How to Start a One-Person Company: 3 Steps for Solopreneurs

Do you have a great idea for a business? Are you ready to get started except for that bit about knowing how to start?

According to business consultant Paul Jarvis, starting and building a one-person company entails three steps. He says that you must build your skill set so that you’re prepared to run your own business, set up a strong financial and legal foundation, and develop strong customer relationships.

Continue reading for details on how to start a one-person company.

Step #1: Build Your Skill Set

Jarvis’s advice on how to start a one-person company begins with a step you should take before you set up a legal entity: building your skill set. To be successfully independent, you have to be good enough to stand on your own. You can achieve this in a variety of ways, including working for a while at an existing company to gain experience, taking classes, or practicing skills on your own.

First, hone your knowledge and skill in the work that forms the core of what you want your one-person company to be. For example, consider the example of the business that offers online cooking classes—before you open such a company, you should learn from other chefs, practice your teaching skills as an instructor at an existing cooking school, and so on. This will give you credibility as an expert in your field and ensure that you can offer a quality product or service.

Second, acquire a broad understanding of administrative and practical business skills. As the owner of a one-person company, you’re responsible for every aspect of the business, so you need to have a working knowledge of many types of work outside of your core work. These include marketing, accounting, payroll, sales, project management, and more.

Different Paths for Skill-Building

If you choose to build your skills as an employee at an existing company, seek out chances to explore types of work that push you outside of your comfort zone. Instead of going for upward movement in one department, consider making lateral moves to related departments. This will help you expand your skill set and your knowledge of related fields. For example, if you normally work in marketing, you might take a job in customer service to learn about working with customers directly. Knowing more about different types of work in your field and how they interact will help you fill multiple roles in your business later on.

In addition, you could expand your skill set in your core work or in general business knowledge on your own by taking advantage of countless online resources. Coursera offers low-cost certificate courses from accredited universities that cover business topics like marketing, sales, accounting, and project management. LinkedIn Learning and Skillshare also offer courses that help with professional development along with more specific skills you could turn into a business, such as writing, graphic design, web design, and illustration.

Finally, reading regularly can help you improve your abilities in your core work and peripheral work. Research suggests that reading of all kinds improves communication skills, writing skills, critical thinking, and creativity—all necessary for the owner of a one-person company. Additionally, reading books written about your line of work can help you stay on top of new developments in your field.

According to Jarvis, getting the legal systems of your business in order from the start ensures you don’t get duped out of money you’re owed or get into trouble for operating illegally. We’ve organized Jarvis’s recommendations for protecting yourself legally into three steps.

Step #1: Set up your company as a legal entity separate from yourself. This would be an LLC in the United States. Your business makes money from your work, instead of you making it directly. You then pay yourself a salary from the business. This ensures that you aren’t personally liable if anything goes awry in your business. Rather, the business itself is liable.

(Shortform note: In addition to offering reduced liability, forming an LLC allows you to establish business credit. As a new business, you need to build credit to obtain financing and build credibility as you’re fostering relationships with vendors who sell you the resources you need. Likewise, LLCs experience fewer compliance regulations from states than sole proprietors or corporations. To establish an LLC, choose the state you want to form it in and choose a name. Then, choose a registered agent to receive important legal documents and tax notices on behalf of the LLC. Next, create an agreement between you and other members of the LLC for how the LLC will be operated. Finally, file your LLC documents with your state.)

Step #2: Create terms of service if you sell products, and create contracts if you offer a service. Customers have to agree to terms of service before buying your products. Likewise, clients have to sign a contract before you begin working with them. This creates transparency and offers protection for you, preventing customers and clients from neglecting to pay you or taking advantage of you in another way.

(Shortform note: In a legally binding fashion, terms of service for your product state how your product or service can be used. They protect your intellectual property and protect you from possible liabilities. Your terms of service should identify your business, describe your product or service, offer any relevant disclaimers and safety information, explain conditions and rights of use, and include any other necessary terms. Meanwhile, contracts outline the terms of an agreement between someone providing a service and someone requesting a service. They should state the scope of the work expected, the timeline for the services, how conflicts will be handled, the cost of the services, and any due dates for payments.)

Step #3: Contract a business lawyer to help you with the legal aspects of your company. An experienced lawyer will make sure that:

  1. Your contracts or terms of service are sound
  2. Your company is operating within the legal boundaries of your particular business and location
  3. You don’t make mistakes that lead to expensive lawsuits
How to Find the Right Business Lawyer

To find the right lawyer for your business, do thorough research and consult a variety of sources. Search online for lawyers with expertise in your business area, and look at reviews from past clients. Additionally, ask for referrals from other business owners—they can give you their honest experiences with their lawyers (how the lawyer solved conflicts, got their business through difficult situations, and so on).

Once you have a list of possibilities, interview prospective lawyers to assess their abilities and experience, communicate your goals for your business, and find out how they can help you achieve them.

In addition to helping you create contracts and operate lawfully, a lawyer can help you with patent applications. If you develop a new product or service, patents help you protect your intellectual property. However, the application process takes time and money, particularly when you try to do it yourself. Lawyers have the knowledge to get a patent application submitted and approved more quickly than you can. 

Step #3: Develop Strong Customer Relationships

Finally, Jarvis argues that it’s vital for a one-person company to foster strong connections with its customers. Since these companies aren’t receiving money from investors, they depend on customer relationships to sustain and grow their business. Here are two of Jarvis’s suggestions for having beneficial customer interactions.

Suggestion #1: Be an Educator

When you’re looking for prospective customers, Jarvis suggests playing the role of educator as a sales strategy. Teach people about your product or service, including how to use it so it best serves them.

Being an educator requires transparency, clearly demonstrating the strengths of your product or service. When you can show your product’s unique strengths, you’ll stand out against competitors.

Additionally, by acting as an educator for your product or service, you show customers that you’re the expert in your field, which builds trust. You’re the first person who comes to mind when they need whatever type of product or service you’re offering, and they’re more likely to buy from you.

To teach about your product or service, you might use social media, teach classes that show people how it works, and so on. For example, Toni Okamoto, founder of the website Plant-Based on a Budget, teaches people how to eat a healthy and affordable plant-based diet. Her website has hundreds of free recipes, she posts regularly about plant-based cooking on social media, she speaks about it on podcasts, and she offers a newsletter with recipes and tips.

Anyone can use these resources to learn about her methods and ideas. However, they also act as a sales pitch for her business, through which she sells meal plans and cookbooks and participates in speaking engagements. By giving her knowledge away freely and showing customers how they can be successful with her services, she builds trust and expertise. If people like her content, the free education entices them to invest in her brand further by purchasing her products.

Suggestion #2: Prioritize Quality Over Quantity

Jarvis argues that a one-person company should prioritize creating high-quality, long-term relationships with customers, rather than concentrating on acquiring a greater quantity of customers. This means focusing on providing the best quality service and products possible for each person you serve.

Jarvis argues that focusing on serving existing customers will help you maintain consistent revenue as loyal customers keep coming back. Owning a one-person company allows you to maintain strong, personal, and long-lasting relationships with customers because its small size means you have the time and capacity to focus on each individual’s needs.

Additionally, loyal customers become a cost-free part of your marketing strategy—if they’re satisfied with your services or products, they’ll likely recommend your company to their friends and family, which generates new business, money, and slow, sustainable growth.

How to Start a One-Person Company: 3 Steps for Solopreneurs

Elizabeth Whitworth

Elizabeth has a lifelong love of books. She devours nonfiction, especially in the areas of history, theology, and philosophy. A switch to audiobooks has kindled her enjoyment of well-narrated fiction, particularly Victorian and early 20th-century works. She appreciates idea-driven books—and a classic murder mystery now and then. Elizabeth has a blog and is writing a book about the beginning and the end of suffering.

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