one-person-business

Inside “The Million-Dollar, One-Person Business” With Elaine Pofeldt

So for today’s session, we have with us, Elaine Pofeldt. A journalist, a content strategist, blogger, ghostwriter. But especially, author a book, which I loved, called “The Million-Dollar, One-Person Business.

With Elaine, we’re going to cover the topic of the book!

How did you get to research one-person one-million businesses?

Elaine Pofeldt: I’ve been a journalist for a long time writing about entrepreneurship. And one thing I noticed was that almost all the coverage is about scalable startups, but the vast majority of small businesses are one-person businesses.

In the US for instance, there are 28 million small businesses. 81% are called non-employer businesses, meaning they don’t have payroll.

So it could be most of them are solos, but sometimes it’s partners like a husband and wife team or two friends or a family business, but that’s the vast majority. And they were getting no coverage at all, even though they were quite significant.

Then just through coincidence, I write a blog for Forbes and like a lot of writers, I sometimes fall behind and it was getting to the end of the month and I was looking for inspiration on something to write about.

So I came across these census statistics on the non-employer business and how much revenue they were bringing in, and I noticed that there was a pocket of solo entrepreneurs that were bringing in between 1 million and 2.49 million US dollars in revenue per year.

And I was really curious about what they were doing because a lot of us know people that are graphic designers, or writers, or other types of one-person businesses. They’re not making $1 million a year.

And I looked through the data and I found it was really interesting. It was across many different industries; manufacturing, professional services, personal services like nutritionists and fitness trainers.

It was in real estate, informational marketing, people who do things like your webinars and self-publishing courses, that sort of thing.

I wrote a post about it and I didn’t know who the entrepreneurs were because the US census isn’t going to tell you, it’s a confidential survey, and it went viral. It had something like 240,000 page views, and people were writing to me saying, “We need to know more. We’re really interested in this trend, but you didn’t tell us who the entrepreneurs are.” And I said, “Well, I don’t know. So I’ll write to the readers of Forbes and say, if you’re one of these businesses, please write to me.”

So I wrote a few more posts about different niches like consultancies that bring in one million, and in those posts, I requested that people write. So about a year later, I have five of them and I wrote this other post about them.

One was Alan Walton, the founder of SpyGuy. It’s a store that sells cameras, like if people are concerned about keeping an eye on their babysitter who’s watching their children, that sort of thing, or preventing elder abuse. Those are the cameras that he sells. There was Stan Nazaretsky who is a fitness trainer, who licensed the right to use his brand to a whole bunch of other fitness trainers.

Rachel Charlupski, who was, she started her business as a college student as a babysitting service that provides babysitting to enterprises, or people on vacation at hotels. She had something like 2,500 babysitters, and I just spoke with her.

She’s still in business and still a one-person business that’s doing really well, actually. She’s in New York City. And then there was a wealth manager who had a newsletter that people valued greatly and paid him a lot of money for, and so on.

And this post had something like 350,000 page views, so I realized people are very interested in the topic. And I started, every time I found one of these businesses, I would write about them. And then eventually an agent contacted me and said, “This would make a great book.” And I, by that point, I was writing the book in my head anyway.

So that was how it came about. And since then, I think I’ve interviewed about 60, and just to give you an idea, there are about 37,000 of these businesses out of 28 million small businesses in the United States.

So it’s not that many. But the way I look at it is, it’s kind of like running the four-minute mile. There was a point that people did not think it was possible, and then Roger Bannister did it and then other people realized, yes, you could run a four-minute mile. Now a number of people have run a four-minute mile.

I think when people realize it’s possible, it expands their capacity for what they can achieve. So I feel like anybody in any size business can take away things from the stories of these businesses, that they can apply and that will help them to build their revenue.

And I do want to add something. I don’t feel like businesses that don’t get to one million have no value, or should feel bad that they’re not at one million. But the reality is, it is very hard to run a one-person business because there’s no safety net for people in businesses.

So things, it depends on the country, but like in the US, you don’t have healthcare through the government so people have to buy it and it’s very expensive. There’s just a lot of things that can happen in a business. You have unsteady income, so you really need more cash reserves than people think.

So if people build their revenue and profits, it gives them the security that you might get through other means if you went the more traditional route with your career.

And I find that a lot of business owners are motivated by a passion for the business, that they, to be sustainable, they need to become more businessy about how they run their businesses. This book is, it tells you how real people are doing that, and achieving really great results.

What are some of the factors that really push people to start their own solo business in the first place?

Elaine Pofeldt: That is about thinking like an entrepreneur. And a lot of people would go into a business and think, oh, I’m an attorney, or I am a manufacturer, but you’re also an entrepreneur.

And the more you think like that, an opportunity starter, someone who creates opportunities, someone who is maybe making things up as you go along because there isn’t a rule book for what you’re doing. The more your business will thrive. It’s really a mindset and it, in terms of what drives people, it does come out of mindset too, I think.

There are different groups of people that I’ve found, like when I’ve done events around the US where I’ve done panels of the entrepreneurs from the book, the audience will consist of different groups.

One I think, is young people that want to do startups, not necessarily all young people, but people who want to do startups. And so this is like a way station on the way to a startup, where eventually they plan to scale. But for right now they’d just like to get to a million.

So there’s that group. I see parents, like mompreneurs, but sometimes dads too who want more flexibility to spend time with their children and they can’t get that in corporate life. You’ll see older people. I don’t know what the situation is like in Italy, but in the US we have a lot of age discrimination in certain fields, particularly like tech.

It’s very hard for somebody to keep moving ahead with their career after about age 45 in technology, and so people get pushed out. People have had very good jobs and they have a lot of capability, and they’re really not old.

They have a lot of vitality, and yet the job market doesn’t want them anymore. It doesn’t want to pay them what they’re worth. So they go out on their own. And then I see people that are retirees or pre-retirees who would like to combine some work with travel and other things.

And there’s actually another group that’s of all ages. I think digital nomads, people that just want to experience the world and travel, and have a business that’s mobile. It’s a lot of different people. And that, it’s kind of an exciting trend because it really does bring together a lot of people at different stages of life all over the world.

What are the primary business models of solo businesses?

Elaine Pofeldt: There are so many that I kind of grouped it into some main rubric, just to give people a place to start. One of them is professional services. Now I have to say something.

Service businesses are hard to get to one million, so you have to be very creative.

But for professional services, like an attorney, accountant, somebody like that who’s been on payroll somewhere and then they go out and put out a shingle. Sometimes they’re very highly compensated and good at what they do, so they can quickly get to $1 million just by pricing their services according to what the market will bear.

Some of them are doing things like consulting. I wrote about one entrepreneur who, he’s a consultant in the oil and gas industry. His name is Chad Patschke. He’s not in the book, but I met him after I wrote it. And what he did, his services go for about $300 an hour, US dollars.

He hired a bunch of colleagues who were scaling down in their careers. He’s in his early fifties, but he had some colleagues who were getting into that pre-retirement stage when it didn’t want the corporate stress anymore and brought them on as consultants who work in his business, and he’s able to bill them out.

So he got to one million in about a year, because he’s got a whole bunch of highly compensated people that are working with him in that capacity. Done quite well. He’s in the Austin, Texas area, so you can do it that way by teaming up with other consultants.

Sometimes they do informational marketing where they might have a course or do a webinar. I remember attending a webinar for an article I was writing that had to do with a change in credit card law, and these two attorneys were experts in this niche area and they charge, it was between $2 and $300 a person.

Well, there were 600 other people in the room with me who paid the $2 or $300 for this one hour, and then they aired it a few more times and charged the same amount to watch the non-live version of it. Right.

So think about that, how much revenue that professionals with expertise can bring in. And I’m sure they paid somebody to manage the webinar, but how much could that possibly cost compared to what they were charging? And think about how that compares to if they use that one hour to sit down with one client.

And that’s the kind of exponential thinking that we see. Sometimes they’ll create a product that goes along with the business, so it could be a course or something like that. It could be a mastermind, something that has recurring revenue, and I think they have masterminds all around the world.

That’s like a group of people led by a coach who will help them to scale their business in some way. And that applies to personal services too. The same service business approaches. So you could be a nutritionist, a fitness trainer, there’s a lot of services that people do that could be treated in that way.

There are yoga teachers who are Instagram influencers, a lot of people like that. Then another area is manufacturing. So manufacturing used to be something where you had to be a big company. Now you can use a co-packer. And one example from the book was a couple, Louise Debalose and Rebecca Cronies.

They’re a married couple and her father is a beekeeper, and he sells the bees to farms, commercial farms, and he wasn’t doing anything with the honey so they realized they could bottle up the honey and sell it, and they knew it was unadulterated honey.

They knew he took very good care to keep it pure and that sort of thing. And there’s a lot of adulterated honey being circulated out in the world, so it was a good selling point and that was how they built their business using a co-packer.

You can’t bottle it up in your house, but you pay a co-packer a certain amount and they handle all the commercial processing, so you know it meets food safety requirements, it can be put on the shelves of stores and that sort of thing.

That’s an option. There is also, real estate is another area that almost anybody can do if they save up some money and have good credit. When, for example, from the book, is Cory Binsfield, who, he was a financial planner and he bought a duplex in Duluth, Minnesota where he’s from. And he used the money from that to keep on buying more property.

So anyway, he got to over a hundred properties over a 20-year period, and that became bigger than his financial planning business. And so that’s his million-dollar one-person business.

These things are not always overnight success stories for people who have no patience. You do have to put in the time with some of these, but now it brings in quite a bit of revenue for him. So those are a few, there are many, many types of businesses that people do.

eCommerce is another really big one. You’re talking about digital businesses, that’s huge. It used to be a little easier to do it on Amazon. Now I think the competition, just from what I hear from the people in the book, has gotten more intense.

So you have some people going onto other platforms in some cases, or they’re building up their own platform more, or they are using Instagram to market with a Shopify store.

There are so many different ways to do it, but the idea is you can scale pretty quickly if you know what you’re doing, and you use Facebook ads and things like that to really build a following around the brand. So just that infinite possibilities.

Gennaro Cuofano: I think there are two key points for me to highlight as I try also my side to ask people to grow their digital businesses. The first is, of course, is that you need to just change the way you think about what you’re doing because it’s not like you’re building a passive income.

The way I see it, it’s more like a nonlinear process where you put the work today and the work that you’re putting today probably you’re going to earn it in a year’s time or two years’ time. So when you start really making money, in reality, the money that you’re making for all the work that you’ve done in the past month or the past years, and really the way you approach the work is different because it’s scalable.

So you try to look at creative ways to actually make your business scale as quickly as possible because with life as a solo business, we’ve limited their first resources, it’s very hard to grow it.

And I think the second point, which for me it’s very important, which I want to highlight is, as you said before, I think it was ways to actually grow a business on top of a digital platform, like Amazon for instance.

Today, I think it’s very important that you start to look at building up your own distribution. Meaning that you need to build your own audience when you start a digital business even though it’s a bit more expensive, in terms of time and resources. But for instance, when you do have your own platform, like your own blog, you grow on your own newsletter. I think it’s way more, probably reliable as a business.

But tell me your experiences as well, also on your side. What do you think?

Elaine Pofeldt: there’s a certain amount of risk to depending too much on one platform. They can change the algorithm and then totally upend your business.

There are pros and cons, right. I think you need a balance where sometimes you do have the scale of an Amazon, or Instagram, or Facebook, that you need to get the product or service out there through the world.

But I think you do need to diversify, in terms of having your own list, having some way to keep in touch directly with your customers. You don’t want to really hand that over to a platform.

The other thing is what if the platform just close? I doubt Amazon is going to close anytime soon, or Instagram, but the world is moving very fast. And things go, I remember there was a social media site called Myspace.

Nobody, I don’t think anyone really uses that anymore. Maybe they do. I never hear anything about it. So things can change very quickly. And so if you’re too dependent on anyone external source of customer flow, you could be in trouble. So you really, you need to own your contact with the customers.

How do you build the branding for a solo business if you have very few financial resources?

Elaine Pofeldt: One of the best things about being a solo business is you’re really the main point of contact with the customers. So your brand can be an extension of your personality. We see that a lot with the Instagram influencers.

You can show your lifestyle in images if what you’re marketing is a lifestyle, and really connect with people. It could just be through very caring customer service. I found with a lot of these businesses, they get very close to their customers and if somebody has a complaint, they get on the phone with them, take feedback, use that to modify the product.

And I think that builds very passionate supporters. So I think being very creative can truly help to brand and really not trying to be a big company, or create the image of a big company.

What do you think is probably the less risky way to build your solo business?

Elaine Pofeldt: What I found is most of these people, the reality is, and this might be different in other parts of the world. In the US a very large portion of the population is not able to save $400, according to a survey by the Fed.

People don’t make that much in jobs, and so I think it’s more practical to try to start a business on the side if you don’t have a lot of savings. There are some people that do have a lot of savings.

Maybe they could cover their living expenses for six months and the expenses of the business, and could just dive in. But you really have to be realistic about what your personal responsibilities are. I know that’s not the mindset of Silicon Valley where it’s mostly like, all in, roll up your sleeves, 24 seven.

There are very few people at that stage of life where they can just drop everything and have no responsibilities to other people, where they can operate that way.

So I think for the vast majority, it’s better to do it on the side. But then, don’t do it on the side forever. Use that time that you’re doing it on the side to really gather information about what’s working. If you introduce some products that are duds and some are successful, drop the duds and lean into ones that are successful.

Really try to amp up some momentum so that you can leave your job. And then there is a point where you just have to take the leap. I know one of the entrepreneurs in the book, Laszlo Nadler, he had a job at Bank of America as a project manager, and he ran his business on the side for a couple of years. He had a wife who is an at-home mother, at the time, and they have two children so he had to bring in an income.

But then he got to a six-figure revenue in the business and he felt comfortable that he could afford to keep a roof over their head and not create family stress. And then he went full time with the business.

Now he’s at two million in revenue and he recently hired his first employee. And he sort of knew when he had to take the leap and go all in, but it isn’t necessarily right out of the starting gate.

How do you know when it’s the right moment to move full time on your side hustle?

Elaine Pofeldt: I think the business will start to tell you what you need to know. It’s just demand will keep increasing. If you’re marketing and you’re getting smarter about how you market, you’re increasing your capacity.

Financial, like if you do a product-related business, you need to have credit. There are just certain things you need to have in place so that you can grow, and those things will start happening organically.

I think it will just become inevitable at a certain point. That customers keep coming, what you’re doing is working. It’s not slowing down, there’s a consistency from month to month in revenue.

The consistency is important, because your bills are due usually on a 30-day cycle or weekly cycle, depending on what it is. So you need some sort of consistent revenue coming in, or you need, if say you’re a product-related business and most of your sales are right before the holidays in the fall, you need to know that consistently maybe for a year or two you’ve been making a certain amount that you can stretch throughout the year.

It’s different for each business, but it’s, I think for most of these folks and most entrepreneurs in general, there’s a point where it just becomes inevitable. It’s just taking a lot of time. Opportunity keeps increasing.

Now if you’re doing it and it’s really not taking off, that’s something to also think about, because you can become so passionate and determined to succeed that maybe you’re not hearing something from the market.

Like people don’t want this product, or there’s too much competition in this niche, and it’s very hard to separate your emotions when you’ve been so passionate about it.

But what I found is the entrepreneurs that are successful find some way to do it. Maybe it’s through a mindfulness practice like yoga or meditation. They do something where they learn how to separate themselves from the emotions that might hold you back from really hearing what the world is telling you about this business.

And if you can really listen with an open heart and view it as something educational, it’s tremendously powerful.

One couple, Ben and Camille Arneberg, a married couple who have built $3 million ultra-lean businesses like this, told me when they started the first one it was called Willow and Everett, and it was an Amazon store that sold decorative housewares for parties, things like wines decanters and coffee mugs and that sort of thing.

They spent $5,000 on inventory and they said that was money that they could afford to lose. They had saved it up and they said, “Even if we fail with these products, it will be the equivalent of a college course, what we learned from this.

So it will not have been money wasted.” If you can take that attitude that you’re going to gain valuable information regardless. Maybe it’s that you have to pivot if you’ve done it for a year or two and it’s just not taking off despite everything you’re doing, you’ll really be a better entrepreneur for it. And eventually, you’ll come across the idea that does work for you.

What would you suggest to someone who actually trying to start a side hustle today?

Elaine Pofeldt: You want to look at what you can bring to the market that no one else can because every person in the world is unique. And I find that the business owners who tap into that uniqueness of thinking, or abilities, or talents, really can do well, because people like that.

They love to connect with someone and something that’s real. And I think, really thinking hard about what’s different about you will help a lot. Every industry has a conversation in it, and I disagree with a point of view that I see a lot, which that corporate people cannot be good entrepreneurs. I always hear that from folks in the Silicon Valley scene.

You’re either an entrepreneur or you’re corporate, you can’t do both. But what I actually find is people who’ve worked in corporate for a while, whether it’s for five years or 20 years or 30 years, they’re very familiar with what’s going on in their industry, and often they disagree with how things are being done.

Like they’ve worked in a big company and they have an idea, but they can’t get it up the flag pole because of the politics or whatever. They have very good ideas, and if they can build up the risk tolerance to actually act on their own idea, they can do really well.

That’s the other part of it, is there is a certain amount of risk to running a business. Now I’m talking about million-dollar, one-person businesses. This isn’t like the Silicon Valley startup that raises $40 million. That’s like a whole other level of risk, and I really applaud the people that built those businesses.

This is like a lighter version of risk, but it still is giving up a certain amount of security. When you reach that point that you talked about Genaro, where you’re, maybe you got to six figures and then you take the leap.

And what I recommend for people to do, because we’re taught our whole lives not to take risks. School tells us not to take risks, study hard and go into this career and you’ll be all set. The whole idea of being set is indoctrinated into us.

You’ve got to build up your ability to take risks. So it might be in your old company, the company made all the investments and things like your professional education or innovation.

Well in your own business maybe you invest in creating a prototype. And a lot of people feel hesitant to even spend the money on themselves because they don’t know if it’s going to pay off.

But you got to start small in those cases. If you’re resisting it and start making the investments. Put up a website, do these things. I’m not saying to waste money, but you do have to get used to the idea of making investments that might not pay off.

So that you can build your tolerance for running a business because that’s the scariest part.

People don’t really talk about what that’s like. But when you hit a point in your business where something goes wrong, maybe it’s in the economy, people aren’t paying you. It’s like a white knuckle situation that many people have not experienced before.

And it can create a lot of feelings of shame, I think in people when it might not be their fault. They’re working around the clock, they’re working hard, they’re delivering their product, but then the great recession hits. That wasn’t anybody’s fault who’s a business owner.

So you have to be mentally prepared for that, or it’s going to knock you out. And it’s building your mental and emotional capacity. I find I’ve run business since 2007, I know people always think this is funny when I tell them because I’m a mother with four children.

But I take TaeKwonDo with my daughters, we’re second-degree black belts now, and I’ve been doing it for years. And that’s been, I would say, the number one thing that helped me running a business. Building the mental discipline to keep showing up to the class three times a week, most weeks, and sometimes really struggling with certain aspects of it.

I’m not really a street fighter. It’s a street fighting discipline, so I have had to get into it. But it forces you to grow, and it also shows you that if you keep showing up, there’s a growth that just comes in understanding inexplicably.

You don’t know what day it’s going to arrive, but suddenly one day you get there and you can do the moves. It doesn’t have to be martial arts, by the way. I do yoga too, and the same thing happens in yoga, which is very gentle.

It could be just meditation, it could be anything, but you do really, really need to build your mental strength in order to do this thing because there isn’t a lot of social support. A lot of people get resistance from their families and the people around them who are worried that they’re taking too much risk, or they won’t have a secure future.

And maybe rightfully so in some ways, but it’s like you want to do this thing, then you got to be committed to it.

And I think the more committed you are, the more likely you are to succeed. But it is not easy. And I think that’s why comes back to share the case studies and stories, I think there’s strength in community.

There are a lot of people around the world who are running one-person businesses of all sizes, and they’re at all different stages of doing it. These people that I write about, are really the Olympic athletes of this.

And I, every time I talk to them, I just got off the phone with a couple that is in Bali. They’re digital nomads, they’re selling travel bags. And I get so inspired by hearing their stories because it takes so much courage to do what they’re doing.

But when it starts really working, it’s tremendously exciting. And here they are, they’re new Yorkers living in Bali now. That’s pretty nice. It’s cold here and they’re in the warms at the beach. So it opens tremendous doors.

Gennaro Cuofano: At a certain stage it becomes like the next front show. It’s like I’ve taken enough, this is probably the emotions I’m feeling right now, are negative emotions, but those are pushing me towards a positive goal, which is building my own business and doing it in my own terms so that I can show that there is a different way to do it.

And I think this is probably the way I love to end the show. So thank you, Elaine, for being with us today. It was a pleasure. and of course for anyone listening you need to read The One-Million Dollar, One-Person Business because this is an incredible read. It’s very inspirational.

It’s very practical and really gets you started in this journey if you’re thinking of actually start your own business, but also if you’re in the process of doing it and understanding when is the best way to transition to your business. So thanks again, Elaine for being with us.

Elaine Pofeldt: Thank you. Thank you so much, Gennaro, and I would just like to invite people. I get a lot of letters from all over the world and I do answer them on LinkedIn or Twitter under my first and last names, which I’m sure in the show notes, but feel free to write to me if you have a question about something in a book.

Because when you’re writing about 32 different types of businesses, I can’t cover every single aspect of every business, or it would be a thousand-page book. So feel free to write to me. I really do enjoy hearing from fellow entrepreneurs all over the world.

And thank you so much, Gennaro, for doing what you do at the FourWeekMBA. What a great offering for people. You just bridging the knowledge gap and building community. It’s really wonderful what you’re doing.

Key takeaways

  • A solopreneur isn’t a freelancer, but an entrepreneur, and to start a one-person one-million business it is critical to shift to an entrepreneurial mindset
  • Many groups of people turn to solopreneurship for several reasons. From aspiring startuppers to digital nomads or older people that find it hard to find reposition in the current marketplace
  • Some of the primary categories where the one-person one-million business can be started comprise e-commerce, consulting, informational products, real estate and more
  • One of the best things about being a solo business is you’re really the main point of contact with the customers. So your brand can be an extension of your personality. We see that a lot with the Instagram influencers.
  • One of the best ways to get started as a solopreneur is to look for a side project where you can devote part of your time to grow. In this way, you have the safety net of the daily job, and a venture you’re building which can become your business
  • When deciding whether to move to your side project full time, take into account consistency. Is the business generating a continuous flow of predictable income? For instance, if the business is seasonal, did you go through at least a couple of seasons to make sure your business is sustainable in the long run?

Key resource

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Get in touch with Elaine Pofeldt on LinkedIn or Twitter.

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Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which target is to reach over two million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get in touch with Gennaro here