How to Start and Run a One-Person Business

Starting a business is complicated, but starting and running a one-person business can be especially daunting. While it means you won’t have a team to support your goals or the luxury of delegating, becoming a motivated entrepreneur is a chance to combine passion and effort to create something great and realize your dreams. 

However, building a profitable one-person business can be a challenge. You’ll face countless business and personal obstacles alone while forging ahead with your company’s development and growth.

We’ll explore expert advice for starting and running a one-person business and share business ideas and success stories for inspiration.

Tip

Before starting your own company, make sure you know the ABCs of running your own business.

How to start a one-person business

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

1. 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. If you develop a client base over a year or two while also working a full-time job, 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 lessen 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 bring you clarity about 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 right career change for you, and you can move on to something else. 

Did You Know?

Many retirees turn to one-person businesses to make money in retirement and turn their hobbies into successful ventures.

2. 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, allowing 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 an LLC, to protect your interests. “I would advise forming an LLC or incorporating the business,” said Deborah Sweeney, former CEO of MyCorporation. 

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 a limited liability company (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 different business structures. If you think your business might face lawsuits, incorporating the business may be best. 

For example, if you form a one-person company that helps other businesses collect debts, you might 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.

Tip

If you operate as a sole proprietor, you need to understand your self-employed tax benefits and deductions, as well as how and when to file taxes.

3. Prioritize your tasks to succeed as a one-person business.

Time management is critical when running a one-person business. Without delegating to employees, one-person businesses must stay on task so they don’t get overwhelmed. Here’s some time-management advice for one-person businesses. 

• Prioritize your workday. If you’re only spending 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 major 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 advises 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. By setting goals and holding yourself accountable, you give yourself 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. Hiring freelancers helps your operation grow, makes achieving your long-term goals more realistic, and allows 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 who 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.”

FYI

To make your business more organized, block out times for various jobs. Pay attention to when you’re most productive, and direct your best energy toward your most critical tasks.

4. Build a community of supporters for your one-person business.

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. Get in touch with 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 with others and build a community of supporters, it’s essential to 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.”

Did You Know?

Financial support is as crucial as a support community. If you need funding for your one-person business, consider government loans for entrepreneurs and SBA and alternative loans.

5. Understand your one-person business’s 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 business 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.”

FYI

Smart hiring practices can help take your one-person business to new heights. Give yourself time to create a hiring plan, consider job descriptions carefully, and attract top talent with desired perks like flexibility.

Quick tips for forming a one-person business

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, including meeting with small business development center counselors in your local area. 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.
• 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 businesses take time to develop.

One-person business ideas

Just because you want to run a one-person business doesn’t mean you know what kind of business you want to launch. Try one of the following business ideas to easily and (hopefully) successfully go it alone.

1. Blogger or content writer. Companies of all stripes frequently need help with writing. Whether you’re creating blog posts, website copy or even articles on prestigious websites, you can easily turn writing into a one-person business — just ensure your editing and proofreading skills are up to snuff.
2. Real estate agent. Especially in big cities, qualifying to broker deals between landlords and tenants (or banks and homeowners) requires relatively few steps. And there’s no shortage of clients, either, as people are always looking for places to live, and property owners and banks are always looking for prospective buyers. You can be the bridge between them without a team around you.
3. Tutor. If you have ample knowledge in a specific field, you can launch a one-person business as a tutor in that specialty. Post your services to classified ad websites or social media groups. College students, parents and others who want to learn might flock to you. Plus, even relatively inexperienced tutors can charge hourly rates that rival standard full-time salaries.
4. Driver. If you have a car and the schedule flexibility to take people (or objects) wherever, whenever, try being a driver. Whether your one-person driving business is geared toward people who need personal transportation or help with delivery, you only need a car — no co-workers — to get the job done.
5. Dog walker or dog sitter. While not necessarily the highest-earning of these ideas, a dog-walking or dog-sitting business is convenient. For dog walking, your client base can comprise your neighbors, family, and friends. You can charge substantially more for dog sitting and usually do other work while you dog sit — even starting and running another one-person business.

Tip

It’s crucial to think about your retirement when you own a one-person business. Consider setting up a solo 401(k) to get the benefits of an employer-sponsored 401(k) plan and a self-employed IRA.

Examples of successful one-person businesses

You may also find inspiration by learning about some leading companies that first began as one-person businesses. These are some of the top names: 

• Urban Dictionary. The internet’s go-to spot for defining slang started as Aaron Peckham’s one-person business in 1999 while he was in college.
• DuckDuckGo. Privacy-first web browser DuckDuckGo is the invention of Gabriel Weinberg, who founded it alone in 2008.
• Under Armour. Kevin Plank created his ideal athletic undershirt in 1996 and turned his invention into a one-person business. Within two years, he had expanded into a warehouse and headquarters.
• eBay. One of the internet’s most popular buying and selling websites was once just a one-person business. In the beginning, eBay founder Pierre Omidyar was the company’s only employee.
• Amazon. Amazon is inarguably the most famous example of a one-person business that became a massive mega-corporation. Jeff Bezos launched it by himself in 1994, and in the years since, he has become the world’s richest person.

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