In 2015, there were 35,584 businesses that only employed their owners. Yet each still brought in $1 million to $2.49 million in annual revenue, according the U.S. Census Bureau. And the number of businesses reaching those revenue figures represented a 33% increase since 2011.
That's from Elaine Pofeldt, author of "The Million-Dollar One-Person Business: Make Great Money. Work The Way You Like. Have The Life You Want."
Tips for startups:
Replicate your efforts. Expand capacity beyond what a single individual can typically do, Pofeldt says.
How? Hire employees? Not necessarily. Instead consider enlisting contractors, outsourcing and automating some of your work, says Pofeldt. "Most high-revenue, non-employer business owners are using some combination of all three strategies," she said.
Specialize. Pofeldt quotes David Fairley, founder and president of internet-business broker Website Properties, who says "the average person can be successful pretty easily by creating something very niche-oriented. The more of a niche, the better."
Fairley has helped clients sell successful internet stores. Many of them market items like gumballs, sleep masks, muck boots, fairy figurines and decorative mailbox flags.
Invest in you. Attend conferences. Work with a business coach. These "may seem like luxuries. But among entrepreneurs who break $1 million in solo businesses, these are common practices," Pofeldt said.
Take Ben and Camille Arneberg. They founded the fast-growing Amazon store Willow & Everett. When they launched the business, they put $5,000 into inventory. They raised some of it from friends and family.
"The Arnebergs looked at their startup costs as an investment in their own education," Pofeldt said.
Ben Arneberg: "You pay thousands of dollars for a college course. We said, 'Let's spend $5,000. We're going to learn a lot. Even if it all goes down the tube, that experience will be invaluable.'"
Be relentlessly systematic. Most business failures result from poor execution, not unsuccessful innovation. That's from Jantoon Reigersman, who with Randy Komisar wrote "Straight Talk For Start Ups: 100 Insider Rules for Beating the Odds."
Both authors have significant experience as venture capitalists. Among the key stages of implementation they cite are:
- Develop your idea.
- Assess its attractiveness.
- Build the technology.
- Deliver the product.
"The creative process is essentially an execution process, not a eureka moment," Reigersman said. But even simple plans can be hard to execute. "They require the utmost discipline," he added.
Stay persistent. Results will disappoint. And challenges will arise. But these setback don't have to be failures. Instead learn from your mistakes. Refine your approach.
He added: "You haven't failed until you stop trying or run out of money. Ventures need to be patient through this trial-and-error validation period."
Create relationships. "We live in a day of impersonal communication and social media friends," said KP Reddy, author of "What You Know About Startups Is Wrong."
"It is very hard to build trust virtually," he said. "As an entrepreneur, many times you are asking someone to trust you and take a leap with you."
Scrutinize potential investors. Don't just take the first eager investor who knocks at your door, Reigersman says.
"The best entrepreneurs are always making the time and effort to meet potential stakeholders well in advance of needing money," he said. "In this way they can vet the field for the best match."
Ask if they can:
- Attract new clients.
- Find other investors.
- Bring in strategic partners.
The right partners bring much more than cash. "They bring experience and connections," Reigersman said. "If they have the skills and judgment, they can make a big difference."
