Starting a business is complicated, but starting and running a one-person business can be especially daunting. While it means you won’t have a team to support your goals or the luxury of delegating, becoming a motivated entrepreneur is a chance to combine passion and effort to create something great and realize your dreams.
However, building a profitable one-person business can be a challenge. You’ll face countless business and personal obstacles alone while forging ahead with your company’s development and growth.
We’ll explore expert advice for starting and running a one-person business and share business ideas and success stories for inspiration.
We gathered tips and advice from successful self-owned business entrepreneurs to help you start your one-person venture. While every entrepreneur and business is different, many pointers will likely apply.
Many successful entrepreneurs recommend starting a one-person business as a side venture, at least initially. The benefits of growing your business on the side include the following:
Considering the best legal entity type for your business is crucial.
The obvious choice for a one-person business is a sole proprietorship, the simplest business structure available. However, there are upsides and downsides to this business structure:
Some experts recommend forming a corporation, such as an LLC, to protect your interests. “I would advise forming an LLC or incorporating the business,” said Deborah Sweeney, former CEO of MyCorporation.
Liability protection is the most obvious benefit. “Many entrepreneurs often elect to form a sole proprietorship for their small business. This entity is perfectly fine, but it does not provide the owner with liability protection like a limited liability company (LLC) would,” Sweeney noted. “If an entrepreneur decides to start a one-person business as a sole proprietor, they must know they will be held responsible for everything – foreseen and unforeseen alike – that could impact the business.”
Different business ideas lend themselves to different business structures. If you think your business might face lawsuits, incorporating the business may be best.
For example, if you form a one-person company that helps other businesses collect debts, you might be more likely to face legal ramifications than an e-commerce business selling art.
One-person businesses may eventually add team members and change from a sole proprietorship to a general partnership, limited partnership or LLC. Starting as a sole proprietorship doesn’t mean you’re locked into that structure for the rest of your entrepreneurial journey. If you run a successful one-person business, that doesn’t mean you can’t eventually become a multi-person organization.
If you operate as a sole proprietor, you need to understand your self-employed tax benefits and deductions, as well as how and when to file taxes.
Time management is critical when running a one-person business. Without delegating to employees, one-person businesses must stay on task so they don’t get overwhelmed. Here’s some time-management advice for one-person businesses.
Running a one-person business can be mentally fatiguing. To combat this, connect with like-minded individuals, even outside work.
“Honestly, just being ‘alone’ was the one thing that I struggled with, not having a team to chat with about the daily stuff,” said Kathryn Selby, founder of Selby NYC. “If you are someone who thrives with a small team – like me – try to find activities outside work where you can get that community feel, like group fitness classes or dinner clubs – those were two of the things that I found to be the most helpful.”
Here are some ways to connect with business peers, get advice, and combat loneliness.
Regardless of how you connect with others and build a community of supporters, it’s essential to branch out and meet people who can help you on your entrepreneurial journey. While it sounds counterintuitive, running a one-person business alone is unwise.
“I think it’s helpful to remember that you’re never alone,” said Bridget Burnham, founder of BurnBright Communications. “You are part of many communities who want to see you succeed. Don’t forget to reach out and share openly about your triumphs and struggles. It’s amazing how resources and leads appear when you tell people what you want and need.”
The world’s largest and most successful businesses have teams of hundreds, if not thousands, of people. You might be able to create a multimillion-dollar business alone, but it’s unlikely. You’re going to need help if you want to build a massive enterprise.
“It is possible to sustain success as a one-person business,” said Ali Boone, founder of Hipster Investments. “Where the buck will stop, though, is with limitation. You can only grow so big without a team. So if you find that limit — the limit that you can get to on your own and can maintain — you can certainly sustain that as long as you want.”
At some point, you may want to add team members to your venture. ” [You’ll]have to weigh your definition of success,” Boone advised. “If you’re making enough money to cover your lifestyle, and your goals aren’t to build any level of empire, you might be completely content to stay on your own. But if your definition of success involves anything more than that, you’ll need to start considering having a team.”
Smart hiring practices can help take your one-person business to new heights. Give yourself time to create a hiring plan, consider job descriptions carefully, and attract top talent with desired perks like flexibility.
When forming a one-person business, consider the following:
Just because you want to run a one-person business doesn’t mean you know what kind of business you want to launch. Try one of the following business ideas to easily and (hopefully) successfully go it alone.
You may also find inspiration by learning about some leading companies that first began as one-person businesses. These are some of the top names:
Julie Thompson and Max Freedman contributed to the reporting and writing in this article. Some source interviews were conducted for a previous version of this article.