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Starting a business. This concept, to many, is the definition of the American Dream. But not every dream is the same. For some, it is the opportunity to continually grow and get bigger, to open new offices/locations, hire more employees, and increase revenue. For others, it is to create a product or service, sell that product or service, and then move on to the next endeavor. And for others, like myself, it is the ability to create purpose through our work, to be in control of our schedules, and to attain a balance which allows for higher profitability, personal fulfillment, and living our life’s values.
The last type of business I have described has been labeled as a solo or micro business, or a business which typically has gross revenues <$750k and employees 5 or fewer employees. The term itself might not be very endearing, but the concept speaks to many. The Small Business Administration (SBA) lists a small business as having less than 500 employees. 500! When people use the term ‘small business’, obviously based on the above definition this can have different meaning to different people. Solo/Micro-businesses, or those with 5 or fewer employees, accounted for 56% of all small businesses according to the US Census Bureau in 2014.
To be fair, not all businesses labeled as solomicro-businesses plan to stay that way, but many do. The allure of staying small has many benefits, and those who choose to stay small should not be ashamed in this decision, but rather should embrace this choice. Yes, we wear many (if not all) hats. It may be difficult to completely step away, particularly for solos, and ultimately we are responsible for both the successes and the issues which arise in our businesses. But isn’t this something to be celebrated? We are the face of our business and we control our image and reputation by our actions and approach. Our relationships with our clients or customers are deeper and more personal, allowing us to view them as more than just consumers. Our ability to remain nimble in the ever changing world helps us adapt and provide superior customer service that most large firms cannot replicate.
For those of us who choose to remain small, we are able to align our values with our work, and allocate our time based on what is most important to us. We love being able to pick up our kids from school, even if that means we need to work until midnight once the kids are asleep. Due to technological advances we may be able to travel on a whim, realizing that we may not be able to completely disconnect, but we are not tied to a desk. We understand that although we may work 50-60 hours a week, (most of the time) work does not feel like work. We can see the progress we are making, the impact we are having with our clients/customers and with our community, and how every decision benefits us and our clients in the pursuit of both professional and personal fulfillment.
Running a deliberate solo/micro business should not be construed as ‘lazy’ either, as many would love to label us. Staying small allows for more intentional growth, and by outsourcing tasks or leveraging technology we are able to achieve profit margins that just aren’t as attainable when you have a large staff and high overhead expenses. We prefer to manage our business and our relationships as opposed to employees.
Not to say trying to build an enterprise business is wrong, or that those who do strive for exponential growth are not able to achieve many of the things listed above, but starting and growing a business or practice with the intentionality to remain small and realize your dream is an admirable ambition. No, we may not end up on the national ‘Top 10’ lists for our industry or be the next investor to guest star on Shark Tank, but we should take great pride in our work and be convinced that the life and business we’ve created is worthy of praise.
Many solo/micro-business deal with a myriad of decisions everyday. At FivePoints Financial Planning, we work with our clients to reduce taxes, protect them from unexpected events, and plan and prepare for the future. We enjoy helping our clients free up time in their daily lives and instilling a sense of confidence in their personal and business finances. For more information, please visit us at FivePoints Financial Planning.
Andrew Langdon is a fee-only financial planner based in Peachtree City, GA serving clients in the Greater Atlanta area. FivePoints Financial Planning provides financial planning and investment management services to young families and pre-retirees who are looking to achieve financial freedom. Services are offered on a project or ongoing basis.
Disclaimer: This article is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. I encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Andrew Langdon, and all rights are reserved. Read the full Disclaimer.