I’m still not sure how I feel about these made-up words like solopreneur, but they seem to be common so I’m doing my best to embrace them. I think the word entrepreneur has been overused to the point it hass lost its original meaning. Everyone is some kind of preneur these days. But I get the sentiment and this episode isn’t to challenge what’s appropriate in the preneur space. It’s about what it takes to be a solopreneur, or a single person business.
The most common comment I get in my business sessions is “I don’t know what I don’t know.” It’s coming from people who are wanting to start their businesses but aren’t quite sure where to start. They often already have full-time job jobs and would like to leave them but how do you know when it’s the right time? If it’s the right decision? How do they know they won’t mess it up and regret the decision?
Starting Your Business
The thing is, there never really is a “right” time. It’s all about choices and how hard you’re willing to work to make it work, if self-employment is actually what you want. It’s good to arm yourself with information, but not to overwhelm yourself so much you get stuck and don’t make any progress at all.
To me, the biggest thing to keep in mind is that, no matter what service or product you’ll be providing, you will be running a business. You have to stay in that mindset. Even if you don’t consider yourself to be a “business-y” person, there are certain things you’re going to have to do. So here is a quick Intro to Solopreneurship.
First, form your business. Pick a name, get your licenses, define your services, and start offering them. Don’t spend too much time worrying about whether you need an LLC or not. You will not find the answer by Googling because it depends on a lot of personal factors. So if you want to save a lot of time and confusion, discuss it with your accountant to see if it’s the right choice for you. Otherwise, you can start as a sole proprietor and change it later if it makes sense.
Second, set up your accounts. As soon as possible, you want to open separate bank accounts so you aren’t mixing your business and personal funds. It’s a huge red flag to the IRS if you don’t have that separation and can hurt you when it comes to business deductions. All business income should go into those accounts and all business expenses should come out of those accounts. It doesn’t mean you can’t transfer your money to or from your personal accounts as needed, but you need to show that paper trail of it flowing through the business account first.
If you end up setting up or filing as an S Corp, keep in mind that how you withdraw money is going to be different than if you’re a sole proprietor or single member LLC, so make sure to discuss that with your accountant in that case.
After you’ve done those two things, you’re running a business. Congratulations!
Wearing All the Hats
So then what? Now you get to work. And as a single-person business, that means you’re wearing a lot of hats, so it becomes a balancing act of getting all the things done. It can feel like a lot in the beginning, but you’ll get in a rhythm as you go. You’ll figure out your systems, how to make the most of your time, and which things are worth outsourcing so you don’t have to deal with them.
Bookkeeping
One of the most important, and most people’s least favorite hats, is the bookkeeper hat. You can’t get around it. You’re going to make and spend money and there’s this lovely agency called the IRS that needs to know about it. It’s so important to stay on top of your money. Not just for taxes but for your own decision-making, too. I’ve talked about this a lot and will surely continue to talk about it in other episodes, but for this one I’ll keep it simple. Get your bookkeeping in order as soon as possible, ideally from the time you start your business. If the monthly subscription cost of some of the accounting software out there scares you, check out Wave Apps. It’s free and has all the function you need to keep your financials organized. I have no affiliation with Wave Apps, but I recommend it to a lot of people because it’s hard to argue with a zero-dollar price tag.
Marketing & Sales
As a single person business, you’ll also be responsible for your own marketing and sales, too. That looks different for every business, but you usually need to make some effort towards getting new clients, maintaining relationships with existing clients, networking, and all that fun stuff that ensures you always have people needing your services. It’s easy to forget about that part when you’re busy and have all the work you need in the moment, but you don’t want to ignore it completely and end up in a place where the jobs have ended and now you have nothing lined up because you didn’t talk to anybody because you were too busy. It’s a cycle I’ve witnessed too many times. Maintaining your business is good. Growing it is better. Keeping up with your sales and marketing helps ensure you have a steady stream of work coming your way, and that’s a big part of earning that freedom we all love so much – the freedom that allows us to choose which projects we want to work on and which people we want to work with. You never want to get stuck accepting a job that doesn’t align with what you want to be doing because you need the paycheck.
Social Media
And along the lines with marketing and sales, is social media. These all kind of blend together, but each has its purpose. Social media can be used with different strategies. If you do it right, it can be really effective in getting you more business. Sometimes it helps you connect with new people and make new working relationships. Other times it’s just about staying connected so people don’t forget you’re out there. Some people avoid it completely, which is always an option, but I think we live in a time where we have to have some presence online, even if we aren’t posting every day. I’ve mentioned many times that I’m no expert in social media and could definitely utilize it more, but I’ve never prioritized it. I post more about this podcast than I do the actual work I’m doing. It’s a work in progress for me. Maybe I’ll figure it out eventually. Who knows.
Admin
Then there’s the part that probably gives bookkeeping its biggest competition for most hated hat, and that’s admin work. All that other stuff you have to do to run your business but you probably don’t love doing. Scanning receipts, filing important documents, checking your PO Box, responding to emails, ordering office supplies, scheduling meetings, renewing licenses, payroll, all kinds of things that you now get to do as a business owner. You don’t want to get behind on that stuff because even though it’s usually just a few little things here and there, the more those little things pile up the more it can seem overwhelming and stress you out more than it needs to. Take a few minutes every day or every week and try to catch up before you get too far behind.
Your Actual Service
And let’s not forget, you’re doing the actual service. You know, the thing you actually do for your business that people actually pay you for doing? Yeah, that. That probably takes up most of your time and deserves a lot of your focus. Just be careful not to give it so much time that you fall short on the other parts of running your business, or that you end up getting burnt out and don’t want to do it at all. Balance, right? It’s always about balance.
Outsourcing
At some point, you’ll probably want to hire someone else to do some of these things so you can focus on the work that actually makes you money. But where do you even start with that? The best things to outsource are the things you don’t like doing or aren’t great at doing. If you cringe every time you open Quickbooks, you might want to pay someone else to do your bookkeeping. Or if you know it takes you a long time to create content, it might be best to let someone else do that for you. Before you say, “but I can’t afford to hire someone,” think about the value of time. If you freed up that time you’re spending doing the things you don’t like, could you use that to make more money?
For example, say your admin work takes you 5 hours a week. That’s 5 hours doing tasks you don’t enjoy and don’t bring you more income. If you were to hire a virtual assistant, chances are that person is going to be more efficient at those tasks and maybe it only takes 3 hours a week. If you’re paying that person $25/hour, that’s $75 per week. But you’re getting 5 hours back, which I’m pretty sure is worth more than $75, right?
See? I told you this would be quick lesson. The reason I do these short podcast episodes is because most of you listening are solopreneurs, too, and don’t have a lot of time. So thank you for spending a few minutes with me. Now, go run your business.