Building a Successful One-Person Business
Not every business is a great fit for solo entrepreneurs or small teams. Some are really tough to grow when you’re the only one running the show. So, how do you pick a business that can flourish when it’s just you or a small crew?
Understanding the kinds of businesses that work well for solo entrepreneurs can save you years of struggle. Knowing which markets are friendly to small, self-funded businesses can turn your journey to success from taking years to just months.
Sadly, I had to learn this lesson the hard way for over a decade. And every day, I see folks making the same blunders, often because we tend to follow in the big companies’ footsteps.
Here’s the secret: Don’t aim to be huge. Aim to be small.
These giants have a few things in common:
- They need a massive customer base.
- They mostly cater to individual consumers.
- They offer low prices or even free services.
- They operate in huge markets.
- They have lots of cash to spend.
But don’t fret! As a small business, we can create a unique offering that doesn’t rely on these factors and is much more likely to thrive.
Let’s dive in.
6 Strategies for Building a Successful One-Person Business
Here’s a step-by-step guide on how to make it happen.
1. Avoid businesses that require scale
When starting on your entrepreneurial journey as a solo founder or a small team, it’s crucial to avoid businesses that require massive scale to succeed.
Large-scale operations often demand substantial resources, which may not be readily available to smaller ventures.
Consider my personal experience with a job listing directory startup that aimed to replicate the success of Brighter Monday and ZoomTanzania in the employment industry. The decision to target the entire Tanzanian employment market proved to be overly ambitious.
The need for extensive network effects and a massive user base made it nearly impossible to gain traction without a substantial budget.
As a result, I had to continuously narrow down the focus of the business to find a niche where network effects could work, which proved unsuccessful in the end.
The lesson here is to think small and focus on niche markets. By doing so, you can create a business that doesn’t rely on massive scale for success.
Identify a niche with untapped potential where you can be the dominant player, just like a big fish in a small pond.
2. Avoid Low Pricing Models
The other thing to avoid is charging low prices. Why? Because getting customers is hard! Sales and marketing are both major time drains, and you can’t spend all your time doing them. If you’re charging low prices, you’ll need to attract a lot of customers to make a decent living. Instead, focus on offering a high-value product or service that you can charge a premium for.
Consider alternatives to the typical subscription model with Netflix-style pricing, such as charging higher prices for B2B services.
By securing a single B2B client willing to pay a premium for your offerings, you can achieve higher revenue with lower customer acquisition costs and minimal churn.
This approach allows you to maximize your product price and reduce the time spent on attracting customers, a crucial benefit for solo founders.
3. Target Business Clients
One effective way to sidestep the challenges of scale and low prices is to shift your focus from consumers to businesses. Unlike consumers, businesses are more inclined to invest in products or services that contribute to their growth.
They allocate budgets for various purposes, including training, marketing, and operational improvements, making them ideal clients for your business.
Businesses are often eager to spend money on solutions that can help them increase revenue, reduce expenses, or improve efficiency.
Additionally, within an organization, specific roles or departments are responsible for making purchasing decisions. This makes it easier for you to identify decision-makers and target them directly, a luxury not typically available when targeting consumers.
Here are a couple of examples of the difference between consumer and business mentalities with spending:
- X Premium (Twitter Blue), a paid feature on X formerly known as Twitter, made regular users upset when they started charging $8 per month. But when they charged organizations $1,000 a month for the same thing, businesses were okay with it.
- Gmail, a widely used email service, would lose most of its users if they charged $1 per month. However, Superhuman Email, which is mainly for businesses, charged $30 per month and did really well. People usually expect email to be free, but Superhuman’s great features helped business users save time and make more money.
So, if you’re running a business by yourself, you should focus on getting customers efficiently (because it’s just you) and charging a higher price for your product. Selling to other businesses can help you do both of these things.
4. Choose a Niche Market
Selecting the right market for your one-person business is a critical decision. The size of the market directly impacts the level of competition you’ll face.
In essence, it’s better to be a big fish in a small pond than a tiny fish lost in the vast ocean.
For example, if you were to start a web design agency, instead of being a general web design agency, start a web agency targeting logistics companies within a specific area.
Here is another example: if you were to start a generic sports shoe brand, you’d be competing with industry giants like Nike and Adidas. However, if you niche down and specialize in a specific market, like pickleball shoes, you become the dominant player in that niche. By catering to a smaller market with specific needs, you can establish a strong foothold and excel in your chosen niche.
5. Embrace the use of Digital Marketing
Harness the power of digital marketing to reach your target audience effectively.
Imagine you have a business, and you want more people to know about it and buy your products or services. Well, that’s where digital marketing comes in, and it’s like having a superpower for your business.
Invest in content marketing, social media, and SEO to connect with potential customers who share an interest in your niche.
It’s like turning on a spotlight for your business in the online world, and it can help you grow and succeed.
6. Stay Agile and Adapt
Flexibility is key to success in small businesses. Stay agile and be ready to adapt to changing market conditions and customer preferences. Being nimble allows you to pivot quickly and stay ahead of the competition.
Here are some additional tips for building a better one-person business.
In conclusion, building a successful one-person business requires careful planning and strategic decision-making.
Remember that, as a solo founder, your ability to adapt and focus on strategies tailored to your strengths is your greatest asset.
Building a successful one-person business is not easy, but it is possible. By avoiding the mistakes above and following the tips above, you can increase your chances of success.
FAQs (Frequently Asked Questions)
- Can any business be successful with a small team or solo founder? While it’s possible for any business to succeed under these conditions, some are inherently more suitable due to factors like market size and scalability.
- How can I find the right niche market for my business? Research your interests, passions, and areas of expertise. Look for market gaps or underserved segments that align with your skills.
- Is it essential to offer lower prices to succeed as a small business? No, it’s not necessary to compete solely on price. Focus on delivering unique value and personalized solutions to justify your pricing.
- What digital marketing strategies work best for small businesses? Content marketing, social media engagement, and search engine optimization (SEO) are effective strategies for reaching and engaging your target audience.
- How can I adapt to changing market conditions as a small business owner? Stay informed, be open to change, and continuously monitor market trends and customer feedback. Adapt your strategies accordingly to remain competitive.