Many entrepreneurs assume that the key to business success is scalability. The more people you hire and the more hours you work, the more money you’ll earn and the bigger you’ll get. But that’s not necessarily true, as a new book by business journalist, Elaine Pofeldt, shows.
A former editor at Fortune Small Business, Pofeldt covered this type of business for several years before writing “The Million-Dollar One-Person Business: Make Great Money. Work the Way You Live. Have the Life You Want” (Random House, 2018). Her book explores the rise of single-person businesses breaking the seven-figure mark and shows what makes these businesses thrive.
We caught up with Pofeldt to find who these entrepreneurs are and why they’re successful. The following conversation has been edited for clarity and brevity.
StartupNation: What inspired you to write this book?
Elaine Pofeldt: I came across statistics that showed there were a growing number of entrepreneurs who were breaking $1 million in one-person businesses. In 2015 there were over 35,000. The number was up 33 percent since 2011. I thought that was really interesting. I wrote a blog post about it, and people started writing to me with a lot of curiosity. What exactly were they doing to make this income?
I didn’t have that information, and it was a little hard to find it out because the Census Bureau has to protect people’s privacy, so I wrote to the entrepreneurs through my column.
“If you are one of these entrepreneurs, people are really curious about you,” I wrote. “What are you doing?”
They wrote back to me. One was Allen Walton, who owns Spy Guy, an online spy camera store. Another was Rachel Charlupski, who owns The Babysitting Company, which is a babysitting network that has thousands of babysitters as contractors.
When I published the post, it went viral. An agent noticed all the posts and said, “Hey, I think this would be a great book.”
By that point I had been writing for a good three years, so I had a lot of knowledge of what made (these stories) different compared to many other entrepreneurs.
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StartupNation: What are some of the common qualities that they share?
Elaine Pofeldt: Their personalities were very different from each other. One of the things that they do to a greater extent than most businesses is automate. I know it is not a new idea, but many business owners don’t do it.
You say, “I should stop emailing back and forth to make appointments and use a scheduling app,” but you don’t. This will take an hour out of your day. These people get it all set up so that they are not wasting any time on menial tasks.
Another thing is, although they are non-employer businesses, they aren’t operating alone. They have a network of freelancers they use. They aren’t going to teach themselves how to design their own website; they hire a graphic designer. Although they could learn it, their time is better spent on other things in business. They are not going to try and do their own accounting, they get an accountant. I think there are a lot of solo entrepreneurs, who, in the beginning, were do-it-yourselfers and they never really graduate passed that mindset.
They really treat themselves like a precious resource. When you are in an ultra-lean business and you are the business, a lot of us don’t take care of ourselves. They also invest in their own education and personal enrichment. They will go to conferences that cost them money and surround themselves with people who can elevate their thinking and expand their thinking.
StartupNation: Are there specific industries in which this is more feasible?
Elaine Pofeldt: E-commerce is a very big area. That is the group that I see the most of, where people are really getting above $1 million. Another area is professional services. That’s things like an accountant or an attorney, but they run their business very well and very efficiently. Often, the way they amplify their revenue is with another category, such as informational marketing. Maybe they are an attorney that does webinars, and they charge $300 for each person.
Another one is personal services. They will often build a platform—for instance, teaching online—or they scale by building a network of other people that do the same thing that they farm the work out to.
We have the example of Joey Healy, who is an eyebrow stylist. He started out going to the apartments of wealthy women and styling their eyebrows. Then he said, “I am walking around, wasting time in between these appointments, so let me create my own little, one-man eyebrow styling studio.”
He did that for a while. Then he created his own styling method and he trained stylists in other studios how to use it. They were contractors to him. He also created his own eyebrow styling makeup. He used an outsourced manufacturing plant to make it, so he didn’t have to have all the factory and ingredients or anything else. He is really about the one-man show.
StartupNation: Is there anything that surprised you as you were researching the book?
Elaine Pofeldt: What surprised me was how much personal time everybody in the book has. They really understood the importance of stepping back and maintaining balance. They also have a perspective that many people don’t, which is that sometimes there is a maximum amount of revenue that you will bring in and be happy.
Take Jayson Gaignard. He initially ran a company called Tickets Canada and grew it to 20 employees. He was very stressed out running a full-scale company. He closed it, stepped back and said, “what do I really want to do?” He loves people. He started having these dinners where he gathered together seven or eight people he thought would be interested in talking with one another and it evolved into an event.
He has opportunities to grow it, but he makes $250,000 out of the business. He doesn’t need any more and he won’t be happy if he scales beyond that. He actually has a podcast called Community Made, where he talks a lot about challenging the notions of scale. It is very interesting to hear somebody with the capability to scale, but he felt like he wasn’t happy when he scaled.
I think people are prioritizing their lifestyle more. They are not worried that if they don’t work 24/7, their kids won’t go to college. They have it taken care of, but they don’t have to have all the money in the world or become a billionaire. They make enough that they cover all the necessities they need.
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StartupNation: Is there anything else you would like readers to know?
Elaine Pofeldt: I have been hearing from a lot of people since I put the book out into the world. It’s very interesting to me as an author to see how the ideas in the book are being applied.
I welcome people to contact me. I am on LinkedIn and Twitter under my own name, so that is a good way to reach out if they have questions or they just want to tell me about their business.
“The Million-Dollar One-Person Business: Make Great Money. Work the Way You Live. Have the Life You Want” is available at fine bookstores, and can be purchased via StartupNation.com.
