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Small businesses have always been a significant player in the global economy, especially in developing countries. The World Bank estimates small businesses comprise 90 percent of all businesses and employ around 50 percent of the population.
Some small businesses involve a small team that keeps operations running, but others are run by just one person. It could seem overwhelming to run a business entirely by yourself, but it is doable.
Many businesses start as one-person affairs. Some stay that way, while others don’t. If this seems like a route you’d want to take, here’s how you can start and run a solo business.
Starting a Solo Business
You can quickly start a business by immediately selling or providing paid services to your customers. This is often how most businesses start. However, if you want to establish and see long-term success, it’s essential to think things through.
Choose a Business Structure
A business structure determines your business’s day-to-day activities and limitations, such as the taxes you need to pay, your business obligations, decision-making responsibilities, etc. The most common business structures for one-person businesses are:
Sole Proprietorships. A sole proprietorship is a business structure owned by one person. There is no distinction between one’s business and personal finances, so you could be personally held liable for any business debts or obligations. On the other hand, this structure needs no formal paperwork unless you want to operate under another name than your own, adding to its convenience.
Limited Liability Companies (LLCs). An LLC is a separate legal entity, meaning that the business’s liabilities are separate from and will not affect the LLC members’ personal assets. Many LLCs have multiple members, but solo entrepreneurs can also create single-member LLCs, providing total control and liability protection. Even though there is paperwork involved in creating an LLC, there are plenty of resources that can file with the state on your behalf. Some LLC websites will even include a free registered agent, business documents and more.
One of the legal requirements for an LLC is to have a registered agent. This is the individual who receives important documents on behalf of the company. It can be overwhelming to be your own registered agent and it is often recommended to use a registered agent service to fulfill this requirement.
Know Your Audience
Before starting any business, it’s essential to know whether your idea has the potential to gain traction and a steady stream of customers. No matter how informal, conducting market research would better inform your starting steps to suit your target market better.
You could start by asking the people in your circle about viable products or services they need and enjoy. Social media is also a promising avenue for these questions. You could also visit forums, scroll through the niche communities on the internet, and see what improvements you can make to your business idea.
Create a Business Plan
It’s fun to be spontaneous, but planning is your best friend if you want to see your business enjoy long-term success. Aside from guiding your business strategy, a business plan also helps you secure additional funding from other individuals or entities.
You don’t need to adhere to a particular format, as long as your business plan serves your needs well. However, here are some sections you may include:
- Executive summary
- Company description
- Market analysis
- Management
- Product/Service lineup
- Marketing/Sales strategy
- Financial projections
Take Care of Your Legal Requirements
Depending on your business, you might need to apply for additional licenses and permits to begin operations. This is especially important for body or food-related businesses to ensure the health and safety of your customers and clients.
It’s also important to secure an employer identification number (EIN), even if you don’t plan to take on any employees. An EIN is often required in creating a business bank account if you wish to separate your personal and business finances.
Maximize Available Technology
Starting a solo business has become even more convenient with rising internet access rates. Many businesses don’t need a physical headquarters for their operations, as they do everything online.
E-commerce platforms and DIY website builders have made it more convenient to create online stores. Social media is a free and effective avenue for many businesses to promote their services. You can use an entire arsenal of tools to attract and sustain a solid customer base, so take advantage of them.
Ways to Sustain Momentum
Many of us start strong in our pursuits. But, the longer we stick with something, the more likely we will lose interest. If you’re not careful, your business might not last very long. If you want your small business to last, staying motivated is necessary.
Learn to Prioritize
Making a small business thrive while being the sole owner and manager is no easy task. It requires your time, commitment, and resources.
You don’t have to jump into being a full-time business owner right away, especially if you can’t do so just yet. Many successful businesses start as side hustles until the entrepreneur decides to do it full time.
Take the time to assess your business, the state of your finances, and your capacity to commit. Accounting for these factors will help you prioritize and take calculated risks for the good of your business and well-being.
Build a Support System
You might call yourself a solopreneur, but it’s nearly impossible to run a business without assistance. Working by yourself can also be extremely draining, as you don’t have any partners or employees to share the workload.
Therefore, it is crucial to create a support network for yourself and your business. This network can include family, friends, mentors, and other entrepreneurs. They can be a valuable source of comfort or advice, depending on what you may need.
Understand Your Capacity
A one-person business has an excellent capacity for growth, but it has its limitations. One person can only do so much, and it’s important to recognize the limits of your current business model.
Once you reach a specific threshold, you will be faced with whether to take on additional people or continue operating at your current capacity. Evaluate what success means to you, and choose a path that aligns with your values and priorities.
Running a business as a one-person show can be incredibly demanding, but the right strategies and mindset can help you thrive and attain success in a way that matters best to you.