There are nearly 25 million “one-person” businesses in the United States. And, overall, non-employer businesses are making more money than in the past—more than 36,000 of them bring in seven figures or more annually. Elaine Pofeldt researched these entrepreneurs for several years and shares her findings in her book, The Million-Dollar, One-Person Business. While the book doesn’t offer a cookie-cutter blueprint for success, it does reveal a number of strategies that come up time and again in the stories of the entrepreneurs, and these strategies may just help you form the business of your dreams.
1. Find a unique niche you love
Tom Corley, a CPA, has 10 clients who run one-person businesses with 7-figure revenues. He says that nine of those 10 clients built their businesses in unique niches—but don’t let that scare you. You don’t necessarily have to come up with an idea no one has ever thought of before to be successful.
Pofeldt’s research found that million-dollar solo businesses typically fall into six categories:
- Informational content creation
- Professional services and creative businesses
- Personal services firms offering expertise
- Real estate
Within those categories—or outside of them—you can likely find a business that would benefit from your unique perspective. Schroeder-Gardner wasn’t the first person to create a blog based on her experience paying off debt, for example, but her story resonated with enough readers that she was able to build a loyal readership and a thriving business.
“Uncovering an idea that you will enjoy thinking about every day—whether that is when you are writing copy for your website or answering a customer’s question about it—is the secret,” writes Pofeldt in her book.
2. Outsource and automate
It can be nearly impossible for a solopreneur to accomplish everything necessary to run a thriving business, and trying to do everything can quickly lead to burnout. According to Pofeldt, “What will help you break into the seven figures is to expand your capacity beyond what one person can do,” and the companies she profiles in her book use “outsourcing, automation, mobile technology, or a combination of all three to build, operate and grow their businesses.”
Fortunately, there are many tools available to help you accomplish this, and many are reasonably priced for businesses on a budget. Sites such as Fiverr, Upwork, Guru, and Microworkers allow you to outsource a wide variety of specific tasks; some entrepreneurs hire virtual assistants who can juggle myriad tasks or manage projects, schedules, or even other freelancers.
A number of business owners Pofeldt features in her book outsource their customer service, but only after careful training to make sure customers will be treated well.
3. Develop passive income
Schroeder-Gardner credits “affiliate marketing” with not only providing her financial freedom, but also with giving her lifestyle freedom. “I am able to place links to products that I like on my blog, and that helps me to earn money down the line, without having to work every single hour of the day,” she explains. “Instead, I can make income while I'm asleep, on vacation, out sailing, and so on.”
According to Schroeder-Gardner, entrepreneurs may achieve similar results by creating a product to sell. She says, “By selling a product instead of a one-time sale (such as a one-time service that you personally provide), you can earn money by repeatedly selling that product to multiple people, instead of just one person.”
In addition to her affiliate income, Schroeder-Gardner has created her own product: a course that teaches other website entrepreneurs how to profit from affiliate income.
4. Find a way to finance it
Most small business owners tap personal savings to start their business; 62% of business owners surveyed in 2015 by Nav (my company) reported funding their businesses that way. While bootstrapping a business without taking on debt is ideal, entrepreneurs may eventually rely on a variety of small business financing sources to fund their business growth—ranging from savings, loans from friends and family, crowdfunding, business plan competitions, and lines of credit.
Even a 0% credit card balance transfer can be helpful if used wisely. Pofeldt warns that she’s fielded questions over the years from entrepreneurs who used credit cards to start businesses, and their businesses failed, leaving them with debt for which they were personally liable.
Fortunately, the cost of starting a business has been going down in recent years and your savings may go farther than you expect. Pofeldt writes, “You may need less financing than you think.”
5. Keep at it
Corley says that the single characteristic all 10 of his million-dollar clients share is a strong work ethic—but that’s not the whole story. In his book Rich Habits, Poor Habits, Corley contends "the rich work harder, not because they have a better work ethic. They work harder because they like, love or are very passionate about what they do for a living."
Anyone can come up with an idea. Few people see that idea through to success.
While many entrepreneurs put in significant hours to start and grow their businesses, some have day jobs and can’t afford to jump in full time. Rosemarie Groner launched her million-dollar one-person business working just 10 hours a week while raising a family and running an in-home daycare. She used a simple productivity hack to make sure she stayed on track, and continues to work about 20 hours a week, leaving her plenty of time to spend with her family.
Few entrepreneurs—including those Pofeldt profiled—are overnight successes. But they keep at it, believing that their efforts will pay off in the long run. Eventually most learn they have no choice but to work smarter, not harder, as there are only so many hours in the day.
“Unlike in a traditional job, where your pay may be closely tied to the hours you put in,” Pofeldt writes, “your own business income stems from how smart and selective you are about how you spend your time.”