2010-06-30 15:37:30
Starting and running a business alone isn t for everyone. If you re up to the
challenge, here are a few tips to make it work.
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:
presentations and calendar alerts
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