A guest post by Elaine Pofeldt, author of The Million-Dollar One-Person Business.
Most people who start one-person businesses don’t expect to bring in $1 million in revenue or more. But a growing group of entrepreneurs are proving it is possible. There were 35,584 “non-employer” firms—meaning those that don’t employ anyone but the owners—that brought in $1 million to $2.49 million in annual revenue in 2015, according to the U.S. Census Bureau. That number has grown 33% since 2011.
These numbers are still small—there are nearly 23 million non-employer firms and most don’t bring in $1 million or more—but the success of these firms hint at the tremendous untapped potential that even the tiniest businesses have to generate revenue. As I began reporting on these solo stars in my journalism work and heard from many readers who wanted to know more, my research morphed into a book called The Million-Dollar One-Person Business, which Random House will release on January 2.
Not everyone needs to bring in $1 million in revenue, but if you live in a high-tax state and have substantial overhead, $1 million in revenue will probably translate to a mid-six-figure income. Given the lack of a safety net for free agents in today’s economy, earning more can give you some insulation against situations such as unemployment and skyrocketing health insurance premiums. And it can help make it possible to do other things that elude many free agents, such as saving for retirement, donating as much as they’d like to their favorite charities, taking a nice vacation every year and, for those with kids, socking away enough money for college.
So who are these Olympic athletes of solo entrepreneurship who are hitting and breaking $1 million? They work in fields that include ecommerce, professional services, personal services, informational marketing and many others.
While many have unique business ideas, what truly separates them from other entrepreneurs who earn less, I found, is how they think about their businesses. To scale their revenues without adding a big payroll, they have looked for creative ways to extend what one person can do. In some cases, they have built a fantastic team of reliable contractors; in others, they have found ways to automate routine tasks, such as managing email contacts with customers, so they can focus on what they do best. For those in service businesses, sometimes they do fantastic work that allows them to charge premium prices. Often, they have used a combination approaches—along with others that are unique to what they do.
Among the high-revenue non-employer business owners I interviewed were:
Laszlo Nadler, a father of two from New Jersey who brings in more than $2 million per year in revenue at Tools4Widsom, a one-person business where he sells planners for people hoping to focus their daily activities on what really matters to them.
- Rebecca Krones and her husband Luis Zevallos, who run Tropical Traders Specialty Foods, a business in Oakland, Calif., that has broken $1 million selling organic honey through their website and various channels
- Sol Orwell, a Toronto resident whose business, Examine.com, sells eBooks on nutritional supplements, bringing in seven-figure revenue.
- Harry Ein, whose Walnut Creek, Calif.-based business Perfection Promo brings in $3.5-$4 million a year selling swag, like T-shirts printed with a company’s logo.
- Cory Binsfield, who started out investing in duplex apartments in Duluth, Minn., and now owns 116 units, bringing in more than $1 million in annual revenue from them.
Some of the entrepreneurs I interviewed loved the simplicity of operating with no employees and are committed to keeping their businesses solo operations. Others saw their businesses take off so quickly that eventually they decided to hire employees. For instance, Joey Healy, who runs Joey Healy Eyebrow Studio in New York City, broke $1 million as a freelance eyebrow stylist working serving well-heeled Manhattanites but eventually decided to expand his staff to five other people. Now he runs a fast-growing shop.
No doubt by the time the book comes out on January 2, some of the entrepreneurs in the book will have moved ahead with exciting new plans and may have grown beyond being non-employer businesses. The nice thing about running a high revenue one-person business is it gives you plenty of options—and we can all use more of those.
AUTHOR BIO
As a senior editor at FORTUNE Small Business, where she worked for eight years, Elaine was twice nominated for the National Magazine Award for her features and ran the magazine’s annual business plan completion. During her time at FSB, she ran the magazine’s website, fsb.com, for four years, building its traffic from two to five million page views a month.