You're so glad you left your 9-5 job, and you love being a freelancer. But there's one thing that's nagging at the back of your mind. Surely you can't just keep on like this indefinitely? The next step is to hire, or team up with, others and start up your own business. Isn't that what "success" looks like?
Well, according to author Paul Jarvis, the answer is an emphatic "no".
Jarvis is soon to release a new book that takes a surprisingly unconventional view of career and business success. In Company of One: Why Staying Small Is the Next Big Thing for Business, he overturns conventional wisdom and argues that the key to a more fulfilling career is not to create and scale a new start-up, but rather, be able to work for yourself, determine your hours, and become a highly profitable and sustainable "company of one". Here are his ten tips for doing so successfully.
1. Become too small to fail
The typical business advice is to build a company that’s too big to fail. The problem is, large companies fail all the time. The average lifespan of a publicly-traded company on the S&P 500 is only 15 years. Large companies are very fragile because they require so many resources (human capital, financial capital, etc.), and can’t move quickly or pivot when needed.
Instead, focus on building something that, in effect, is too small to fail. You can adapt a small company of one to ride out recessions, adjust to changing customer motivations, and ignore competition by being smaller and more focused.
2. Pursue an 'exist strategy'
Success ought not to be measured by quarterly profit increases or ever-growing customer acquisition, or even by your ability to create an exit strategy and leave with more than you entered with. Instead, as Natasha Lampard of the internet conference WebStock says, you can focus on an “exist strategy”; based on sticking around, profiting, and serving your customers as best you can.
Your success can be measured by being profitable quickly as you stay small and build real relationships with your customers; not because you’re an altruistic hippy, but because it pays off over time. Long-term, loyal customers will sometimes hang around for generations, continuing to support your business financially.
3. Bigger isn’t better
Not all growth is beneficial, and some growth can reduce your resilience and your autonomy.
Scaling up seems to make sense: Want more customers? Hire more employees. Need more revenue? Spend more. Are you fielding more support requests? Build a bigger support team. But scaling up might not be the best or smartest solution to the underlying problem.
As a means of generating higher profits, what if you acquired more customers only by creating more efficiency, so you didn’t have to hire more people?
What if you generate more revenue by finding a way to spend less (again, for higher profits)? What if you responded to the growth in support requests by finding a better way to teach your customers how to use what you sell, so they didn’t have to ask questions as often? What if you didn’t have to work more hours to finish a project, but just more efficiently, so you could then enjoy more of your life away from work?
Growth, in the typical business sense, isn’t always a smart strategy if it’s followed blindly. Much of the research reported in my book strongly suggests that blind growth is the leading cause of business problems. It can leave you with an unmaintainable number of employees, unsustainable costs, and more work than hours in a day. It can force you to lay off employees, sell your company at a less than optimal price, or, even worse, close up shop entirely. What if you worked instead toward growing smaller, smarter, more efficient, and more resilient?
4. Use scalable systems
Sometimes, of course, growth is required when it aligns with your overall purpose. And when growth in profit, customers or reach is needed; however, companies of one can look to simple and repeatable systems to facilitate scale, with no need for more employees or resources.
By continually working toward reducing one-to-one points of contact with customers and focusing instead on one-to-many relationships, a company of one can scale its connection with customers without actually scaling its business.
A perfect example is email marketing. It requires the same amount of effort to send an email to 50,000 people as it does to send that same email to one person. This is precisely why most companies of one rely heavily on newsletters and email automation: these are powerful tools for building relationships, trust, and even revenue. With an average return on investment of 3,800 per cent, according to the Data and Marketing Association, email marketing is a valid model for scaling without scale.
5. Harness your personality
Systems for connections don’t work, though, simply by turning them on and watching them increase profits. (This would be like believing you can plant a real money tree.) Work is required, at the onset and through iteration, to ensure that these systems are functioning optimally. Personality is still needed, even with automated customer communication, for these systems to be effective.
6. Personalise your channels
The point of scalable connecting is to make customers, and potential customers feel as though they’re getting on-demand information as they need it, not being relegated to an infinite loop of unhelpful and frustrating computer-generated responses.
Using personalisation and segmentation in connection channels like email is key. You want to send the right email, to the right person, at the right time. Otherwise, you may be sending out a firehose blast of messages that may not even be relevant—like a sales pitch to a customer who’s already purchased the product.
7. Resilience is required
Dean Becker, the CEO of Adaptiv Learning Systems, has been researching and developing programs around the idea of resilience since 1997. His company found that the level of resilience a person exhibits determines their success in business, far more than their level of education, training, or experience.
Being resilient means that a business has to accept reality, have a sense of purpose and possess the ability to adapt when needed. It’s more difficult for larger companies to be resilient because they have so many moving parts, require so many resources and people, and have a much harder time pivoting quickly when things change. In contrast, a smaller company can be nimble and agile to changes in markets, customers and trends.
8. Solopreneurism is a myth
Working for yourself doesn’t necessarily mean working by yourself. Even if your company is just you, there are still times when you’ll need to collaborate with others; from contractors to partners to clients.
If your business is a small team or exists within an organisation, even more layers of collaboration are required. But collaboration is a double-edged sword: technology allows us to connect in real-time easily, but at the expense of focused, deep work.
9.You can't do everything
It’s difficult for any person to do all the things, be an expert at all the things, and find time to get all the things done. It seems stressful to hold the belief that because you work for yourself, you should work by yourself.
My own business, where I’m the only employee, operates because I have a handful of freelancers I pay on the regular to help with everything from SEO, to copyediting, to podcast engineering, to legal and accounting. I also partner up with other folks who own and run separate businesses to create things that are more than the sum of our expertise and skills. My business only works well because I surround myself with smart and talented people I can work with.
10. You need to guard against loneliness
It’s also sometimes super lonely to work for yourself. Even as a super, duper introvert, I feel the weight of sitting by myself in my home office every day. That’s why I make an effort to do things with other people. I grab coffee with local friends once a month or so.
I Skype with other folks who run online businesses, without a business reason to do so, to connect. I’m even in a sci-fi book club with other tech nerds who run businesses. Whether we like it or not, humans are social creatures so I can’t see it being mentally beneficial to hole away in solitude forever. When we aren’t given the community of coworkers, we have to make our own.
Other people make us better. In life, in business, in everything. This doesn’t mean we should hire lots of them as full-time employees to fuel the “grow until we’re profitable” mentality. But it does mean that we have to work at not being completely “solo” because it’ll only hurt our business if we have the hubris to believe that we can do everything ourselves just because we work for ourselves.
To find out more about Paul, his online courses and his upcoming book Company of one: why staying small is the next big thing for business, published by Houghton Mifflin Harcourt, visit his website.