Elaine Pofeldt

I’m ready to be here, Luis. It’s lovely to be here with you and Kamala.

Elaine Pofeldt

Well, Luis, I have been writing about entrepreneurship for many years, and one thing I noticed was that almost all of the coverage of entrepreneurs focuses on high revenue ultra-scalable businesses that we see in Silicon Valley. Those are exciting, but there’s a whole other world of small companies that make up the majority of companies in the US that don’t get covered.

Elaine Pofeldt

When I came across US Census Bureau statistics showing that there were businesses with no employees that were breaking one million in revenue, I got curious. That touched off the journey that led to this book.

Elaine Pofeldt

Well, one of the million dollar business ideas isn’t to do it alone.

The Census Bureau defines businesses to employees as non-employer businesses, so I use that as my definition.

When you scratch the surface, a lot of the owners of the businesses in the book do have a team. They might use contractors, or outsource services, or automation so it would be a virtual team I guess, but they’re not doing every little bit of minutiae on their own.

Elaine Pofeldt

In fact, that’s part of their overall outlook on running the business. They don’t think it makes sense to enter every transaction in quick books themselves for instance. They understand that it’s better to put their time and energy into high-value activities that will grow the business.

Elaine Pofeldt

One of the million dollar business ideas people do is they make an effort to figure out ways to accomplish more than the typical one-person business can. They give it a lot of thought. They provide a lot of thought to strategy. They set aside time to step back from the business and think about how they’re using their time. It’s because, as you both know, when you’re in an ultra-lean business, time is your main commodity. If you’re wasting it, you won’t get to one million.

Elaine Pofeldt

You have to think about, “How do I deploy my time in a maximum effective way that I can to generate not just revenue but profits?”

If you’re pouring all your revenue back into the business, you might not have any money to take out to live on, which in most of the ultra-lean businesses, they are lifestyle business people do want to live on them. It’s not like Amazon where you keep on reinvesting in it, and eventually, everybody cashes out.

There is a conscious effort among the entrepreneurs that I interviewed. I interviewed the owners of more than 30 businesses for this book, and probably all told about 50 of the million-dollar one-person businesses in partnerships that are out there. The census bureau found in 2015 that there were more than 35,000 of these businesses, and that number was up 33% since 2011, but it’s still a relatively small number.

Elaine Pofeldt

Having the small sample size was helpful to me because I could see common threads even though they were in very different businesses. Some were in e-commerce, in manufacturing, informational content creation things like webinars, professional services, personal services like nutritional coaching, and real estate. They’re all very different industries, but there was a real emphasis on productivity and efficiency and preserving their lifestyle so that they weren’t just working 24/7.

Elaine Pofeldt

Another million dollar business ideas that I noticed was people are hyper-specialized.

The folks that are running these businesses might have multiple revenue streams, but they are not in various industries.

Sometimes people can spread themselves too thin, and as entrepreneurs, we have a lot of ideas, and it’s easy to spin off in all different directions. These folks maintain their productivity by getting very specialized in what they do best.

Elaine Pofeldt

For instance, Meghan Telpner is a nutritionist, and she runs a site called meghantelpner.com. It’s a wellness site. She went up healing herself from Crohn’s disease. She’s been in remission for ten years by changing her lifestyle. She went back to school, left an advertising career and studied nutrition.

Elaine Pofeldt

Meghan has created a variety of different revenue streams within her expertise. She’s written a couple of cookbooks with Random House. She launched the Academy of Culinary Nutrition, which is a school to train other people both nutritionists and lay people in her cooking methods. Then, she has individual products. Her first one was called the green smoothie fast, and it showed people how to go on a three-fast drinking healthy green smoothies, but they’re all in this core area. She’s not branching out into e-commerce or real estate or something different.

I think the deeper we go into something, the more value you can bring, the more you know about the conversation in that industry and what’s been done before, and what hasn’t been done.

I think that’s one of the most essential million dollar business ideas. It’s also your selling point.

Elaine Pofeldt

One of the business brokers whom I’ve interviewed about this subject, David Fairley, talked about e-commerce stores and how they can compete against Amazon when they’re just one person, and the secret is that the owner brings their personality and expertise to the subject.

He was giving me a list of some whacky sounding types of businesses like sites to sell things, along with the lines of ceramic garden gnomes. With stuff like that you would think, “Who would go to that website?” but apparently, some people love ceramic garden gnomes and will buy a lot of them, and the people that run these sites get specialized in their expertise.

Elaine Pofeldt

That makes them different and more fun to deal with than the big companies of the world that have that sort of corporate personality.

Elaine Pofeldt

It is funny.

Elaine Pofeldt

You can sometimes get too specialized, but it’s not always a mistake to be specialized. There might be something that you do that only a few people can do. In which case, you might be able to charge a very high fee for that expertise.

One example would be if you’re a specialized programmer who targets Wall Street banks, you might be able to charge a thousand dollars an hour for your skills if they aren’t that many programmers who do what you do. That doesn’t work for everybody. Sometimes you can introduce a very specialized product, and the audience is small. It’s virtually non-existent in which case, you don’t have much of a business.

Elaine Pofeldt

But the beauty of business today is it’s easy to test market things.

It’s so easy to put up a website and sell something or to put up one product on Amazon. You don’t have to make a huge investment to see if there is an audience.

Elaine Pofeldt

Or you can go through your network if you’re selling a professional service, and ask people, “Would you pay money? I’m planning on introducing this service. Would you pay this much for it? If you wouldn’t, why not? Why isn’t it useful to you?” Get some feedback from people that you know well enough of course, but it’s easy to test.

Don’t hold yourself back if you think your interest is wanky. It might not be as wanky as you think.

Elaine Pofeldt

Well, Luis, one thing that empowers them is giving themselves the financial runway.

I think I’m encouraged to think of business as something you leap into with two feet, never look back, burn your bridges, but a lot of people have financial responsibilities where they can’t just quit their job. I noticed a number of the entrepreneurs in the book didn’t leave their job. They test marketed their idea while they still have a job, and that gave them enough cash flow coming in to act on their plan.

We all see these restaurants in our towns or communities where it opened and then it’s closed in two months, and you realize what happened. Nobody knew that it was open, the owner ran out of money, and this is their whole lifestream. They put several hundred thousand dollars into it, and now it’s closed, and it went nowhere because they didn’t have enough cash to give it time to take root.

And so, these successful folks have avoided that mistake by giving themselves time and being patient about it.

Elaine Pofeldt

The other thing I noticed is they are perpetual learners. The people that get to million-dollar one-person businesses or partnerships are not linear thinkers based on my observation. They are continually taking in feedback from all directions. They don’t expect there to be five easy steps to starting and growing a business. They put their ideas out there, they gather information in real time, and they react to it in real time. It takes a certain amount of mental output to do that. It’s not a linear thing.

People might make mistakes and might have to course correct, but they’re prepared for that because they have a bigger vision of the life that they want. They’re committed to getting there, and to make the mistakes that they can learn from, and part of that is to have a few financial reserves to do it. It doesn’t mean they have a lot.

I would say the majority of the people in the book were regular people who started with less than $5,000, and in many cases, less than $1,000. It wasn’t that they had a giant kitty to put into it, but they did give themselves enough room in their lives to experiment and learn.

Elaine Pofeldt

That’s what I would leave the listeners with regarding million dollar business ideas. You have to be open to new feedback. If you want to grow a business like this, the world and technologies are changing very fast, and if you’re receptive, there’s a lot of great information out there that you can take in and apply to building your own million-dollar one-person business.

It’s not going to happen passively. I hear all kinds of things about passive income. Maybe ideally in some future year, you’ll set-up some things that bring in passive income, but in the beginning, there’s nothing passive about it. It’s an active process, and it’s something you have to enjoy.

Elaine Pofeldt

But if you do, it’ll be amazing because you won’t have the financial stress that a lot of people do in solo businesses and partnerships where they’re just scrambling from one project to the next, can barely afford to get health insurance, one blown out tire is a crisis. You won’t be living like that anymore, and that’s a nice reward. It’s hard to achieve, but it will bring you a lot of financial peace and freedom.