Individualpreneurship – The Discipline Of The Individual Entrepreneur As An Enterprise

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Individualpreneurship is not a new concept; it has its roots in agricultural societies where individuals and families worked the land and had other forms of income from crafts such as ironwork, needlework, and woodwork that became cottage industries in their own right. These individuals and families as individualpreneurs had multiple sources of income that provided hedges against poor harvests, and for the changing wants and needs associated with supply and demand of materials and supplies, labor, and products and/or services.

Entrepreneurs would “put out” work to individualpreneurs who were, in effect, independent contractors. In the shift from the agricultural age to the industrial age, operational work became centralized in factories and later, administrative work became centralized in offices. Practices were established over time, often with the involvement of unions, that have become regulated through labor and employment, health and welfare, immigration, and taxation laws and regulations at both the Federal and state levels. Such practices turned the notion job creation into a complex activity subject to a multitude of laws and regulations with risk of litigation and penalties for non-compliance.

In the peak of the industrial age, one could expect to be employed by a single employer for many years, if not for an entire career, and earn many benefits as a consequence thereof aimed at retaining quality and/or loyal people. The cost of benefits, employment and unemployment taxes, and workers compensation insurance have to be added to the direct labor rate to determine the fully loaded rate. The labor rate becomes fully burdened when overhead costs such as equipment, facilities, supervision, supplies and utilities are added to the fully loaded rate. Fully burdened costs can easily be twenty to thirty percent more than the direct labor rate.

Some work may be performed by independent contractors, who are usually responsible for paying their own benefits, taxes, and insurance. However, strict rules apply as to whom can be classified as such. In general, the hirer of an independent contractor can control only the result of what gets done, but not how, when, or where. Many industries such as insurance, mortgage origination, real estate, and travel use independent contractors as agents to generate sales.

In the shift from the industrial to the information age, the impact of information, process, telecommunications, and transportation technologies has had a profound effect on the workplace, and has enabled globalization. The impact is across the board in entrepreneurial, leadership, and management (enterpriship) disciplines, and administrative and operational activities such finance, human resources, marketing and sales, manufacturing and distribution, and merchandising. Globalization enables work to be strategically sourced to best-in-class or scale (low-cost) providers for each output and related activities in the value chain. Taken to an extreme, it is possible to outsource everything except strategy formulation and strategic marketing activities. Information technology reduces analytical activities, and process technology reduces operational activities. Naturally outsourcing becomes popular when fully burdened rates, including telecommunications and transportation costs, are lower from third-party providers than in-house, and/or when there is less risk, especially with respect to litigation. However, there are negative consequences to local economies when employers eliminate large numbers of jobs through outsourcing. Therefore, the community costs and benefits should be considered in an outsourcing decision.

The effect of technology, and the consequential globalization, is that the need for professional staff and vocational labor in domestic employers is reduced, and in some cases quite dramatically. The traditional assumptions regarding employment in fully vertically integrated enterprises that historically performed all activities “in-house” erode. Thus many individuals find it hard to enter or remain in the traditional workplace, especially when cost and quality gaps exist between employers and with third-party outsourced providers who perform work cheaper at the same standards.

In retailing, the large “big box” stores will continue to provide scale for commodity products and/or services at discount prices, thus placing pressure on their suppliers to keep costs low. Specialty stores and boutiques will continue to provide value-added and higher quality products and/or services at premium prices. Manufacturers of new specialized personal products and/services, such as nutraceuticals, are more likely to establish networks of independent marketing representatives and sales agents, leveraging the internet where possible, than employ traditional brick and mortar wholesale and retail facilities to keep distribution costs low.

As a consequence, a new kind of entrepreneur is emerging – the individualpreneur. The individualpreneur has multiple streams of income from employment and/or entrepreneurship/business ownership and investing activities. The individualpreneur has to take full responsibility for their livelihood through these activities. For example, an individualpreneur may be an employee on either a full-time or part-time basis for one or more enterprises, and/or be an entrepreneur in the emerging and growth stages of an upwardly mobile enterprise, and/or be a lifestyle business enterprise owner, and/or an independent contractor in such disciplines as affiliate marketing, consulting, freelancing, and network marketing. An individualpreneur may retain employees and independent contractors in their own right for upwardly entrepreneurial and lifestyle business ownership activities, while working alone as a solopreneur and/or a webpreneur on the internet.

The notion of individualpreneurship arises when traditional employment opportunities erode but there is an opportunity for an individual to provide value-added services, or because an individual wishes to pursue an entrepreneurial activity that may not be fully sustainable in its own right.

Examples of individualpreneurial activities include working part-time for an employer while operating a retail business or restaurant; working full-time for an employer while building a network marketing business; and providing freelance technology services while performing affiliate marketing activities and selling articles, books, and seminars on the internet.

Individualpreneurship is particularly relevant for young less experienced people who are entering the workplace for the first time, and for older people who are perceived as being inefficient, too expensive, and out-of-touch with their younger peers in the marketplace. However, older people may have years of functional knowledge and technical skills expertise that is of value to emerging, growth, and mature enterprises, and can be leveraged on a consulting basis without the burden of employment costs. Individualpreneurship is a discipline that anybody who is unemployed or under-employed can pursue if they have the passion or the need; usually opportunity is just beyond their comfort zone.

The notion of individualpreneurship changes assumptions regarding benefits, insurance, and taxes, especially when individualpreneurs become service providers to prior employers as independent contractors. Hence, governments are likely to increase their enforcement of labor and employment and taxation laws as individualpreneurship, and especially independent contracting, becomes more common. However, with technology rapidly changing the paradigms of products and/or services and infrastructures, the life expectancy for particular types of job can be relatively short compared to the past.

As the economy continues to globalize and technology becomes more ubiquitous, more individuals will be faced with the need to develop their individualpreneurship knowledge and skills in order to be able to promote themselves in competitive marketplaces for both employment and products and/or services. In effect, this means understanding enterpriship (entrepreneurship, leadership, and management) disciplines, understanding personal styles, and being able to balance both professional and personal activities.


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