Why More One-Person Businesses Are Breaking $1 Million Dollars In Revenue
[Adapted essay from The Million-Dollar, One-Person Business]
When Katherine Krug raised $1.2 million on Kickstarter to manufacture BetterBack, a posture-support device she created after developing sciatica during long hours at her computer, it was just the beginning of her success.
Krug soon appeared on the TV show Shark Tank, and the publicity helped her business grow. All told, in her first 365 days of business, Krug brought in $3 million in revenue. She’s now working on a next-generation product, slated for release in January.
As Krug has grown the business to the point where it is thriving, she is in the fortunate position where she must answer an important question: “What is my vision for BetterBack — and my life — and how do I achieve it?”
Related: How Fiverr’s Culture Created a Company of CEOs
Krug is part of one of the most exciting trends in our economy: the growth of ultra-lean one-person businesses that are reaching and exceeding $1 million in revenue. The U.S. Census Bureau found there were 35,584 “nonemployer firms” — those that do not employ anyone but the owners — that brought in $1 million to $2.49 million in 2015, up 33 percent from 2011. The number of nonemployer firms hitting the six figures is growing, too, meaning we could soon be seeing more solo firms whose owners gain the experience to help them break the million-dollar mark.
Why are these businesses growing? Factors such as the growth of free and automated digital and mobile tools and the expansion of online platforms that make it easy to hire contractors all contribute. But entrepreneurs’ attitudes are changing, too, and that is a factor.
Rather than adopt industrial-era business of scaling that depend on hiring an army of employees, these entrepreneurs choose to travel light. When they need to expand their individual capabilities, they often deliberately turn to contractors or firms that handle billing and other outsourceable functions. As ultra-lean firms grow, so do the businesses of the contractors and outsourced providers they hire.
Related: Every Entrepreneur Gains From Nurturing the High-Skilled Gig Economy
Eventually, many owners of fast-growing, one-person startups reach a turning point. They need to decide if they will keep trying to scale without adding traditional employees or if they will evolve into a traditional, job-creating business — or opt for a hybrid version of these models.
The beauty of owning a microbusiness is that you are free to choose the route that is best for you. The happiest million-dollar entrepreneurs tend to do three things to realize their vision and decide on the path that’s right for them.
First, they take their emotional temperature frequently, asking themselves what they want to achieve in their business and if their efforts are leading in that direction — and frequently revising their answers to fit changing circumstances. Second, they set clear goals and stay true to them, until it makes sense to refresh them. And finally, they are prepared to reinvest in the business, or other pursuits, when the timing is right.
In Krug’s case, as her sales took off, she wondered if it was time to put some core employees on payroll, as many other companies do. But when Krug tried hiring her own employee to help her for a 90-day trial period, she quickly found the situation frustrating. The employee wasn’t getting projects completed.
Krug could have trained her employee more or looked for someone else, but the traditional boss-employee relationship didn’t feel right to her. Plus, she chafes at the administrative aspects of running an office.
Meditating with her husband every morning eventually helped Krug surface what really matters to her and to stay focused on her vision day to day.
In doing so, Krug realized she wanted to keep growing her business at a fast pace — but valued the freedom to live the way she wants. That means not running a traditional office where she would have to supervise employees. Although she works around the clock, she likes to live a mobile lifestyle, where at any given time she may be working from Tokyo, Sundance or from poolside in Miami.
Related: 4 Differences Between Solopreneurs and an Entrepreneur Working Alone
Ultimately, Krug opted to continue relying on contractors to help her grow, as she has done successfully from the beginning. She was energized by working with contractors and consultants, like the product design specialists who helped her create BetterBack. They were self-motivated because of their own desire to build a successful business.
Even with her business growing rapidly, Krug has not had to change a lifestyle she loves because of her conscious decision to run the firm the way that works for her. She spent the last six months working all over the world. In the era of the million-dollar, one-person business, that’s a choice that is available to an increasing number of entrepreneurs who are open to a brand new way to scale.
The Million-Dollar, One-Person Business(Random House) was released on January 2, 2018.
Published at Mon, 15 Jan 2018 13:00:00 +0000
