5 mistakes to avoid to build a better one-person company

Not every type of enterprise is suitable for a sole proprietorship. Not all kinds of enterprises are good for a lone founder. Many businesses are impossible to grow and run when you're a one-person craftsman. So how do you find a business that can be easily grown as a sole founder or a small team?

Understanding and learning a few simple rules can save you years of frustration. Unfortunately, I learned this the hard way over almost two decades. Every day I see entrepreneurs making the same mistakes, mainly because we naturally imitate what big companies do.

Don't think globally. Think locally

At every step we're under the influence of big companies, global successes. We constantly read about startups that achieved international success in a few years. What's more, we're under the influence of these companies and we use their services ourselves. Just think of Slack, Notion, Clickup, Gmail or Netflix.

All these companies have a few features in common:

• they need an enormous number of customers to operate,
• their main target is consumers,
• the services are sold at a very low price, where there's often a free package,
• they're available globally,
• they have an enormous amount of capital.

As a small entrepreneur, don't model yourself on such companies. It will only lead you into frustration and often end in bankruptcy. So what can you do better?

Avoid products and services that require an enormous number of users

As a beginning entrepreneur, you'll largely finance your business with your own funds. It's then difficult to create an effectively operating business on many markets, powered by an enormous number of users. You'll have neither the time nor the funds for it.

Besides, all those big businesses didn't pay for themselves for a long time and were supported by external financing. Only after many years did they become large enough to start turning a profit.

A large number of customers requires hiring people to handle them and automating many services (accounting, email notifications, mailings). As a small enterprise you can't compete with their spending or incur losses over long periods of time.

Don't play the low-price game

Lowering the price is one of the most common ways of winning a customer. That's a mistake! Winning a customer and their trust is very difficult. Sales, marketing and customer service consume a lot of time and financial resources. That's why if you have low prices, you have to reach hundreds of thousands of customers, which in turn translates into higher maintenance costs, which requires winning more customers. The effect of scale.

I see a lot of businesses that rely on selling a product or service for 49 zł. Why does it look like this? We model ourselves on other companies that do this and replicate the pattern. If you work hard and win 100 customers, you'll earn 4900 zł. And now factor in the costs of running a business, the costs of your work, etc. And now think about giving away a free package like Notion or Slack?

Look at Gmail. It's one of the most popular email providers (and not only). Its services, which offer really a lot, are available for free. Do you think that if they forced a charge of 10 zł a month, people would still use it?

A definitely better solution is to offer services for the B2B sector. It's easier to win a customer (a company) that will pay even 100 times more for your services than a consumer.

The B2B market, not B2C

At the very start of your journey, direct your services or products at other entrepreneurs. It's one of the easier ways to avoid the challenges related to scale, low prices or consumer rights. Selling to companies is significantly simpler and you can offer higher prices. Enterprises are more willing to spend money on products or services that allow them to grow, and that translates into their revenue.

A good example here would be providing training, marketing services or consultations. Many companies have large budgets that they have to spend on services of this kind. In the case of the consumer market it's completely different. There, customers are more cautious about spending and look above all for a low price.