Is Opening my own Solo Consulting or Professional Service Business the Right Choice for Me?

Introduction.

Are you desperate for the benefits of being your own boss and doing things on your terms, but aren’t sure what direction to go? Have you considered leveraging your existing skill set into a professional service oriented business? In this post, we’ll be exploring the benefits and challenges of starting a solo service business and help you determine if it’s the right fit for you. 

I’ve been down this precise path. I considered myself a “wantrepreneur” for a long time. I knew with certainty that corporate life wasn’t for me, but I also dreaded the idea of starting a business that would require me to work 80 hour weeks, taking huge personal and financial risk, and not being present for my family.  

Entrepreneurship can take on many different paths. There’s the exciting world of venture capital and startups. There’s the world of local small businesses, be it restaurants, retail shops, car repair, plumbers - the list goes on forever. There’s also the world of franchising - where you pay a big buy in to implement a proven system. 

What is a Solo Service Business? 

So what exactly is a “solo” professional service or consulting business? It’s any individual who markets and sells their knowledge or expertise directly to clients, through a business. This could be an engineer-for-hire that works for multiple clients simultaneously. It could be a consultant that gets hired by CFO’s for their expert knowledge. It could be a professional interior designer who develops one-on-one client relationships.

The key traits they all share is that the business owner is an “expert” at something, there is a market that exists for people with that expertise, and the solopreneur ultimately trades their time and expertise with those clients for money. 

Competing Entrepreneurial Paths

Starting any business requires risk. In fact, the trait that all entrepreneurs share is a willingness to take on risk. Being an employee outsources all of the risk to the business where you work. A trait that GOOD entrepreneurs share is ensuring that they get properly compensated for the risk they take on. 

Imagine you decide to open a franchise. Something like a McDonalds would cost you several million dollars just to get started. Hundreds of thousands of dollars is typical for anything you’ve ever heard of. Those big-brands and proven systems mitigate a ton of risk, but also put firm caps on your upside. Often times, you’re spending several hundred thousand dollars to “buy” yourself a low six-figure job that requires 70 hour weeks and the nightmare of dealing with employees. Scaling this business typically requires opening more locations.

Of course you don’t need a franchise to open a local small business. But the “average” small business owner in the US makes less than $70k per year. To earn that, over 80% of them regularly work nights and close to 90% regularly work weekends. 

The Simplicity and Risk Benefits of Solopreneurship

I launched my solo-service business because it gave me all the things I really wanted (and needed) with a risk-profile light years ahead of other paths.

Ultra-Low Startup Costs

In most cases, you already have everything you need - a place to work, a computer, and utilities. Virtually any software tool you could need is available on a month-to-month basis. Your niche may have some specific needs, but it’s never going to come close to the costs associated with a typical small business that requires physical space and equipment. 

The Ability to Moonlight and Test

If you have a 9-5 job, you can easily validate your core business before you assume the risk of diving in full time. Develop your business model and core strategy, then test market your service to your anticipated market. Learn and refine before you go “live.”

Build the Business YOU Want

A solo-service business has a hard cap governed by the time you’re willing to put in. Viewed incorrectly, this is a ceiling on your revenue. Viewed correctly, it means you only have to work with the people you want to. You only need a tiny slice of the market to succeed. You don’t have to keep generating excess sales to meet payroll or add employees. You can design a business around the revenue and workload you want.

Let’s you Build the New Skills You Need

Leveraging the skill you already have lets you focus on the business skills you’re currently lacking. Need to get up to speed on strategic business design? Accounting? Marketing? Want to learn how to build your own website? Run your ads? Figure how to generate leads? Selling the thing you’re already an expert at let’s you focus 100% of your free energy on all the stuff you need to learn. 

Create a Bridge to Independence

Most folks at this stage are really desperate for independence more than anything. Sure we’d all like to get rich, but it's the constraints of a 9-5 job that are what’s really driving us mad. Maybe continuing to do the thing you do at work for other people doesn’t sound very enticing. I get that for sure. But there’s zero reason your new service business doesn’t have time baked in for other pursuits. Let your service business pay the bills while tackle other big ideas.

The Challenges and Risks

Everything isn’t all sunshine and roses right? There’s two major drawbacks I’d like to discuss…

Social Isolation

Working from home behind a desk is great for some people but hugely challenging for others. If you crave the social aspect of your day job - the watercooler chats, the social events after work, etc - then this can be a big shock. 

Lack of Scalability

This is the big one. The business we’re describing here is inherently not-scalable. After all, we’re talking about a business whose revenue is limited by the hours you put in. That’s the big trade-off. A clear path to a good income, but a ceiling above that if you don’t change anything. But keep in mind there’s nothing to say you can’t change things. There isn’t a rule that says “no hiring other people”, or that you can’t leverage this business to launch something else. 

What Happens if You Don’t Know What You’re Doing

You know what’s way worse than having a 9-5 job that pays decently with good benefits? Building a “business” that has you working 70 hour weeks, making less money than your old job, working for crappy clients who expect you to answer the phone on Friday at 9:00pm. 

If you just kind of “wing it” with your solo service business, this is exactly where you could end up. I considered this back in 2013 when I was getting started. I called this my “nightmare scenario.” And to make it worse, you might even mistake this for success - you are your own boss with your own business after all. Maybe this is how everyone does it?

I wanted to ensure this didn’t happen to me. My business would either succeed on my terms or I’d go back and get a real job - but the nightmare scenario simply couldn’t happen. How did I ensure that? By designing my business strategically.

How can this happen? Being an expert at one thing doesn’t mean you’re expert at being a solopreneur. Do you know how to map out a business model? Do you know how to develop a strategic plan to implement your model? Do you have a framework to put that plan into action? 

There’s no singular “right” way to build or operate your solo business. But there’s countless dead ends and mistakes that can derail you along the way. 

How to do it the Right Way and Build a Business You Love

To love your business it must meet the following requirements:

• Achieve your revenue goals
• Achieve your time commitment goals (hours)
• Work for the clients you want to work for

How do we make sure this happens? Through Strategic Business Design. We need to develop a realistic and durable business model, a strategic plan to make that model possible, and a framework through which we can test, launch, and grow the business.

Develop a Business Model

Our business model shows the relationship between all of the key variables that relate to cash and time in our operation. If we are going to take home $X while working Y hours, we better understand exactly how that’s achievable.

We have to have a detailed understanding of all the ways we spend time in our business? Do we know exactly how many hours we have available to generate revenue? Have we allocated the right amount of time for generating proposals and offering free phone consultations? Do we understand our break even hourly rate?

Have we traded alternative approaches? How much different is a business with an average client value of $1,000 vs $5,000 vs $X? 

Develop a Strategic Plan

With a deep understanding of the solo business model we prefer, how can we build a business that achieves that model? This is where we answer the Who, What, Where, and How of our business:

What lines of business (service offerings) are we going to focus on?

Who are we going to market these services to?

Where will we position our business in the market?

How do we price our services? How do we find our clients?

Designing a realistic, durable business means having a model and strategic that are in complete alignment with each other. Building a business you LOVE means these things are both in line with your goals and expectations.

Develop a Framework to Test, Launch, and Grow

Models and plans are useless without taking action. What process will you take to validate your idea, transition to doing it full time, and have it reach it’s potential?

What skills and personality type does this require?

A Sense of Urgency

There’s a level of motivation that comes with “my family is relying on me to succeed” that is hard to otherwise match. A reason many people with comfortable 9-5’s can never transition to entrepreneurship is because there’s no urgency to do so. They can dabble with whatever passive income scheme they’ve been marketed, drop a chunk of change, and not have any real consequences. It’s very hard to succeed when failing has less risk. 

A DIY Mentality

That doesn’t mean you won’t outsource things that make sense to outsource, but you have to be willing and eager - not just prepared - to learn how to do things.

Social Balance

Depending on your niche, the amount of social interaction will vary tremendously. If you’re someone who craves the daily interactions at the office water cooler, will you really be OK working days on end by yourself? On the other hand, you have to be willing to build new relationships with clients as you go along. High emotional intelligence will go a LONG way towards letting you empathize with other people.

Now when I started, each new client phone call was frightening. I didn’t know what I was doing and lacked confidence. That’s perfectly OK and normal! 

Conclusion

So what do you think? Do you have what it takes to be a solopreneur building a solo service or consulting business? Do you:

• Crave the freedom and independence of doing your own thing
• Have a marketable skill that you can leverage
• And are willing to learn what you don’t know

If so, then you should consider opening your own solo-service business. Do the trades against other opportunities and how that fits in with your goals. That’s what I did back in 2013 and have been working for myself ever since. Consistently generating a six-figure income, never working nights and weekends, with plenty of time left over for other projects. 

If you think this might be a path for you, I encourage you to book a free strategy session with me. I’d love to hear your story and help you evaluate if this is the right path for you!