Individual entrepreneurship 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 handicrafts, such as ironwork, sewing, and carpentry, which became cottage industries in their own right. These individuals and families as sole proprietors had multiple sources of income that provided protection against poor harvests and for the changing wants and needs associated with the supply and demand for materials and supplies, labor, and products and / or services.
Employers would “offer” work to sole proprietorships who were, in effect, independent contractors. In the shift from the agricultural age to the industrial age, operational work was centralized in factories and later, administrative work was centralized in offices. The practices were established over time, often with the involvement of unions, which have been regulated through labor and employment, health and welfare, immigration, and tax laws and regulations, at both the federal and state levels. Such practices turned the notion of job creation into a complex activity subject to a multitude of laws and regulations with the risk of litigation and sanctions for non-compliance.
At the height of the industrial age, one could expect to be employed by a single employer for many years, if not an entire career, and reap many benefits as a result, aimed at retaining quality and / or loyal people. The cost of benefits, employment and unemployment taxes, and workers’ compensation insurance must be added to the direct labor rate to determine the fully charged rate. The labor rate is fully charged when overhead costs such as equipment, facilities, supervision, supplies, and utilities are added to the full charge rate. The overburdened costs can easily be twenty to thirty percent more than the direct labor rate.
Some jobs may be performed by independent contractors, who are generally responsible for paying their own benefits, taxes, and insurance. However, strict rules apply about who can be classified as such. In general, an independent contractor tenant can only control the outcome of what is 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 technology, process, telecommunications, and transportation has had a profound effect on the workplace and enabled globalization. The impact is pervasive across business, leadership, and management (entrepreneurship) disciplines, and across administrative and operational activities, such as finance, human resources, marketing and sales, manufacturing and distribution, and merchandising. Globalization allows work to be strategically distributed to best-in-class or scale (low-cost) suppliers for each product and related activities in the value chain. Taken to the 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 charged rates, including telecom and transportation costs, are lower from external providers than internally, and / or when there is less risk, especially with regard to litigation. However, there are negative consequences for local economies when employers cut large numbers of jobs through outsourcing. Therefore, community costs and benefits must be considered in an outsourcing decision.
The effect of technology, and the consequent globalization, is that the need for professional personnel and vocational work in domestic employers is reduced, and in some cases quite dramatically. Traditional assumptions about employment in fully vertically integrated companies that historically carried out all activities “in-house” are eroding. Therefore, many people find it difficult to enter or stay in the traditional workplace, especially when there are cost and quality gaps between employers and with outside providers performing cheaper work to the same standards.
In retail, large “big box” stores will continue to offer scale for commodities and / or services at discount prices, putting pressure on their suppliers to keep costs down. Specialty stores and boutiques will continue to offer higher quality, value-added products and / or services at higher 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 whenever possible, than to employ traditional wholesale and retail facilities. to keep distribution costs low.
As a consequence, a new type of entrepreneur is emerging: the individual entrepreneur. The sole proprietor has multiple sources of income from employment and / or entrepreneurship / business ownership and investment activities. The individual entrepreneur must take full responsibility for his livelihood through these activities. For example, an individual entrepreneur may be a full or part-time employee for one or more companies, and / or be an entrepreneur in the emerging and growth stages of an upwardly mobile company, and / or be a lifestyle. commercial business owner and / or independent contractor in disciplines such as affiliate marketing, consulting, freelance work, and network marketing. An individual entrepreneur may retain employees and independent contractors in their own right for lifestyle business ownership activities and upward entrepreneurs, while working only as an individual entrepreneur and / or internet web entrepreneur.
The notion of individual entrepreneurship 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 a business activity that may not be fully sustainable in its own right.
Examples of individual business activities include working part-time for an employer while operating a retail or restaurant business; work full time for an employer while developing a network marketing business; and providing independent technology services while conducting affiliate marketing activities and selling articles, books, and webinars.
Individual entrepreneurship is particularly relevant for younger, less experienced people entering the workplace for the first time and for older people who are perceived as inefficient, overpriced, and out of touch with their younger peers in the marketplace. However, seniors can have years of functional knowledge and technical skills that are valuable to emerging, growing, and mature companies, and can be leveraged through consulting without the burden of employment costs. Individual entrepreneurship is a discipline that any unemployed or underemployed person can follow if they have the passion or the need; the opportunity is usually beyond your comfort zone.
The notion of individual entrepreneurship changes the assumptions about profits, insurance and taxes, especially when sole proprietorships become service providers for former employers as independent contractors. Thus, governments are likely to increase enforcement of labor, labor, and tax laws as individual entrepreneurship, and especially self-employment, becomes more common. However, with technology rapidly changing product and / or service and infrastructure paradigms, life expectancy for certain types of work can be relatively short compared to the past.
As the economy continues to globalize and technology becomes more ubiquitous, more people will be faced with the need to develop their individual entrepreneurship knowledge and skills in order to promote themselves in competitive markets for both employment and products and / or services. In effect, this means understanding business disciplines (entrepreneurship, leadership, and management), understanding personal styles, and being able to balance professional and personal pursuits.