So you're sick of your corporate gig and dream of making a living as a solopreneur?
Actually, you're not alone (pun intended). There are now more than 20 million single-person businesses in the United States, accounting for more than three-fourths of all U.S. businesses, according to recent U.S. Census data.
The prospect of running your own business has some obvious appeal. Being your own boss lets you set your own schedule – at least theoretically. This has some clear advantages for the family man or woman.
But be warned: working for yourself isn't for everyone. 'Just because you're a great technician at what you do doesn't mean you'll automatically be a great entrepreneur, too,' says Marla Tabaka, a business coach who writes The Successful Soloist blog for Inc.com. 'They're two totally different hats to wear.'
Running the show solo requires ample amounts of determination, discipline, and fearlessness. 'I've had many days where I just want to bury my head in the sand and ask, What did I get myself into?' says Chris Jordan, owner of Atlanta Insurance Live, an insurance firm based at his home in Atlanta.
But if you think you've got what it takes, follow our tips for building the foundation of a successful venture.
Running a One-Person Business: Getting Off the Ground
Getting a solo business off the ground takes more than a great idea. Like any start-up, it takes a specific, concrete business plan that includes your goals for becoming a solo practitioner. (Do you want to sell your business eventually, or do you just want a change of lifestyle?)
Putting together a plan will force you to think through that bright idea as an actual business. You might find your can't-miss opportunity was nothing but a pipe dream.
'The biggest mistake I see these days is thinking that a business idea will automatically turn into a viable business model,' says Terri Lonier, president and founder of Working Solo, a New Paltz, New York-based business strategy consultancy, and author of Working Solo: The Real Guide to Freedom and Financial Success with Your Own Business.
Then again, what if the idea really is viable?
'A lot of people start with a kitchen table idea,' Tabaka says. 'It's a great idea you come up with your cousin at dinner. But then the business booms, and your growth gets out of control. You need a plan.'
Another important consideration is your personal financial resources. Make sure you have a considerable amount of capital set aside, especially because in a sole proprietorship you assume personal liability for all activities of that business. If you borrow money and can't repay it, your personal assets are at stake.
It's also smart to play to your strengths. 'The best thing you can do is to make sure that you're getting into something that suits you and what you want to do,' Lonier says. 'It should be something that uses your unique capabilities and experience to allow you to position yourself uniquely in the marketplace.'
Indeed, drawing upon your previous professional experiences can really get the ball rolling for your new solo venture. 'It took me seven years working at a big company to build a clientele,' says Michael Nunziato, a now independent hair stylist in St. Charles, Illinois.
So remember: just because you spent a lot of time in coffee shops while peddling insurance doesn't mean you're ready to open that espresso bar.
At the beginning, it's really up to you to determine how the business functions, so be prepared for a migraine or two. 'There's a lot of scrambling,' Lonier says. 'It's like a lot of ducks paddling underneath the water line.'
Dig Deeper: How to write a great business plan
Running a One-Person Business: Stay Focused on What's Important
Time is a soloist's most valuable asset, Lonier says. A hawk-like focus on your most important functions as a business owner is essential. Don't get bogged down on administrative work when you should be focused on marketing your business and driving sales.
As a one-person show, that might prove to be especially difficult. More than one-third of sole proprietors said that their biggest challenge is finding the time and resources to generate new business, according to a recent survey conducted by Visa USA and SCORE, a nonprofit group that counsels entrepreneurs.
And if you aren't bringing in business to your company, who is?
'The hardest thing for me was leaving the security blanket behind,' Nunziato says. 'Having a big name behind you really helps bring people in the door.'
If you're trying to build a marketing strategy from the ground up, you need to be clear on who your customers are, because you don't have any time to waste on marketing to those who aren't. 'That's really the biggest challenge, determining who exactly your customers are,' Lonier says. 'Many times [business owners] think they understand who they are, but you need to be willing to interview and test potential customers, particularly in the early days of a company, in order to be able to build those relationships.'
One way to make marketing easier is through joint-venture marketing, Tabaka says. When she owned a coffeehouse in Naperville, Illinois, she realized that her company and a major drugstore in the same shopping center could work together and support each other's marketing goals.
Another important and relatively easy way to get your name out into the market is building your web presence through social media like Twitter and Facebook. Be sure you familiarize yourself with and utilize Search Engine Optimization (SEO) to make it easier for people to find your website.
Dig Deeper: Building your web presence
Running a One-Person Business: Be Disciplined
Solopreneurship isn't for the easily distracted. To manage your limited amount of time effectively, you have to be disciplined.
Jordan devotes specific tasks to specific days of the week. 'One day of the week I really focus on doing a lot of sales calls and business development,' he says. 'Another day is for the business planning and the numbers side. Another day is heavily focused on customer service issues.'
Your clients are the lifeblood of your business, but they can also put a serious dent in your rigid time management schedule.
'So often people can monopolize your time, which is the most valuable thing you have,' Jordan says. '[Business owners] make the mistake that you have to drop everything to answer the phone for a client, even if you're working on something totally different. You have to be in charge of your own schedule.'
One of Jordan's tricks to sticking to that schedule is limiting all phone conversations to 30 minutes. 'I can be in a great conversation, but when we start creeping up on that 30-minute point, I'm aware of it and ready to go onto the next thing,' he says. 'It's something I've ingrained in my head.'
Dig Deeper: How to set up a home office
Running a One-Person Business: Delegate, Delegate, Delegate
Just because you're the only employee of your business doesn't mean you have to do everything on your own. In fact, you should delegate any task that can be outsourced, particularly if you're not that experienced – or good – at something. This will allow you to focus on your most important responsibility: driving sales.
Tabaka says she's a huge fun of virtual assistants. According to the International Virtual Assistants Association, virtual assistants are independent contractors who remotely provide administrative, creative, and technical services for multiple clients. One of the biggest concerns among solopreneurs, however, is that they won't be able to afford virtual assistants, whose services typically cost around $40 or $50 an hour.
'Solopreneurs often don't see their own time as having a dollar value,' Tabaka says. 'It does. It might take you 20 hours a week to do web design because you've got a huge learning curve. That's 20 hours you could put toward marketing and bringing in new clients.'
Hiring freelancers or independent contractors is another option. Dick Clark, owner of Atlantic Training, hires independent contractors to help reduce the burden of managing the management consulting firm based in his home outside of Los Angeles.
'I try to farm out everything I can,' he says. He prefers to do that with independent contractors rather than full-time employees due to the constantly changing nature of his business. 'If I have people working for me, I'm responsible for paying their salary. With contractors, I pay them when I have an income, and I don't hire them otherwise.'
Technology can also be a major time-saver. Here are a few tools to get you started:
- QuickBooks – a business accounting program for small business
- Quicken Home Office – personal and business finance software
- Filemaker – database management software
- eFax – converts your faxes into PDF files sent to your e-mail
- Google Docs and Calendar – create and share web-based spreadsheets, presentations and calendar alerts
- Mail Chimp – free e-mail marketing service and e-mail list manager
One word of caution from Lonier, however: Make sure you're familiar with your finances before you hire someone to do your bookkeeping. 'If you don't understand how your finances work, then you've lost control of your business,' she warns.
Don't forget that as a sole business owner, your business relies entirely on you. If you die or become incapacitated, you need to arrange for who's going to take over your business, or at least pay off your debts. Or if you simply want to take a vacation, make sure you can arrange a backup for when you're gone.
Dig Deeper: Debunking the delegation myths
Running a One-Person Business: Surround Yourself with Advisers
You've probably noticed by now, but the reality of running a business by yourself is that you're not going to be successful if you do everything completely alone.
In addition to delegating, it's a good idea to assemble a diverse group of colleagues, peers, and advisers to bounce ideas off of, Tabaka says. 'Look at your needs, and look at the areas you're not strong in,' she says. 'Surround yourself with people who know more than you do. You'd be surprised how flattered a lot of people are when you ask them for this mentorship.'
You should ask this advisory group to meet with you on a regular basis, either in person or over the phone. Lonier, who has been in such a group for more than 15 years, meets with them every four to six weeks for about an hour. 'We come prepared to talk about some of our current challenges and to get feedback on what we've been doing,' she says. 'We also hold each other accountable.'
Having trouble finding some advisers? Don't forget about social media. 'I've actually met some tremendous people on Twitter,' Jordan says. 'It's important to have that third-party perspective to provide valuable insight.'
Of course, you'll also want to make sure you have a good business accountant who's familiar with small business and can meet with you quarterly, as well as a good lawyer if any legal issues come up, Tabaka says.
Dig Deeper: Are you ready for self-employment?
Running a One-Person Business: Make Time for Your Life
The dividing line between work and play can often become blurred when you run your own business, particularly if it's home-based.
'Some people love their 10-second commute,' Lonier says. 'They like that they can work when they want. On the other hand, some people haven't taken a vacation in four years.'
Realize that you are the most valuable part of your business and take care of yourself, she says.
Doing that can become one of the more difficult parts of being a solopreneur. 'I'm constantly working to find that balance,' Jordan says.
Dig Deeper: 10 ways to improve your work-life balance