Running a One-Person Business: Pros, Cons & Costs

Running a One Person Business

More than 8 in 10 small businesses in the U.S. are now run by a single person with no employees, according to Census Bureau data. This post walks through the real pros and cons of running a business on your own versus bringing on staff, and what hiring actually costs if you decide to grow your team.

The Pros and Cons

Some businesses can run entirely on one person’s effort. Others — large retail operations, manufacturing plants, and similar setups — don’t give you that option. Below are the main trade-offs to weigh if you do have a choice.

PROS

Reduced Operating Expenses: Hiring costs more than just a paycheck. Entry-level wages vary by role and location, but on top of that, SHRM’s 2026 benchmark puts the cost of recruiting and onboarding an entry-level hire at $1,500–$3,000, separate from wages. Across all role types, the average total cost per hire runs $4,700–$4,800. Staying solo means you skip that overhead entirely, along with benefits and payroll tax.
No Payroll to Deal With: When you’re running the business as a sole proprietorship, you don’t have to manage payroll. Paying yourself just means drawing from the business’s income.
No Employee Management: Managing employees takes time and effort. Running the business solo means that time and effort goes toward other tasks instead.
Easier to Run Things Your Way: Rolling out changes with a larger team usually means getting everyone to adapt. Running solo means you can make changes without needing to bring anyone else along.
Less to Worry About When Business Is Slow: Revenue fluctuates for every business. With staff, a slow stretch often means weighing layoffs. As a one-person operation, there’s no added payroll cost to worry about when things slow down.

CONS

No Time Off: When you’re the only one running the business, there’s no one to cover things while you’re away, which makes time off harder to take.
Working Longer Hours: Handling every task yourself usually means longer hours to get everything done.
Limited Productivity: One person can only produce so much in a day. Ten people working the same hours will produce far more than one person can alone.
Limited Creativity: Working with a group means you can brainstorm and pull in other perspectives. Working alone limits you to your own ideas.

Key Points and Facts About Running a One-Person Business

Solopreneurs now make up 81.9% of all U.S. small businesses, according to U.S. Census Bureau non-employer business data.
Hiring an entry-level employee costs $1,500–$3,000 in recruiting and onboarding overhead alone, on top of wages, per SHRM’s 2026 benchmark.
The average cost to hire across all role types is $4,700–$4,800 as of 2026, according to SHRM.
Running solo eliminates payroll tax and employee-management overhead but caps how much work one person can physically get done in a day.

Action Steps for Deciding Whether to Hire or Stay Solo

AI isn't optional anymore. Start with one small step.

Calculate Your True Hiring Cost

Add up the wage or salary for the role you’re considering.
Add SHRM’s benchmark recruiting and onboarding overhead of $1,500–$3,000 for an entry-level hire.
Factor in payroll taxes and any benefits you’d offer.
Compare that total cost against the revenue or time savings the hire would realistically generate.

Audit Your Time

Track how many hours a week go to tasks that don’t require your specific expertise.
Separate tasks only you can do from tasks anyone could be trained to do.
Note which tasks are costing you the most opportunity — sales, production, or growth work you’re not getting to.

Test Before You Commit

Try a contractor or freelancer for one specific task before considering a full hire.
Use that trial run to measure actual return before taking on payroll.

Reassess At Growth Milestones

Revisit the hire-or-stay-solo decision whenever revenue jumps significantly.
Revisit it again if you’re consistently turning down work you don’t have time for.

Checklist for Running a One-Person Business

Know your numbers.
- Total cost of a potential hire, including onboarding overhead
- Current revenue per hour of your own time
Protect your time off.
- Build backup coverage or automate what you can before you need a break
Watch for the productivity ceiling.
- Track whether demand is regularly outpacing what you alone can produce
Build a contractor bench for overflow.
- Line up freelancers you can call on before you need a full-time hire
Set a trigger point to revisit staffing.
- Pick a revenue or workload threshold that means it’s time to reconsider hiring

FAQ: Running a One-Person Business

How many U.S. businesses are run by just one person?

Solopreneurs account for 81.9% of all U.S. small businesses, according to Census Bureau non-employer business data.

How much does it actually cost to hire your first employee?

Beyond wages, SHRM’s 2026 benchmark puts entry-level hiring and onboarding overhead at $1,500–$3,000. The average cost per hire across all roles is $4,700–$4,800.

What’s the biggest downside of staying solo?

A hard productivity ceiling — one person can only produce so much in a day, and there’s no one to cover for you when you need time off.

When should I consider hiring instead of staying solo?

When you’re consistently turning down work, when a specific task is eating time you should spend on higher-value work, or when a trial run with a contractor shows a clear return.

References:

Resources

For more on the pros and cons of running a business on your own vs. hiring staff, see the resource section below, which offers a collection of hand-picked articles from various authors.