There are almost 25 million ‘nonemployer establishments’—a.k.a. businesses with no paid employees—operating in the United States today according to the Census Bureau. Though I became one of them seven years ago, I remember when I started like it was yesterday.
I had no real experience running a business. Sure, I’d helped various family members at their companies for years, working for my dad making terrariums (glass and mirror containers with plants) and baking cookies at my aunt’s bakery, but in those instances I was on the employee side of the equation, rather than on that the employer.
So, all I knew when I first began is that I needed to provide a service and get paid enough for it that I could earn a living. Oh yeah. I also realized that I had to set aside part of my earnings for taxes. Beyond that, it was a matter of trial and error in trying to figure out how to get my business off the ground.
Fortunately, I was able to figure things out and am proud to say that I now have more than enough work to keep me busy. In fact, last year was my best year yet. That’s why I’d like to share some of the things I’ve learned along the way that may help you if you’re in the beginning stages of solopreneurship.
Choose Your Business Wisely
This may sound like common sense, but some people jump into entrepreneurship with just one goal: to work for themselves and make money doing it. They don’t put a lot of thought into what this requires. They only know that they’re tired of working for “the man.”
The problem with this approach is, if you don’t get into an industry that you either have some experience in, have a fairly deep passion for, or otherwise have something to offer, it is difficult to make it. When you’re competing with others who’ve been working in that field for ages, you have to really want it to keep going. If you don’t, you’re likely to give up.
For me, writing was an easy business choice because 1) I’d always enjoyed it, 2) I was fairly good at it, and 3) I have always been interested in how you can use words to motivate, educate, and entertain. Plus, I like sharing what I know in areas related to health and wellness, personal development, and personal defense with others. Getting to spend my days researching in these areas and writing about them was something I felt excited about.
While you may already have an idea of what type of industry you want to be in, if you don’t, it might help to know the areas in which a lot of one-person businesses exist. So, the U.S. Small Business Administration (SBA) indicates that, out of 489 different potential sectors of work, the 15 industries with the most solopreneurs are:
- Specialty trade contractors
- Retail trade
- Transportation and warehousing
- Real estate, rental, and leasing
- Professional scientific and technical services
- Administrative and support services
- Waste management and remediation services
- Services to buildings and dwellings
- Health care and social assistance
- Ambulatory health care services
- Arts, entertainment, and recreation
- Spectator sports and related industries
- Personal and laundry services
- Personal care services
Do any of these look appealing to you? Do you have experience in any of these areas? If so, this may be a good place to start.
If not, think about your interests, passions, and experience. Come up with some ideas that, preferably, incorporates all three.
Create a List of Possible Products and Services
Once you know what field you want to work in, the next step is to start thinking about the products and services you can offer that others would be willing to pay you for.
You may not be able to come up with a comprehensive list up front, and that’s okay. Realistically, the skills or items you offer will likely morph over time as you get more experience and learn more about what your target market wants and needs.
For instance, when I first started out, I knew that I wanted to write a book. So I did. After that, I decided that I also wanted to write for others, since that would help keep money coming in between book sales.
Initially, this involved providing blogs and articles that would be published by my clients on their websites. Then, as I became more comfortable with writing and gained more experience, I started adding other services such as ghostwriting, editing, content strategy development, program development, and more.
What types of things can you offer your future clients? Are these things items, services, or both? Can you create packages of goods or services, enabling you to reach customers who want these types of things at various price points?
Identify Your Differentiators
In addition to getting some idea of what products and/or services you want to sell, you also need to be able to answer the question of why others should buy from you versus making a purchase from all of the other product or service providers out there. In other words, what makes you different?
This is critical because the American Marketing Association reports that the average consumer sees up to 10,000 advertisements per day. What are you going to do to stand out?
If you have a new way of doing things or an innovative product that has never been seen, this is a good place to start. If you’re simply entering a field because you think you could do a good job for your clients, it might be slightly more difficult to convey why you’re the best choice.
One way to get over this hurdle is to take a look at your competitors’ online reviews—which you can do on sites like Yelp and Google—and see what their customers are saying about them. In addition to noting what these businesses are doing right, what are some of the chief complaints listed? Those are areas where you might be able to stand out.
For example, if one of your local competitors has a lot of reviews complaining about their customer service, this may be something you want to work on and promote. Look for holes that you’re able to fill.
Decide Your Business’ Structure
Before you open your doors and start selling, you’ll also want to decide what type of business you want to create. This will determine how you run your one-person company, what you need to do at tax time, and how much you’ll risk your personal assets working for yourself.
According to the SBA, some of the most common business structures include:
- Sole Proprietorship. You’re automatically a sole proprietor if you don’t register your business any other way. In this case, your personal assets and liabilities are not separated from those of your business, so the SBA indicates that this business structure works best for businesses that don’t have a lot of risk
- Limited Liability Corporation (LLC). If you want a little more protection of your personal assets, an LLC will provide it. That makes this option better for medium-to-high risk businesses. These structures are a bit more complicated than sole proprietorships because you must file paperwork to create them, but they also have a lower tax rate than a corporation.
- Corporations are considered legal entities that stand on their own, so they can be liable legally should something go wrong. These structures also cost more to create and you pay more in taxes than the other two options, but they offer the most protection to you personally. There are numerous types of corporations (C Corp, S Corp, etc.) from which you can choose based on your business goals.
These are very basic descriptions of what can sometimes be very complex structures, especially in the case of corporations. Therefore, it’s best to talk to a tax professional to discuss the best option for you given the type of business you want to create.
Create a Recordkeeping System
When you’re first starting out, it’s also important to create a recordkeeping system that enables you to keep up with all of your paperwork. Even if you plan to outsource some of these duties, you are ultimately responsible for making sure everything gets done, so it at least helps to know that types of things you want to keep track of.
Things that I’ve established recordkeeping systems for include:
- Project details (start and finish dates, incremental deadlines)
- Scheduling (to note meetings with contacts, deadlines, etc.)
- Client contact information (name, business, email, phone, etc.)
- Invoice details (when they’re sent, when they’re paid, reminders if they’re overdue)
- How much to set aside for taxes (ask your tax professional for this amount based on your location and income bracket)
- When taxes need to be paid (which is generally quarterly; again, consult with your tax professional for guidance in this area)
- Business expenses, separated by category (advertising, supplies, utilities, etc.)
- Equipment and supply maintenance schedules (budgeting for new devices, printer ink, etc.)
When creating your own list, your goal is to create a system for anything you don’t want to fall off your radar. This changes from business to business, so consider what you’ll be doing on a daily basis (using supplies and meeting with customers), as well as those obligations that come quarterly (like taxes) or even annually (such as website dues or adjusting your prices).
By setting up a good recordkeeping system right from the start, you’ll be able to keep better track of the things you need to run a more successful business.
Personally, I keep track of a lot of these things on Excel spreadsheets that I’ve created myself. However, there are some software programs out there that can help you keep all of this information too. Do what works best for you.
When you want to find a new business, where do you go to look for it? Online, right? Well, you’re not alone because BrightLocal’s 2018 Local Consumer Review Survey found that 86 percent of consumers will go online and read reviews for local businesses when deciding whether to use them. If you’re not there, you aren’t likely to be found.
Today, being online means having both a website and being active on social media. Regarding the website, you can either build your own using an online service or pay someone else to build it for you.
Personally, I chose to build my own, which I did using Wix. I didn’t have a lot of money first starting out and I didn’t mind learning how to put together a site. However, if this intimidates you, hiring it out may be money well spent, as your website is often your first impression and should look professional.
As far as what pages you need if you do it yourself, if you look at mine, you’ll see that I have tabs up top for a home page, writing and speaking pages where I list my services, a portfolio page with links to some of my works, customer testimonials, an about me page, and a contact page.
As far as social media is concerned, it’s easy to get overwhelmed by creating and managing business-based social media pages. This is especially true if you try to be active on numerous platforms. That’s why, unless you truly love social media and know how the various platforms work, I recommend starting with just one. Once you feel proficient with that, then you can move on to more if you wish.
At a minimum, you want to be on the social media platform your target market uses most. This makes it easier to connect with them. (If you’re not sure what platform this is, make contact with people in your target demographic and ask which social media they prefer.)
If you don’t like social media or don’t want to put in the time to learn it, you can also pay a person or company to take care of your business page for you. I know I would’ve loved this just starting out, but didn’t have the money, so I managed mine myself (and still do today).
The one word of advice I have when setting up your social media pages is to keep your business pages separate from your personal profiles. This keeps you from overwhelming friends and family with your business ventures (unless they like your page or follow you, of course), while also enabling you to post private family photos or updates without sharing them with all of the world.
When setting up both your website and social media pages, it also helps to think about what you want your brand to be. What colors do you want to use to signify your one-person business? What about a logo or graphics?
If you feel stuck in this area, ask yourself this: how do you want consumers to feel when they visit your online pages? Use your answer to help you create the ambience of your brand.
Whatever you decide you want your brand to look like, be consistent across all of your online profiles. This helps your customers instantly know that they’re looking at your business, whether they’re on your website, Facebook page, Twitter profile, or anyplace else.
Start Finding Clients
Now that your business is set up, it’s time to start getting work. Where do you find clients when you’re first starting out?
One option is to reach out to those you know who could potentially benefit from your products or services. I’m not suggesting that you try to sell to all of your friends and family (that doesn’t always go over well), but if you have people in your circle who you feel you can legitimately help, it doesn’t necessarily hurt to let them know what you have to offer.
Another option is to use a job platform in your field. When I first started out, there was a site called Elance where people could go online and post projects, enabling solopreneurs like me to bid for the job. Though this initially meant working for lower rates in order to stay competitive, I got a lot of experience and was able to build a portfolio that enabled me to start earning more.
If there’s nothing like this available to you, think about where your target market hangs out (both online and in person). These are good places to frequent yourself. Spend some time with the people you want to serve. Let them get to know, like, and trust you, as these are the three keys to true marketing success.
I’ve also found that sometimes just being helpful to others can lead into a sale. For instance, if someone has a question about content in an online forum or on their social media page, I will post an answer and then leave the door open by saying “If you have any more questions, let me know! I’d love to help you out in any way I can.”
This does a few things for me. First, it establishes my expertise in the advice that I provide. Second, it also lets them know I’m there if they need me in a non-pushy sort of way.
Let me be clear that all of these suggestions are things that have worked for me, so if you decide to do things another way, that doesn’t mean that it’s wrong. As is often said, “There’s more than one way to skin a cat.” Plus, it’s your business and you can start it any way you’d like!
In the meantime, if you have any questions about anything I’ve said here, let me know. I’d love to help you out in any way I can…