By Chuck Sink
According to the SBA, over 70 percent of registered American businesses are sole proprietorships. The vast majority of these businesses have one employee, the sole proprietor himself or herself. They are the self employed. The “one man band” industry is big, and more lucrative than many sales people may realize. It may be more accurate to refer to this group of small businesses as an economic sector, rather than an “industry.”
The variety of services and products this diverse set of entrepreneurs provides puts them in a class of business consumers that’s impossible to define narrowly. They fall into no vertical market category. The only common denominator among this group is the number 1. They work independently but not alone. They have dynamic organizational structure in the form of a network. Their relationships are necessarily strong for them to sustain their businesses.
Successful solopreneurs tend to be trusted advisors to their clients and therefore have significant influence in the market. Some examples:
- An independent management consultant could make recommendations that influence major industrial contract decisions. Winning his approval could be required to land a huge sale.
- A local real estate agent could be the connection you need to sell software to the largest mortgage company in the region.
- The busy carpenter you meet at a Chamber mixer could be your first bookkeeping or CPA client.
- A freelance writer working from home could bring you a couple of your largest website clients.
- The self-employed professional (with no recent pay stubs) could grow to become a solid commercial banking client.
The moral of these bullets is that you just never know who’s who until you find out whom they know and work with. There’s a type of customer referred to in old sales jargon as a “sleeper.” A business person you discover working from home or from a small office with no staff could be assumed to have no real budget behind their humble operation. While there are many struggling start up solopreneurs who seek freebies and might waste your time, you can’t tell by appearances alone whether they offer opportunity or not. You need to have a conversation and hear what they do. Check out their business network and work history before deciding whether it’s worthwhile to engage in business. A real “sleeper” could end up being your best customer or referral connection.
The solopreneur sector is growing out of the necessity of “the new normal” – the economic conditions that have stifled growth and permanently eliminated many corporate jobs. Highly talented and skilled people have, in record numbers, discovered they can put their ambition and talent to work in a newly frugal marketplace that welcomes smallness, simplicity, low overhead, nimbleness, cost effectiveness and independence.
When people suddenly get laid off without another job lined up, most of them file for unemployment compensation and start looking for a new job. There is a perceived dependency on steady income, healthcare benefits, vacation time and a regular work schedule. The organization feels like a safe and comfortable place to work and becomes almost like a parent provider for the family. The prospects of starting a business with no immediate income and predictable stream of paying customers is horrifying to most people with a mortgage, college loans and car payments. I know this feeling intimately because I’ve been there. The aspiring entrepreneur with high family expenses and no start up capital needs to believe it can be done. They need faith in something bigger than themselves because no unaided person can build an organization by himself.
Economic modesty is privately disparaged by some in the professional community. Nobody wants to admit they can’t afford to replace an old car or take a trip whenever they feel like it. It’s a cultural thing. Some people with means may perceive that those who haven’t yet turned the success corner probably never will and should be avoided as time wasters. Body language often conveys this attitude. Thankfully for entrepreneurs, there is usually a curious person with an open mind somewhere in just about any crowd.
An Untapped Niche?
I’ve personally seen distressed individuals lose jobs and take the leap to start a business. They came across as a bit needy at first. They persevered through the startup struggles during the first few years and now operate vibrant, growing businesses, buying all kinds of products and business services to keep running. A few of my compatriots fit this profile and we can tell you our stories.
For the start-up solopreneur, there is nothing more empowering than other solopreneurs or small businesses willing to mentor and provide affordable needed services. Here, relationships are better than cash. Money, once spent, can’t keep providing anything. Strong relationships and mutual collaboration are the wellsprings of business sustainability and growth.
Every bootstrap business founder in the world can look back to the early relationships that saved his butt and provided springboards to profitability; profitability that today is reinvested through the purchase of capital assets as well as operational supplies and services. Many of these business owners like to remain small, nimble and independent. They don’t usually have the visible trappings of other businesses but they do have money to spend and colleagues to recommend.
In some cases, it’s a good idea to help support the one-person startup business that has a need for your services by loosening firm prices, waiving tight credit terms or spending a little more time with him or her. As their company grows, so will your business as they remember who their real friends are.