How To Manage A One-Person Business
Running a business alone can be backbreaking. As a solo entrepreneur, you are required to juggle several roles, often without anyone to take the load off you. This is hard on the body, the mind and the pocket, and many one-person businesses crash even before they've really taken off. For would-be solo entrepreneurs who cannot wait to start their business and those who have already begun their entrepreneurial journey, here's a survival guide to run with.
1. Separate your personal and business accounts.
With a one-person business, the lines between personal and business finances tend to blur but you must draw them boldly. First, open a business account and get a bank card to go with it. This is vital for diligent accounting and tax payment. Next, keep an up-to-date record of personal expenses incurred on behalf of your business so you know where your money is going. Spendee is an app that will come in handy. And perhaps most importantly, always make purchases for your business in the name of the business. This applies particularly to assets which can be liquidated in the event of bankruptcy. By separating personal assets from business-owned assets, you'll be protecting yourself from losing your money if things don't go as planned for your venture.
2. Keep both eyes on your cash flow.
One minute you're swimming in money, the next you're standing in the middle of a desert wondering how things got so dry. Many solo entrepreneurs have found themselves in this very uncomfortable position and they often got there because they were not paying attention to their cash flow. Be sure you're making revenue consistently and always put some cash away. Profit might not be through the roof yet, but your business will be in a favourable position for growth if revenue is constant.
3. Be accountable to yourself.
When a business is solely yours, who do you answer to? Yourself. Few things demand greater responsibility and self-discipline than carrying your business on your back. You must hold yourself accountable for everything, from how you spend money to how you spend your time.
You will need to make a budget and follow it as closely as possible. This means that you cannot afford to take liberties with business cash just because there's no one to question your spending habit. Borrowing from your business for personal use is not smart. Don't do it.
About time, you will always have a lot to do so you must manage your hours with ruthless efficiency. Schedule everything that can be scheduled and stick to your program even when supposedly important things threaten to derail your order of priority. If it's not urgent, it can wait.
4. Keep your business on a lean diet.
Your one-person operation can be remarkably efficient if you make the best use of limited resources and keep your expenses low. Basically, you must grow your business in stages, using what you have to get where you want to be. Live by these ten principles:
ii. If it's not absolutely necessary, don't pay for it.
iii. Don't make long-term decisions based on short-term gains.
iv. There's a less expensive options for many things. Find it.
v. Explore the barter option. Trade your product or service for a service you need.
vi. No sudden expansions. Remember, growth is better in controlled stages.
vii. Maximise human resources: your professional network, friends and family.
viii. Don't spend ages fine-tuning a product or service in private. Launch and refine as you go.
ix. Use technology to cut costs. There are apps for many things, very many things.
x. Planning is good, execution is better. Be a doer.
xi. Always ask for a better deal. There's nothing wrong with haggling.
xii. Alone doesn't have to mean lonely. Find relevant businesses to collaborate with.
5. Major in financial management.
Without money, your business won't exist for long. It goes without saying then that you must not be slack in managing your business account. Every naira spent and made must be documented. Keeping track of your figures this way gives a clear view of business performance and help with making informed financial projections. Use these essential checklists to stay on top of your money matters and supplement your limited accounting skills with these free apps.
6. Don't bite off more than you can chew.
Solo entrepreneur or not, you shouldn't try to do everything yourself. And if we're all being honest, you really cannot. It's true that you don't have employees to delegate tasks to, but outsourcing is always an option. Give work you're not equipped to handle or you don't have time for to freelancers or contractors. It will cost you money, but it might save you more eventually. You should also explore collaboration (with businesses that can help you achieve your goals).
7. Leave your shell.
With all you have to do, there's a tendency for you to become isolated and caught up in your work. This isn't healthy for you or your business. There's a lot to gain from interacting with other entrepreneurs, both those on your level and the more experienced ones. Make networking a part of your life. Find a mentor or five, people who have grown past the stage you're in and can point you in the right direction. And just as important, never forget that your life is not just about your business. Make time for your family and the pursuit of your other interests. That's how to live a full life you'll be proud of.
For more help with running your one-person business, binge-read our eye-opening series, Why Nigerian Businesses Fail. All the best.
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