How to Run a More Effective MeetingOn by Ramsey
How to Run a Successful One-Person Business
Entrepreneurs often say they “wear a lot of hats.” This is true for most people starting their own business, and many business advisers suggest delegating certain tasks when possible. Entrusting employees with work reduces a founder’s busyness and allows them to work on their business, rather than in the business.
The advice makes sense, but what happens if you’re the only person within your business? If you’re running a one-person business, you don’t have to hire a team of employees and delegate to find success. Depending on the industry, you can create successful and long-lasting one-person businesses.
Building a one-person business that finds sustained success can be challenging, though. There are countless obstacles you must face alone, which makes the process of developing a solid business harder. These obstacles can be overcome, however. To understand how to make it as a one-person business, we reached out to entrepreneurs across the country. They shared tips on how to run a one-person business from their experiences.
How to start a one-person business
Before we dive into the tips we got from entrepreneurs about how to launch a one-person business, it’s important to note that none of these pointers are absolute facts. Every situation is different, and not every rule applies perfectly to your business. We have found, however, that most people we spoke to about starting and developing a one-person business normally follow a similar trajectory. This doesn’t mean you have to follow that plan, but this framework tends to lead to success.
1. Start your business on the side.
An overwhelming majority of people we spoke to mentioned starting their one-person business as a side venture, at least at first. They recommended doing this primarily for financial reasons. Instead of quitting your job and losing a major income source, try to start your business on the side until it gains traction. Use a few hours before or after work to build the business and gain clients or customers. If you do decide to quit your job, you’ll want a good bit of money saved up to grow your business. It’s going to take time to build a one-person business and quitting your job can make finances a challenge.
Starting on the side also sets you up for success when you decide to leave your current situation. If you develop a client base over a year or two while also working a full-time job, you’ll bring in money on the side and be ready to grow an already established brand once you take the venture on full time. For financial security, starting your one-person business as a side hustle is often the way to go.
Beginning as a side project also gives you time to iron out the flaws in your business plan and work through struggles without it drastically altering your income. Starting your business on the side reduces some of the stress that comes with running a one-person business full-time.
You may even find that starting a business brings unexpected challenges that you aren’t interested in overcoming. A few months of pursuing a business idea might cause you to re-evaluate your career path or develop new business ideas in different sectors. The main benefit of starting your business on the side is the flexibility to make mistakes and fail without losing your only source of income.
2. Find the right business structure.
The seemingly obvious choice for a one-person business is a sole proprietorship, which are the simplest forms of business available. There’s a solid amount of flexibility with a sole proprietorship, as you can be an independent contractor or operate a small business in a more traditional sense. Hypothetically, if your side business consists of you writing marketing copy for businesses on a freelance basis, a sole proprietorship is the logical choice.
On the other hand, sole proprietors are responsible for all the company’s profit and debt. This can become an issue as your business expands. If you get into a lawsuit, your assets are on the line and can be held responsible, rather than the business entity. Potential lawsuits become more relevant the more customers you serve. You’ll also want to keep an eye on what self-employment taxes you might have to pay.
“I would advise forming an LLC or incorporating the business,” said Deborah Sweeney, CEO of MyCorporation. “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. 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 as well. If you think your business might find itself facing lawsuits, it might behoove you to incorporate the business, like Sweeney suggests. 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 or any other legal structure to a general partnership, limited partnership or an LLC. Starting as a sole proprietorship doesn’t mean you’re locked into that structure throughout your entrepreneurial journey. Being a successful one-person business doesn’t mean you can’t eventually become a multiperson organization.
Whatever you decide, it’s important to at least consider the type of legal entity you want your business to be. For more information on the different types of business structures, visit our guide on choosing the best legal structure for your business.
3. Prioritize your tasks.
Time management is arguably the most important aspect of running a one-person business. Without the ability to delegate tasks to employees, it’s critical that one-person businesses don’t waste time. If you waste time, nothing gets done.
Give Everyone a Role
Establish Ground Rules
Ask yourself, “What is the role of the meeting participants?” The more clarity you can provide about what you want to get out of them, the better; people are more likely to contribute if they know what role they’re supposed to play. Is the point of the meeting to give out orders? To brainstorm? To discuss a plan of action?To help you clarify the type of meeting you are running, try one of the strategies from these leaders or use them as inspiration to develop one of your own:
Be clear whether your thoughts are an idea or a command. Dawn Lepore, the former chief of Drugstore.com, sometimes used this framework as lighthearted shorthand for the goal of her meetings: “People don’t always know if you mean something as just an idea, or you want them to go do it. A light bulb means this is just an idea I had, so think about it. A gun is, I want you to do this.”
Who gets to make the final decision on an issue? Sheila Lirio Marcelo, chief executive of Care.com, a company that helps people find caregivers, developed this system to signal who’s responsible:“Type 1 decisions are the decision-maker’s sole decision — dictatorial. Type 2: People can provide input, and then the person can still make the decision. Type 3: It’s consensus. It’s a great way to efficiently solve a problem.”
Not all decisions are made by consensus. One of a leader’s main responsibilities is to get as many opinions as possible on the table. But you have to be clear when you’re just soliciting input.Carl Bass, the former chief executive of Autodesk, said there is often a built-in tension in encouraging people to share their opinions, as it may lead them to believe a decision will come down to a democratic vote. Here’s how he addresses it up front:“We’re very clear at the beginning of every meeting whether it’s one person’s decision, or whether it’s more of a discussion to reach consensus,” he said. “I think it’s a really valuable thing to understand because otherwise people can feel frustrated that they gave out their opinions but they don’t understand the broader context for the final decision.”
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