Individualpreneurship is a discipline, a mindset, and an activity whereby an individual (the “individualpreneur”) behaves as an enterprise in their own right, and is fully responsible for both professional and personal income generation and expense management. In effect, the individualpreneur is in business for themself.
Whereas solopreneurs are independent professionals, individualpreneurs can have multiple businesses and can employ other people.
An individualpreneur develops multiple income streams from many sources. Thus, the individualpreneur is better hedged against uncertain economic, regulatory, and social conditions than those individuals who rely upon primarily on one source of income.
Sources of an individualpreneur’s income include:
- Entrepreneurship/business ownership
The individualprise represents the aggregation of all sources of an individual’s income. Gross income results from wages from employment, and revenues from commissions, dividends, fees, interest, rents, royalties, sales, and capital gains from entrepreneurship/business ownership and investing activities. Net income (profit) results from gross income less the expenses required to generate it. The cash flow generated from net income generates wealth, which can be used for investing purposes.
The broadest definition of wages includes all remuneration or compensation paid for services rendered by an employee, whether in cash or in other forms including bonuses, commissions, and gratuities, based upon piece, task, or time.
The need to develop and manage multiple sources of income arises from increasing uncertainty about economic, regulatory, and social trends.
For many individuals, the primary source of income is remuneration from employment, and the largest asset is their home (which is not income producing). Employment is an active form of income. However, the best forms of income are those that are residual and passive.
Residual income results from an initial transaction at some time in the past for which an ongoing cash flow is received; passive income results from transactions where the individualpreneur is not actively involved.
Examples of residual income include enrolling members in systems where downstream commissions can be earned; selling items, such as subscriptions that are automatically renewable, or consumables where the ordering is processed by third-parties; and affiliate programs based upon referrals.
Examples of individualpreneurship activities include:
- Having a full-time job
- Having one or more part-time jobs
- Being a trader on online auction sites
- Being a trader in securities
- Being a part-time real-estate agent
- Owning a lifestyle business, such as a restaurant or a retailer
- Owning a network marketing business
- Managing a real estate investment portfolio
- Managing a securities investment portfolio