PDF Summary:Company of One, by Paul Jarvis

Have you ever wished you could own a company, but you feel out of place in the fast-paced, growth-focused world of business? In Company of One, Paul Jarvis presents a solution—a single-person company that limits its growth and focuses on creating quality products and services. He argues that by owning such a company, you can exercise more control over your work, create your own schedule, and form meaningful, successful relationships with customers.

In this guide, we’ll explore why fast and endless growth isn’t always the best goal for a business and examine the characteristics of a single-person company. Additionally, we’ll discuss some of Jarvis’s tips for starting a single-person company. In our commentary, we’ll look at alternative perspectives on what makes for a successful business and discuss additional ways you can apply Jarvis’s advice.

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When identifying financial goals as the owner of a single-person or limited growth company (including those aimed at limiting your company’s revenue), some experts suggest making them as specific and concrete as possible. For example, you might set a revenue goal of $300,000 in one year. Such specific goals help you more easily track progress, and they keep you motivated.

Then, create a detailed plan including specific steps needed to reach your revenue goals. For a single-person company, this may include actions that ensure you stay within your stated revenue goals, instead of exceeding them.

Finally, track your spending. This could be especially important for a single-person company, as you have limited funds to work with and no cushion for overspending.

When it comes to limiting clients and customers (and reaching revenue goals), one strategy is raising your prices slightly, especially on your most popular products and services. If you have more clients than you can take on, you know the demand for your product or service is there, and a small price increase likely won’t turn away loyal customers. However, it will likely drive some potential customers elsewhere, making your client list more manageable.

Jarvis describes three primary characteristics that define a single-person company and its owner:

Characteristic #1: De-Emphasis on Growth

Jarvis states that a core aspect of a single-person company is its de-emphasis on growth. Instead of solving problems by spending more money and acquiring more resources as traditional growth-focused companies do, single-person companies find solutions using their existing resources.

For example, a growth-focused company might solve the problem of how to attract more customers by increasing the money it spends on advertising. Additionally, it might hire more marketing employees to create strategies for customer acquisition, with the ultimate goal being to increase the size and profits of the company.

In contrast, the owner of a single-person company wouldn’t spend more money or hire more employees to expand its customer base—they would instead focus on creating a high-quality service or product. The better a service or product is, the more likely it is that customers will recommend it to their friends. Over time, the company’s network of clients and customers increases through word of mouth.

(Shortform note: Using your existing resources to save money as a business owner is often a matter of researching and educating yourself on free or low-cost tools. For example, if your company requires software, skip the pricier options like Photoshop, Quickbooks, and Microsoft Office. Instead, research free options that work just as well. When considering advertising, avoid costly traditional options like TV commercials and familiarize yourself with social media and SEO techniques. These options can drive traffic to your business without you having to spend anything.)

Characteristic #2: Adaptability to Changing Circumstances

Jarvis says single-person companies can adapt to changing circumstances and endure hardship. One challenge may be market changes caused by world events or new technologies. With an adaptive, resilient mindset, owners of single-person companies can pivot more easily when they encounter such challenges than larger companies can.

(Shortform note: How should a business owner adapt to big changes in the world and the market? According to some business experts, the first step is to pinpoint products and businesses that will likely experience growth as a result of the change. For example, during the Covid-19 pandemic, equipment for home offices, restaurant takeout, and in-home entertainment like social media and streaming services experienced increased demand. Second, determine whether these shifts are likely to be long-term or short-term and whether they began before the change or as a result of it. Finally, adjust your business model to fit the changes in supply and demand relevant to your industry.)

Single-person companies are adaptable to hardship and changing circumstances because they typically have a strong purpose, not just the desire to make money. As we touched on earlier when discussing a company’s core work, this purpose stems from your values as the owner—the reasons you do the work apart from profit. For example, your company’s purpose might be to support social and economic justice, help people advance their careers, or promote sustainability.

(Shortform note: A sense of purpose in the work doesn’t just contribute to resilience and adaptability—research also suggests that it boosts motivation and productivity, even during periods of stability. One survey suggested that people are more satisfied with their job and feel empowered when their work is meaningful to them. When people feel more satisfied with their jobs, they typically work longer hours, are more focused, and take less sick time. Therefore, your sense of purpose as an owner of a single-person company can continually motivate you to work hard to make it the best it can be.)

Characteristic #3: Increased Independence and Control

According to Jarvis, owning a single-person company also gives you more independence than you’d have as the owner of a fast-growing company or an employee at someone else’s company. Because your business stays intentionally small (meaning you’re likely the only one working there) and uses existing resources to solve problems, you have complete creative, financial, and administrative control. Therefore, you get to decide how often you work, when you work, who you work with, and so on.

For example, say you’re a graphic designer. If you’re working at a firm, management determines your projects and clients. You have to prioritize your work based on what other people want from you. However, if you own your own graphic design company, you can choose your clients and decide how many projects to take on at any given time.

(Shortform note: The independence of owning a single-person company may improve your mental health. Some studies suggest that people who are self-employed feel more centered and experience less stress than people who work nine-to-five jobs. In a 2019 survey, 70% of self-employed workers said they had a good work-life balance, 55% said they felt less stressed than they did in a traditional office environment, and 54% said they were healthier overall after switching to self-employment. Others said they had more freedom, fun, and satisfaction in their jobs because they could set their own schedules.)

Getting Started With Your Single-Person Company

In the last section, we explored the characteristics and benefits of Jarvis’s single-person company model. Now, let’s dive deeper into three pieces of practical advice for starting your single-person company:

1. How to build your skillset so you’re prepared to run your own business
2. How to set up a strong financial and legal foundation
3. How to develop strong customer relationships

Tip #1: Build Your Skillset

Jarvis suggests building your skillset before starting your single-person company. To be successfully independent, you have to be good enough to stand on your own. You can achieve this in a variety of ways, including working for a while at an existing company to gain experience, taking classes, or practicing skills on your own.

First, hone your knowledge and skill in the work that forms the core of what you want your single-person company to be. For example, consider our earlier example of the business that offers online cooking classes—before you open such a company, you should learn from other chefs, practice your teaching skills as an instructor at an existing cooking school, and so on. This will give you credibility as an expert in your field and ensure that you can offer a quality product or service.

Second, acquire a broad understanding of administrative and practical business skills. As the owner of a single-person company, you’re responsible for every aspect of the business, so you need to have a working knowledge of many types of work outside of your core work. These include marketing, accounting, payroll, sales, project management, and more.

Different Paths for Skill-Building

If you choose to build your skills as an employee at an existing company, seek out chances to explore types of work that push you outside of your comfort zone. Instead of going for upward movement in one department, consider making lateral moves to related departments. This will help you expand your skill set and your knowledge of related fields. For example, if you normally work in marketing, you might take a job in customer service to learn about working with customers directly. Knowing more about different types of work in your field and how they interact will help you fill multiple roles in your business later on.

In addition, you could expand your skillset in your core work or in general business knowledge on your own by taking advantage of countless online resources. Coursera offers low-cost certificate courses from accredited universities that cover business topics like marketing, sales, accounting, and project management. LinkedIn Learning and Skillshare also offer courses that help with professional development along with more specific skills you could turn into a business, such as writing, graphic design, web design, and illustration.

Finally, reading regularly can help you improve your abilities in your core work and peripheral work. Research suggests that reading of all kinds improves communication skills, writing skills, critical thinking, and creativity—all necessary for the owner of a single-person company. Additionally, reading books written about your line of work can help you stay on top of new developments in your field.

Tip #2: Set Up a Strong Legal Foundation

According to Jarvis, getting the legal systems of your business in order from the start ensures you don’t get duped out of money you’re owed or get into trouble for operating illegally. We’ve organized Jarvis’s recommendations for protecting yourself legally into three steps:

Step #1: Set up your company as a legal entity separate from yourself. This would be an LLC in the United States. Your business makes money from your work, instead of you making it directly. You then pay yourself a salary from the business. This ensures that you aren’t personally liable if anything goes awry in your business. Rather, the business itself is liable.

(Shortform note: In addition to offering reduced liability, forming an LLC allows you to establish business credit. As a new business, you need to build credit to obtain financing and build credibility as you’re fostering relationships with vendors who sell you the resources you need. Likewise, LLCs experience fewer compliance regulations from states than sole proprietors or corporations. To establish an LLC, choose the state you want to form it in and choose a name. Then, choose a registered agent to receive important legal documents and tax notices on behalf of the LLC. Next, create an agreement between you and other members of the LLC for how the LLC will be operated. Finally, file your LLC documents with your state.)

Step #2: Create terms of service if you sell products, and create contracts if you offer a service. Customers have to agree to terms of service before buying your products. Likewise, clients have to sign a contract before you begin working with them. This creates transparency and offers protection for you, preventing customers and clients from neglecting to pay you or taking advantage of you in another way.

(Shortform note: In a legally binding fashion, terms of service for your product state how your product or service can be used. They protect your intellectual property and protect you from possible liabilities. Your terms of service should identify your business, describe your product or service, offer any relevant disclaimers and safety information, explain conditions and rights of use, and include any other necessary terms. Meanwhile, contracts outline the terms of an agreement between someone providing a service and someone requesting a service. They should state the scope of the work expected, the timeline for the services, how conflicts will be handled, the cost of the services, and any due dates for payments.)

Step #3: Contract a business lawyer to help you with the legal aspects of your company. An experienced lawyer will make sure that:

1. Your contracts or terms of service are sound
2. Your company is operating within the legal boundaries of your particular business and location
3. You don’t make mistakes that lead to expensive lawsuits

How to Find the Right Business Lawyer

To find the right lawyer for your business, do thorough research and consult a variety of sources. Search online for lawyers with expertise in your business area, and look at reviews from past clients. Additionally, ask for referrals from other business owners—they can give you their honest experiences with their lawyers (how the lawyer solved conflicts, got their business through difficult situations, and so on).

Once you have a list of possibilities, interview prospective lawyers to assess their abilities and experience, communicate your goals for your business, and find out how they can help you achieve them.

In addition to helping you create contracts and operate lawfully, a lawyer can help you with patent applications. If you develop a new product or service, patents help you protect your intellectual property. However, the application process takes time and money, particularly when you try to do it yourself. Lawyers have the knowledge to get a patent application submitted and approved more quickly than you can.

Tip #3: Develop Strong Customer Relationships

Finally, Jarvis argues that it’s vital for a single-person company to foster strong connections with its customers. Since these companies aren’t receiving money from investors, they depend on customer relationships to sustain and grow their business. Here are two of Jarvis’s suggestions for having beneficial customer interactions:

Suggestion #1: Be an Educator

When you’re looking for prospective customers, Jarvis suggests playing the role of educator as a sales strategy. Teach people about your product or service, including how to use it so it best serves them.

Being an educator requires transparency, clearly demonstrating the strengths of your product or service. When you can show your product’s unique strengths, you’ll stand out against competitors.

(Shortform note: Before you can educate customers about your product, you need to be an expert in it. In The Psychology of Selling, Brian Tracy describes a three-step process for achieving this. First, analyze your product and identify five to 10 of its best features. Ask yourself why a customer buys your product. Additionally, study your customers. What qualities does your ideal customer have? What qualities do most of your existing customers have? What additional customers might benefit from your product? Finally, study your competitors. Identify your primary and secondary competitors and determine how your product outperforms theirs.)

Additionally, by acting as an educator for your product or service, you show customers that you’re the expert in your field, which builds trust. You’re the first person who comes to mind when they need whatever type of product or service you’re offering, and they’re more likely to buy from you.

To teach about your product or service, you might use social media, teach classes that show people how it works, and so on. For example, Toni Okamoto, founder of the website Plant-Based on a Budget, teaches people how to eat a healthy and affordable plant-based diet. Her website has hundreds of free recipes, she posts regularly about plant-based cooking on social media, she speaks about it on podcasts, and she offers a newsletter with recipes and tips.

Anyone can use these resources to learn about her methods and ideas. However, they also act as a sales pitch for her business, through which she sells meal plans and cookbooks and participates in speaking engagements. By giving her knowledge away freely and showing customers how they can be successful with her services, she builds trust and expertise. If people like her content, the free education entices them to invest in her brand further by purchasing her products.

(Shortform note: In Rework, Jason Fried and David Heinemeier Hansson offer several further suggestions for what to share with customers to build trust and credibility. First, they argue that customers love to see how products are made (which is why factory tours are popular). Knowing the inner workings of a business makes the customer feel like an insider, increasing their sense of loyalty. Additionally, Fried and Heinemeier suggest being transparent about your product’s imperfections and shortcomings. Customers will appreciate your honesty and trust you more as a result.)

Further Benefits of Customer Education

Many experts agree that customer education is a valuable sales tactic. First, some research suggests that it increases revenue—customer education adds value for the customer using your product, which makes them more likely to continue using it. This is beneficial because it costs between five and 25 times more to acquire a new customer than to retain an existing one.

Education also leads customers to adopt new features quickly and engage with the product more deeply. Finally, educating customers upfront reduces the time and money it costs to help them with support issues later on. When customers already know how to use your product by the time they buy it, you won’t be overwhelmed with customer service requests.

Suggestion #2: Prioritize Quality Over Quantity

Jarvis argues that a single-person company should prioritize creating high-quality, long-term relationships with customers, rather than concentrating on acquiring a greater quantity of customers. This means focusing on providing the best quality service and products possible for each person you serve.

Jarvis argues that focusing on serving existing customers will help you maintain consistent revenue as loyal customers keep coming back. Owning a single-person company allows you to maintain strong, personal, and long-lasting relationships with customers because its small size means you have the time and capacity to focus on each individual’s needs.

Additionally, loyal customers become a cost-free part of your marketing strategy—if they’re satisfied with your services or products, they’ll likely recommend your company to their friends and family, which generates new business, money, and slow, sustainable growth.

(Shortform note: Some experts argue that customers referring their friends and family to you is the highest sign of loyalty. They’re taking a risk by recommending your product or service—if their recommendation turns out to be bad, it could affect their reputation or relationships. To justify that risk, they have to feel strongly about your company’s quality.)

How to Create Lasting Relationships With Clients

Like any other long-term relationship, relationships with customers and clients take work, thoughtfulness, and effective communication. To aid your efforts in building strong, long-lasting customer connections, consider the following tips from experts in client relationships:

Tip #1: Be consistent, timely, and efficient with your communication. Your customers and clients need to know that their projects and concerns are important to you.

Tip #2: Maintain a positive attitude. For your clients to feel confident in your ability to meet their expectations and goals, you must display confidence and enthusiasm. Even if you’re stressed, your customers and clients don’t need to see it.

Tip #3: Be open about your opinions and perspective on the progress of projects you’re helping your customers with. Don’t just tell your customers and clients what you think they want to hear. They need to know that you know what you’re talking about, and you can only show that by being honest. If you withhold your true thoughts, they may lose trust and decide to work with someone else.