Many successful businesses started as one-person operations. Whether you expect to add employees in the future or plan to stay solo, these tips will help you run your one-person business properly.
Choose the right form of business. A one-person business is usually treated as a sole proprietorship for legal and tax purposes. However, you can enjoy some legal and tax advantages by choosing a different form of business. Many entrepreneurs find that a limited liability corporation (LLC) is a good solution. An LLC protects your personal assets in case of any lawsuits or claims against your business. An LLC also allows you to claim business profits and losses on your personal tax returns, eliminating much of the paperwork and headaches involved with forming a regular corporation. Consult your lawyer in making your decision.
Write a business plan. Just because there’s only one of you doesn’t mean you can dispense with creating a business plan. Since your time and energy are so precious, it’s vitally important that you clearly plan your goals and how you will get there. Taking some time in the beginning to draft a business plan will save you time making decisions down the road. It will also help you foresee problems that might occur and plan how you will avoid or deal with them.
Create a business website. A website is the face of a business. For a one-person business, it’s essential to present the right professional image. If you want to create the illusion that you’re not just a one-person startup but a thriving, successful business, a business website can really help. You can include contact information for different departments within your business, such as customer service, sales, and accounting, to give the impression of size to build confidence among prospective customers.
Set up a business bank account. Paying your business expenses from your personal bank accounts is a recipe for trouble at tax time and can even cause legal problems with your LLC. Instead, open a separate business bank account, order business checks, and obtain at least one business credit card to pay your expenses. This makes record-keeping easier and helps prevent problems with the IRS.
Manage your time effectively. There are only 24 hours in a day—so make the most of them! Your business plan can be a good guide here. Break down the goals in your business plan into a series of small steps you must take to achieve them. By focusing on smaller tasks, your to-do list won’t seem so overwhelming, and you’ll make steady progress. If you still find yourself struggling to keep up, spend a week or so tracking how you actually spend your time each day. You’ll probably find at least a few hours of wasted time that could be spent on more productive tasks. Try to identify when you’re most and least energetic and, when possible, schedule your most important tasks when you’re at peak performance.
Tap into technology. Take advantage of the many small-business apps out there to help your business run smoothly and fit more into your day. For example, putting your business documents in the cloud means you can access them anywhere, any time instead of rushing back to the office. There are apps that help you do everything from tracking business expenses and generating invoices to signing documents and accepting payments from customers on your mobile device. Ask other entrepreneurs which tech tools they rely on, and set up systems to streamline your daily duties.
Get help. As soon as you can possibly afford it (and maybe even from the start of your business), enlist outside help to handle some of the tasks involved in your business. Which duties should you delegate? Two types: those that are low-value relative to time spent (such as sorting through email to find the important ones, scheduling meetings with prospects, or scanning and organizing documents), and those that you just aren’t good at (such as bookkeeping, designing a logo or managing SEO). When deciding what to delegate and how much to pay for it, you’ll need to have some idea of what your time is worth. For example, if you’re starting an IT business billing $100 an hour, it’s worth your time to pay someone $20 an hour to do bookkeeping. And you can always benefit from the free mentoring SCORE provides.
Operating a one-person business is challenging, but these strategies will help make it more rewarding.
This information was furnished by the Deluxe Corporation Foundation, which underwrites funding for the creation and implementation of a new program, the DELUXE/SCORE Success Advantage business mentoring methodology, which will support SCORE’s new business model. The program will provide specific training, templates, and processes that SCORE mentors can use to help aspiring entrepreneurs start new businesses.