How to Run a Successful One-Person Business

Roadmap for one-person businesses: step-by-step guidance

We gathered tips and advice from successful self-owned business entrepreneurs to help you start your solo venture. While every entrepreneur and business is different, many pointers will likely apply.

Start your self-owned business on the side.

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:

• You’ll keep a primary income source as long as possible. Starting your business as a side hustle lets you keep a steady income source and save money while gaining customers and traction. By the time you quit your day job for your startup, you’ll have enough money saved to minimize startup costs and make it through the challenging early days.
• You’ll set up your business for success. Starting on the side also sets you up for success when you leave your current situation. Develop a client base over a year or two while also working a full-time job. This way, you’ll bring in money on the side and be ready to grow an already-established brand once you take the venture full time. Getting a head start can help you overcome the challenges of starting a business and reduce stress levels.
• You may realize the venture isn’t for you. Starting your business as a side hustle may also help clarify the venture. Maybe you’ll encounter unexpected challenges you’re not interested in overcoming. After a few months of pursuing the business idea, you may decide it’s not the correct career change for you. Then, you can move on to something else.

Find the right business structure for your one-person business.

Considering the best legal entity type for your business is crucial.

Sole proprietorships vs. incorporating

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:

• Sole proprietorships offer flexibility. Sole proprietorships give you enormous flexibility; they allow you to be an independent contractor or operate a small business in a more traditional sense. For example, if you want to become a freelancer who writes marketing copy for businesses, a sole proprietorship is the logical choice.
• Sole proprietorships can introduce risks. Sole proprietors are responsible for all the company’s profits and debts. This can become an issue as your business expands. If you’re involved in a business lawsuit, your assets are on the line. You can be held responsible instead of the business entity. Potential lawsuits become more relevant the more customers you serve.

Some experts recommend forming a corporation, such as a limited liability company (LLC), to protect your interests. “I would advise forming an LLC or incorporating the business,” said Deborah Sweeney, president and general manager of online acquisitions and financial solutions at Deluxe Corporation.

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 an 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.”

Consider your business type when deciding on a legal structure.

Different business ideas lend themselves to various business structures. Incorporating your business may be best if you think your business might face lawsuits.

For example, forming a one-person company that helps other businesses collect debts. Such a venture could be more likely to face legal ramifications than an e-commerce business selling art.

Your business structure can evolve.

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.

Reality check: hard truths of going solo

Going solo isn’t always easy, and it won’t be a successful experience for everyone. Learning these hard truths will help you set realistic expectations as you start your business.

Growth limitations

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 company 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.”

Revenue expectations

Revenue expectations for solo entrepreneurs are modest. Solo entrepreneurs earn an average of $49,489 per year, with 78 percent of solo businesses making less than $50,000. Only 0.2 percent of solo businesses generate more than one million dollars. Understanding these financial realities helps set realistic expectations as you plan your one-person venture.

Launch smart: lean planning and legal setup

When forming a one-person business, consider the following:

• Write a business plan. Get your ideas on paper and plan your strategy. Identify your target audience and how you’ll market to them. What value do you provide in the industry? Don’t go into a new business venture blind. Set up a plan of attack for the best chance of success.
• Meet with a business adviser. There are many ways to find business advisers; such methods include meeting with small business development center counselors in your local area or getting paired with a free SCORE mentor. Talking to an adviser can give you guidance on how to start your business. Advisers are especially helpful if you don’t have a team of knowledgeable peers to bounce ideas off.
• Research business bank accounts and credit cards. There are many unexpected costs when starting a business. Keeping your company financial records separate from your personal expenses can make your daily business tasks and taxes more organized. Consider applying for a business credit card to pay for expenses. A credit card provides statements that quickly itemize monthly costs, gives you additional time to pay your balance and may offer bonus rewards.
• Get the help you need ASAP. If you want to focus on growing your business, there are not enough hours in the day for you to effectively manage customer service, shipping, social media, etc. Add team members when financially feasible and utilize tech and apps when short on cash.
• Be patient. A one-person operation will likely grow slower than a business with a team of multiple people. Stay the course and keep moving forward. The most successful one-person companies take time to develop.

Software and tools: Digital tools and resources

The business.com team invests thousands of hours evaluating hundreds of software and tools to help business owners manage and run their companies. Please review some of our comprehensive guides for solutions to help you grow your business.

• Accounting and invoicing software: Investing in accounting software can reduce human error. It can also increase tax compliance and improve efficiency since it integrates with other business software. Check out our top options for accounting and invoice-generating software.
• CRM system: The best CRM software can automate daily business tasks, manage leads, increase sales and boost productivity.
• Business loans: Taking out your first business loan can be daunting, but scaling your company is necessary for longevity. Check out our best business loan and financing options.
• Completing transactions: There are so many top options for point-of-sale (POS) systems that it can be hard to choose. So, we’ve broken down everything you need to know.
• Payment processing: Review the best options for credit card processors and find a solution that fits your business.
• Websites: You don’t need a background in technology to choose a web hosting solution for your business. Check out our best picks for website builders and design services so you can create a consistent online brand with an easy-to-use site that engages customers.
• Email marketing services: Building an email list can help you segment your customers and drive traffic to your website. Email marketing is effective and affordable. Take a look at our best picks for email marketing services.
• Text message marketing services: Text messaging can segment customers, communicate in real time and streamline customer service. Review the top-rated text messaging marketing services.
• Payroll/HR: Selecting the right HR solutions, such as highly rated small business payroll and top PEO services, doesn’t need to be difficult.

Tips and tactics: time management strategies

Time management is critical when running a one-person business. Without delegating to employees, one-person companies must stay on task so they don’t get overwhelmed. Here are some time-management tactics to succeed as a one-person business.

Prioritize your workday. 

If you spend only two to four hours daily on your business, don’t waste too much time checking emails or performing tedious tasks. You want to make substantial progress on significant projects. “My main piece of advice is that you have to prioritize your day and your schedule,” said Mark Aselstine, founder of Uncorked Ventures. “You’re going to get pulled in literally every direction, and emails, phone calls and text messages all seem incredibly important, and everyone wants an immediate response. But, ask yourself, do they actually require one?” Aselstine advised time-blocking to focus on your business’s long-term health.

Set goals and hold yourself accountable. 

To stay on track, set business goals months in advance. If you’re starting from scratch, set target dates for creating an online presence, such as building a website and establishing social media accounts. Setting goals and holding yourself accountable gives you something to work toward. “I work in 90-day cycles,” said Isabelle Paquin, a Pinterest marketing strategist. “Each quarter, I establish goals and two or three projects I’ll be focusing on. Then, it’s a matter of having the discipline to put blindfolds on and focus on implementation excellence.”

Don’t go it entirely alone. 

Running a one-person business doesn’t mean help is off the table. There are many benefits to hiring freelancers. They help your operation grow, make achieving your long-term goals more realistic and allow you to focus on other aspects of your business. “My advice to someone starting out is to know what you don’t know and surround yourself with great people [like] other small businesses and independent contractors who can provide the services that you can’t,” said Diane Jones, president of DJ Public Relations. “For example, I am a public relations professional that offers a variety of services, including website development, graphic design and video production. However, I personally don’t do all those things. I work with an amazing website developer and graphic designer and a video production company that creates the final product while I manage the process. It’s a win-win for both of us, and the client ends up with the product they want.”

Mindset and resilience: coping with challenges and staying motivated

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.

• Network on LinkedIn. Networking on LinkedIn is a way to connect with people in your industry whom you could see yourself working with in the future. There are numerous groups to join where you can participate in discussions, answer questions that showcase your expertise and share relevant content.
• Reach out to local peers. Contact local business owners and entrepreneurs, even if they aren’t running a one-person show. Speaking to experienced business people in your area will build connections and give you a network of people you can turn to for advice. You can also share your advice and perspective with them, making it a beneficial two-way relationship.
• Attend SBA events. The Small Business Administration (SBA) hosts regional events throughout the year. Search for events in your area and attend the ones that interest you the most. You’ll meet other people in your area who are also building businesses and experiencing the same highs and lows. You’ll increase your network and learn during the events — many of which are free.

Regardless of how you connect and build a community of supporters, you must 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.”

One-person business startup checklist

Julie Thompson and Max Freedman contributed to this article. Some source interviews were conducted for a previous version of this article.