At first glance, being a sole proprietor sounds like a pretty nice gig. There's no boss to answer to, but no employees to answer to, either. You are in complete control of your clients and work, and the only limits are your own time and creativity.
But flying solo isn't without its challenges — you need to be especially driven and motivated to succeed as a business of one. Here are four of the biggest business challenges you'll face as a "solopreneur," and how to overcome them.
It's more overwhelming. Like any business owner, sole proprietors must find a steady stream of clients or customers and deliver a consistent, high-quality product. The difference is, they have to do it all on their own.
"This unique perspective means that [sole proprietors] must be even more efficient when it comes to running a business," said Donovan Janus, CEO and co-founder of self-employed business solutions provider 17hats. "From tasks such as invoicing and tax preparation, to project management, client correspondence and so much more, this group is at a greater risk of being overwhelmed."
Solopreneurs must recognize when they need to rely on help, Janus said, whether that means finding a mentor, investing in technology or training, or letting go of any areas where they are overextended.[Want to Be a Full-Time Freelancer? What You Need to Know]
There's no built-in support system. The old saying "It's lonely at the top" is often used to describe busy, overworked individuals in the C-suite who feel out of touch with their lower-level staff. This adage also rings true for sole proprietors, though it means something a little different for them.
Solopreneurs always have huge challenges to overcome, and most of them involve being in the business on their own, said David Goldin, president and CEO of business financing provider Capify (formerly AmeriMerchant). "They have no other executives who also share the same drive needed to make the business succeed, no one they can bounce ideas off of and to reach out to for advice or help," Goldin said.
As Janus recommended, seeking out a professional mentor, or even joining an online community, can help sole proprietors find the support and connection they're missing in their day-to-day business operations.
Appropriate tech tools are harder to find. Technology is essential for just about all business owners, but it's especially important for solopreneurs. The right business apps and tech tools can help an entrepreneur manage everything from finances to customer relationship management. A business owner with employees can consult a tech-savvy staff member or hire an IT consultant to find, install and provide training for software, but as a sole proprietor, you're more or less on your own, Janus said.
Finding the right tools for your one-person company can be especially difficult because most business software is designed for multiemployee organizations, not single users. You'll have to spend some of your time researching, reading reviews and signing up for demos to track down a product that's just right for your personal business needs.
It's tough to keep up. Though corporate hierarchies and procedures can sometimes slow things down at larger companies, there is strength in numbers, especially at the startup and small business level. A team of five people all working at the same pace toward the same goal can accomplish a task much faster than one person working alone can. Survival depends on your ability to adapt and, eventually, make the decision to hire outside help.
"Solopreneurs have to realize that a one-person company can't [indefinitely] keep up with businesses that have multiple employees," Goldin told Business News Daily. "The world moves so quickly today, and [sole proprietors] will have to think about how to evolve their business and potentially bring on more employees and a management team."
Despite these challenges, being a sole proprietor does have its advantages, some of which can even help you overcome your biggest obstacles. Goldin noted that these entrepreneurs can execute tasks more quickly than other small businesses, as they don't have to wait for other stakeholders to make decisions and take action. Janus agreed, adding that solopreneurs are also more likely to take smart risks and seize opportunities that they might not otherwise be able to if they had employees or an executive team.
"They are less afraid of failure than many who prefer to play it safe," Janus said. "They are free to act without fear, as they themselves are solely responsible for the outcome."
No matter what industry they're in, it's most important for sole proprietors to be organized and efficient in order to succeed.
"Lost time due to missing materials doesn't only take its toll on one's schedule," Janus said. "It can result in lost sales and missed opportunities for business growth."
To learn more about the legal and financial implications of sole proprietorship, read this Business News Daily piece on the pros and cons of starting a solo business.