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Suze Parker, 52, of Overland Park, Kansas, knows the feeling. "I do work more than when I was at an agency," says Parker, who opened her PR firm in 2005 after having been employed in the field for 20 years. "But I don't mind it."
The impetus for striking out on her own was a desire to return to the hands-on client work she loved but didn't have time for because she was spending most of her time managing other people. She beat the pavement, letting old colleagues and friends know she was open for business. Pretty quickly the phone started ringing with referrals. The company she was leaving let her continue handling two clients on a contract basis, which helped kick-start revenue.
Between 2006 and 2008, business took off, with annual revenues reaching nearly $300,000 in 2008. But then the economic downturn hit and her income plummeted 40% in 2009. Along the way she learned to outsource the financials to a CPA and use researchers for projects outside her comfort zone. "I don't say that I would never want employees but I don't foresee it," she says. "It creates the situation I was in before." This year Parker anticipates her revenue will be around $230,000, slowly climbing back to her 2008 high.
Successful sole proprietorships tend to have a few similarities. "They are scratching their own itch," says Kedrosky of the Kauffman Foundation, noting the achievements of Arment and Ceglowski. "Something in the world is currently pissing them off so they have to go out and solve it." What's more, the ideas behind the companies are often painfully simple. "You can't go wrong doing less," says Kedrosky, "but you can go hugely wrong doing more." And many have a special expertise like Parker and have time to spend on it, says Paul Bernard, owner of Paul Bernard & Associates, which consults for small businesses.
One way to minimize the risks of going solo is to begin while working somewhere else, as Arment and Ceglowski did — or at least line up a few accounts in advance as Parker did. "The solution to 'I can't find my own job' isn't always to start your own business," says Bernard. "You are raising a child when you are an entrepreneur with all the joys and the risks."