your business obligations (think taxes, payroll, and debt) and the rest for purchases based on your values (or whatever else you want)
• Budget month-by-month, based on last month’s income/salary
• A zero-based budget where every dollar is allocated for, or is assigned to a “job”

And savings aren’t the only possible safety net to consider. Small business insurance can provide peace of mind, even in uncertain times. Depending on the type of policy or policies you have, commercial coverage can be a financial safeguard in the event of:

• Third-party injuries and property damage
• Alleged errors and omissions
• Business interruption
• Legal action 

Remember: Business insurance is an investment in your business’s longevity. And with Simply Business, finding the right coverage for your business’s needs is quick and easy. Try our online quote comparison tool to get matched with tailored policy options, shop prices from trusted insurers, and get covered — all in one place, all in just minutes.

Surviving Financial Stress

Financial stress was the top contributing factor for solopreneurs who have considered abandoning their business ventures.

Solopreneurs are a resilient bunch, but everyone has their breaking point. Over a third of those we surveyed (34%) admitted that they’ve considered packing it all in at one time or another, even if they never gave in to that impulse. Of those respondents, 72% cited financial stress as the primary reason.

So what can we learn from this? Financial uncertainty may come with the territory, but it can also take a mental toll. And managing stress might not always be the first thing on a solopreneur’s to-do list, especially given how much they have to juggle to keep their business running.

Fortunately, there are a few strategies that solopreneurs can adopt to help alleviate some of the financial burden:

1. Create a budget. Budgeting is a classic for a reason. It’s a best practice for any business owner trying to optimize their earnings, and it’s something anyone can do. Check out our free business budgeting template to get started. 
2. Be proactive about invoicing. As a solopreneur, your income depends on clients fulfilling their end of the bargain. Even one late payment can be a major financial stressor. Getting paid on time starts with a solid invoice system. You can download and customize our free invoicing template to create an invoice structure that works for you. And if clients aren’t settling their bills in a timely manner, check out our guide to getting overdue invoices paid (with free late payment templates). 
3. Diversify income streams. Remember that 59% who said they had more than one source of income? Holding down a second job (or income-driven commitment) might not be the best option for solopreneurs short on time, but if it is something you’re able to do, having that second income stream can be a lifesaver.

Balancing the Books — and the Dream

If you’re an aspiring solopreneur, don’t let the numbers get you down. While it’s important to consider the financial realities of going into business on your own, here’s one stat to remember:

76% of the solopreneurs surveyed were confident their business would grow in the next 12 months.

It’s clear that the majority of solopreneurs are optimistic about their future, in spite of the fiscal uncertainty. Going solo may be hard work, but it’s worth the effort.

Want more of what we learned from our solopreneur survey? Get all the details in The Power of One: 2025 Solopreneur Report.

References:

1. https://www.freshbooks.com/hub/startup/how-long-does-it-take-business-to-be-profitable?srsltid=AfmBOoofo1gBK3X0Dcig2kpTwOd70IrWH_5n5hitwhNCAgloVXPjOKBj ↩︎
2. https://www.collective.com/blog/create-business-budget ↩︎