You own your own small business. You work only for yourself and your customers. You have complete control over your product or service, message, marketing, taxes, salary, time. But can you truly make money?
A lot of people do it. According to the United States Census Bureau, the majority of all business establishments in the United States are nonemployers–businesses that are subject to federal income tax, but who have no paid employees. Most nonemployers are self-employed individuals operating a sole proprietorship or an unincorporated business.
Despite the nonemployer prevalence in the U.S., these businesses have the smallest economic impact on the country, averaging less than 4 percent of all sales and receipts nationally. That’s because many of these are side-gig-type businesses, while the business owner toils away at a traditional full-time job.
Yet stories of million-dollar one-person businesses are out there. Driving those successes reports Forbes, is the internet, growing at a rate that allows entrepreneurs a global marketplace from their own kitchen table. Providing expertise, value, and personal attention to customers does not take an army if you have the right product, ingenuity, tools, and reach–and technology has made that much more possible.
The numbers point to struggle
One Entrepreneur contributor wrote about his experience providing computer services as a one-man gig, noting that he worked a lot of hours, but didn’t make money. It wasn’t until he hired a staff to do the work he was doing, that he started to reap the rewards. He breaks down the math this way:
A freelance rate of $100 an hour equals $5,000 in a 50-hour week. That translates to $20,000 a month, $240,000 a year. However, reality and deductions set in. Not all of those 50 hours are billable because as a sole proprietor, you’re also spending time completing your administrative work, paperwork, marketing, and new lead sourcing.
Then consider your expenses, including supplies, subscriptions, rent, utilities, transportation–even if you work from home and keep your overhead low, there are still expenses associated with running a business. Additionally, there are federal, state, local taxes taking another chunk out of your earnings. So while you can make a living on your own, your likelihood of getting rich is low.
Tips for making it work
The lure of autonomy is enough for millions to launch their own businesses, however; and it’s clear by the numbers that a lot of us are giving it a try. Provided you start with a solid idea and plan, there are ways to maximize your time, resources, and effort to also maximize your income.
Automate. You might not employ people, but you can employ technology to get a lot of your work done. From automated e-mail and text responses to social media management tools and data management software, you can put automation to work for you. Naturally, finding the right automation tools requires your time (which is money), and money. But over time, your time spent on billable tasks will reward you.
Stay small. This seems counterintuitive to building a business. But if you want to remain a sole proprietor, your best bet is to develop a niche and stick to it. Do one thing extraordinarily well, and be invaluable to a small number of clients. The downside, of course, is if you lose a regular, repeat client, you face potential struggle until you’ve found more work.
Use social media, but focus on one or two platforms. Scaling down on your online presence may seem scary, but putting the majority of your marketing efforts into one or two platforms that best suit your operations and reach your audience means you deliver the most meaningful content to your followers. An automation tool, like Hootsuite, can help fan your message across multiple platforms, but keep your focus to one or two.
Fight against isolation. If you haven’t gotten out of your fleece pajama pants in days, and the only face-to-face you’ve had is via a computer screen, you’re putting yourself in danger. Remain a part of the real world through networking and joining organizations that promote your goals. It may cut into your billable time, but balance is important.
Whether your one-person gig keeps you floating, or makes you a millionaire is up to you, but also up to the economy, the market, and the ultimate whim of consumers. Does your self-owned business make money? What’s your best tip?