Solopreneurs: Stop Fearing the Future. Prepare for it!

Solopreneurs have had a difficult last few years, but don’t give up on your future! Simply prepare for it with these easy steps.

| More on:
stock analysis

Image source: Getty Images

It’s no secret that the last year, and indeed the last few years, have been quite difficult for small business owners. While that’s true, a new study by Toronto-Dominion Bank (TSX:TD) has found it’s been even harder for solopreneurs. These are entrepreneurs who are the only employees of their business. And these business owners are quite pessimistic about the future.

Today, let’s look at how solopreneurs can stop fearing the future of their business, prepare for it, and thrive!

What the study found

The new survey by TD Insurance found that these solopreneurs were the least optimistic about their business’s future. Only 55% saw their business lasting beyond the next decade compared to 70% of small business owners with more than one employee.

The main issue was that these solopreneurs weren’t protecting their businesses to survive. There was little protection from unexpected events, events that could impact whether the company survives or thrives. In fact, only 33% of companies were insured.

Furthermore, 46% felt coverage wasn’t necessary, as they were the only employee. Solopreneurs also admitted that they held a weak understanding of insurance coverage at 41%, with 63% being less likely to speak with an insurance advisor.

Start protection!

Whether you’re a hair stylist going house to house, a carpenter doing odd jobs, or even an online solopreneur, get insurance. There are many reasons why, but in the end, you’re protecting your business and yourself.

Solopreneur insurance protects your business, your assets, and even your own personal finances. You could end up facing huge losses from lawsuits, property damage, or even medical expenses if you’re not covering yourself.

Types of coverage should include items such as professional liability insurance to protect against lawsuits. Liability insurance is for property damage or injuries. Business property insurance protects you if you lose items in a fire. There’s also health insurance, disability insurance, and even cyber liability in the case of a data breach. Bad things like these are possible and can cost you significantly.

Create an emergency fund

For items not covered by insurance, it’s also quite important to have some cash set aside to prepare for an emergency. This could include opening up a Tax-Free Savings Account (TFSA) to create an emergency fund for your business.

You should aim to create at least three to six months of operational expenses. This would mean creating a budget and putting aside cash just as you would for your own home emergency fund. However, you can also achieve this amount sooner by investing in safe, reliable stocks, bonds, and Guaranteed Investment Certificates.

A great choice right now would be a bank such as TD stock. Shares are down but recovering as we may be exiting this bear market. Shares are down 5% in the last year but up 5% in the last month alone. Yet it still trades at 10.89 times earnings, with a dividend of 4.59% as of writing to add more income. So, prepare now and stop fearing the future! In fact, you could thrive in it.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has positions in Toronto-Dominion Bank. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Stocks for Beginners

close-up photo of investor Warren Buffett
Stocks for Beginners

The Best Warren Buffett Stocks to Buy With $300 Right Now

These Warren Buffett stocks have long histories of growth, each offering their own reasons for why investors need them today.

Read more »

Technology, internet and networking, security concept
Tech Stocks

3 Things You Need to Know If You Buy Celestica Stock Today

Celestica stock (TSX:CLS) has surged an insane 215% in the last year. So is it now overvalued? Or should investors…

Read more »

a person prepares to fight by taping their knuckles
Dividend Stocks

Better Buy: Brookfield Asset Management or Fairfax Financial Stock?

Both of these stocks are certainly strong. But when it comes right down to it, which offers the best deal…

Read more »

Different industries to invest in
Tech Stocks

This Ridiculously Cheap Warren Buffett Stock Could Help Make You Richer

Warren Buffett jumped out and back in to this stock, so what should investors consider before buying in bulk as…

Read more »

Happy shoppers look at a cellphone.
Stocks for Beginners

3 Things About Aritzia Stock Every Smart Investor Knows

Aritzia (TSX:ATZ) stock may be down 14% in the last year, but it has climbed 67% in the last few…

Read more »

Target. Stand out from the crowd
Stocks for Beginners

1 Growth Stock Down 18% to Buy Right Now

Shopify (TSX:SHOP) stock dropped after earnings projected further low results in 2024, but this could be your opportunity to jump…

Read more »

Growing plant shoots on coins
Stocks for Beginners

4 Growth Stocks to Buy and Hold Forever

Are you wondering what kind of Canadian growth stocks could be worth holding forever? Here are four stocks that could…

Read more »

Utility, wind power
Energy Stocks

Brookfield Renewable Partners Stock: Buy, Sell, or Hold?

BEP stock (TSX:BEP.UN) now trades at half its share price back in 2021. So what should investors do with this…

Read more »