solopreneurship and e-⁠residency: when small is beautiful

E-⁠Residency supports freelancers attracted to the solopreneurship mindset but looking for a stable regulatory framework and limited liability business of their own.

I love it when people I meet at parties tell me I should describe myself as a business owner rather than a freelancer, because apparently it ‘sounds more professional’. In fact, freelancers and others dabbling in various forms of solopreneurship are often given unsolicited and inconsiderate advice to start taking their professional lives seriously.

Hmm, okay! Aside from the fact that I really am the proud owner of a limited liability company established in Estonia thanks to my e-⁠resident status, I generally find it simply creates confusion. There is an intrinsic assumption that a business owner either employs other people, or intends to do so soon / eventually.

I prefer to reclaim and define the terms freelancer or solopreneur to embrace the liberation of a location-independent solo operation. We need to identify and describe the kind of personal and lifestyle progression, as well as financial security, which can come from deciding to stay small in the first place.

This is something to take very seriously, especially considering recent geopolitical realities.

Sustainable solopreneurship

As if a pandemic wasn't enough. In 2022, war in Europe and other global crises, such as energy and food shortages, have created competing priorities for many people. On the one hand, our grocery and electricity bills are getting more expensive. There is a real need to make a living, earn more, and spend less. On the other hand, recent events taught us not to take our health, relationships, and lives for granted. No amount of profit is worth it if we burn ourselves out or run ourselves into the ground. 

There is a need for balance. People are looking for a middle ground, where they can make a meaningful contribution, while sustaining their sanity.

At the same time, we are in a new normality of possibilities — location-independent living, better lifestyle choices, and changes in attitude to mental health and remote work. Around Europe, businesses are experimenting with four day weeks, mental health days, and asynchronous collaboration. We have learned to consider and even openly discuss our emotional needs, lifestyle choices, and the desire to find meaning in our work.

So what about self-employment or solopreneurship — is this a sustainable solution?

Staying small in solopreneurship

Unequivocally, yes!

In his seminal book Company Of One [2019], Paul Jarvis makes the case for staying small (though not necessarily solo), and challenges entrepreneurs to question the mantra of growth as a goal. 

What if instead of getting bigger, we focused on getting better?

Jarvis' thesis can be summed up by the quote “start small, define growth, and keep learning,” which has very broad application. Even for those who might one day aspire to scale traditionally through investment and recruitment. It’s a great manifesto for creating a successful career in solopreneurship, and can yield sustainable income, choice, and a healthy work-life balance.

Finding your minimum viable freelancing offer and getting started is something every unicorn-aspiring tech entrepreneur will immediately relate to. It’s something I have been reflecting on in the Future is Freelance podcast regularly. But Jarvis suggests a more nuanced approach than the traditional startup ‘move fast and break things’ motto. Instead, he advocates for listening to your customers and deeply understanding their needs, while you steadily iterate toward serving them better and better.

This allows you to identify goals and what success will look like to you — whether that is more customers, scaling your product, decentralizing operations, or deepening relationship with fewer key clients. It also allows you to find new ways to add value and fulfil client needs, by extending your knowledge and expertise. This could even extend to becoming a niche subject-matter expert or trusted consultant in your own right.

Scaling tactically: The network is your net worth

Jarvis also points out that there is nothing in the company-of-one mindset which means you can never hire anybody ever! Just that it need not be the default solution to growth or success.

This advice is repeated across many other lean, agile success stories. In Jason Fried’s “It doesn't have to be crazy at work!”, he tells the story of Basecamp. The collaboration software company has been operating in a stripped-down way for years, proving that staying small is not new. Nor is rushing into funding for full-time hiring as the solution to everything.  

Once you decouple growth and hiring big, you'll think about your objectives far more flexibly. One way is to hire dedicated expertise only for the specific results and outputs you want, rather than time served.

Freelancers can easily ‘grow’ in other ways, for example by:

• Streamlining and automating processes, to free up time
• Deciding not to do certain types of work
• Collaborating with others on short-term projects and gig teams
• Partnering complementary services for a combined offering
• Outsourcing to Virtual Assistants, to divest specific tasks and activities (take a look at a great e-resident business Easy Assistant, to start your search.)

Solopreneurship and e-⁠Residency: an e-⁠resident business-of-one

For many solopreneurs around the world, operating a private limited company in Estonia as an e-⁠resident is the perfect solution.

It gives you the freedom to operate as a solopreneur indefinitely, because you only require a single owner, director, and shareholder… who can all be the same person!  And you can establish it very quickly and at low cost.

When you’re ready to invest in the minimum share capital (much lower than in some other territories) you can also enjoy the full protection of the limited liability status as well, without any increased overheads.

The straightforward digital financial tools Estonia offers in English mean you don’t need to hire administrators and accountants. If you prefer an even lighter touch service, a growing range of providers in the Marketplace offer business dashboards and toolsets to simplify things even further. This lets you pay for exactly the level of service you need at any given time, automating as much of it as possible.

Of course if you want to outsource, collaborate, or subcontract, having a business structure in place means it’s very easy to do so. Plus, you're also part of a network of similar enterprises where you can often find just the right partner without the risk of accidentally creating employment liabilities and commitments. Simple business-to-business contracting and invoicing makes it easy to get paid by clients around the world.

Freelancer + e-⁠resident = business owner

So, if you’re attracted to the solopreneur mindset and lifestyle but prefer a stable regulatory framework and limited liability of a business of your own, Estonia makes it possible.

As an added bonus, you will be able to say to people at parties, “me? I am a business owner.”

Let them nod sympathetically at the thought of all your overhead and hassle that running a small business entails. Meanwhile, you can slip frictionlessly through minimal admin, and have more time to devote to actually doing the creative and deep work you love. Or going to parties. Hopefully both — and that flexibility and freedom is really the whole point in the end!