With the rise of eCommerce, AI-enabled business and marketing tools, and cutting-edge financial technology, it’s become a breeze to start and operate a sole proprietorship business. Aspiring entrepreneurs can easily access small business loans from online lenders and start businesses right from their basement.
There are even fintech lenders who cater to minority business groups. For instance, companies like Camino Financial offer small business loans to Latino entrepreneurs.
What is it like being a sole proprietorship?
Being a sole proprietor has its upside. It’s a business with a straightforward structure and doesn’t have many legal requirements. Thus, it’s easy to register, set up, and operate a sole proprietor.
Where sole proprietorship shines is that you’ll be your boss. You’ll enjoy the fruits of your hard work and have all the freedom to make a business decision without consultation. You won’t be answerable to anyone but yourself!
But running a business as a sole proprietor isn’t all cakewalk. You’ll be the be-all and end-all, reaping the rewards and bearing the risk of your business in equal measure. You’ve to take care of all the business areas, including accounting, marketing, financing, management, and balance all that with family life.
Thus, you need to have the proper business understanding and have a different set of skills to meet the demands of self-employment.
How to run a business successfully as a sole proprietor
1. Stay motivated
It starts with you. You need to be in the right mental frame and have a burning zeal, passion, and entrepreneurship spirit to assume the business’s responsibilities.
Remember, your client depends on you, and failing to deliver on your promises or meet set deadlines can damage your reputation. So make sure you stay motivated and focused on providing quality products/services to drive customers satisfaction and grow your client base.
2. Gain industry expertise
You’re out there on your own, and you don’t have the luxury to second-guess things or blame others. You need the proper industry knowledge and experience to win client confidence and convert more leads. That means you should be up to date with industry trends, work practices, customer preferences, and most everything that’s happening in your business vertical.
Industry knowledge will also help you streamline your operational strategy and improve your products/services so that your business offerings are well aligned with current market needs.
3. Automate business operations
Managing operations manually can break your day. It’s time-consuming and expensive in the long run. Tech is your best partner when running a business as a sole proprietor.
Thus, adopt modern tech to deploy and pivot your everyday business tasks. Use project management tools and software, inventory management system, and time management software to automate as much as possible.
Automation is also the way to nail other areas that place a demand on your time, like overseeing sales, marketing, ordering supplies, and assigning, scheduling, and monitoring business projects.
4. Nail your finances
Many sole proprietors wake up one day only to realize that they don’t have the capital they started with. If you can’t tell how much you’ve paid for supplies, wages, shipping fees, utilities, or taxes in the last six months, that may be your fate.
To avoid financial death knells, perfect your bookkeeping practices and record every coin that comes in and goes out of your business. Whether you outsource bookkeeping services or DIY your accounts, have records showing how cash flows in and out of your business.
You’ll also need clean business records and financial statements when seeking business loans to expand your business.
5. Pricing strategy
When pricing your products, the final price should account for all costs, including production, transportation, storage, and shipping. Again, look at how your competitors are pricing their goods to make an informed decision without getting into price wars.
Then, calculate your profit margins to arrive at the best reasonable price for you and your customers. That’s how you avoid selling at a loss or pricing your products too high to scare buyers.
6. Keep your business well funded
Finally, you’ll need capital to keep your business running smoothly. While it’s harder for sole proprietors to obtain funding from traditional lenders, things have changed with the rise of online lenders.
Today, it’s easier to access small business loans from a fintech lender at the comfort of your premises. They have a simple, paperless pre-approval process, and once you get approved, money will be in your account within 1-2 business days.