The Million-Dollar One-Person Business: Fact or Fiction?
I follow the modern day “one-person business” entrepreneurs like Dan Koe. (More on that below)….
❤️ I seriously love this human - I view him as the “male version of me” in reflection of how I think, write and imagine the new modern day business to be - but he is getting there much faster than me ( props).
Buyer Beware:
As a solo-preneur, everyone is selling the “dream” and “best self” BS.
Yup. Who doesn't fantasize about running a million-dollar, one-person business?
But hold up.
Does the math work here?
Can one person seriously rake in a million bucks in revenue alone?
Recently , (another quick framing example) I tapped into a masterclass from another unicorn Matt Gray, but his multi-million dollar business reflected the actual phases he went through that made this new hype a bit more grounded.
👆🏻Here’s a snapshot, and then I’ll get on with the salience of this insightful and helpful dialog.
Is It Truly a One-Person Business?
Well, curiosity got the best of me, and I had to dive into Elaine Pofeldt's
"The Million-Dollar, One-Person Business, Revised: Make Great Money. Work the Way You Like. Have the Life You Want."
I found some truths!
Unveiling the Enigma | Million-Dollar Solo Enterprise
The notion of a million-dollar, one-person business appears like an enchanting reverie, doesn't it?
The promise of financial independence without the burden of managing a team of employees seems alluring.
Nevertheless, for service-based enterprises, one question persisted in my mind: How does the arithmetic align to generate a million dollars in revenue with just a sole proprietor?
To satiate my curiosity, I immersed myself in the pages of Elaine Pofeldts 👇🏼
The Million-Dollar, One-Person Business: Make Great Money.
Work the Way You Like. Have the Life You Want.
Here's my take: The EVOLUTION from the QUIET QUITTING is HERE.
Learn the latest pioneering tactics from real people who are bringing in $1 million a year on their own terms.
Diverse Business Models for Million-Dollar Enterprises
The book delves into an array of business models, encompassing both product-based and service-oriented ventures.
However, the term "one-person" can be slightly misleading, as these businesses may not necessarily be run entirely solo.
Although each model has the potential to generate a million dollars in revenue annually, the profits, and consequently, the take-home earnings, differ significantly.
Physical Product-Based Businesses through
E-commerce
Such businesses are referred to as "one-person" entities because they outsource manufacturing to partners or utilize third-party distribution and shipping services.
The proprietor manages front-end design, marketing, and order capture, while others handle production and delivery.
For instance, Amazon drop shipping falls under this category.
I have a online store for Evoq Beauty (started when I was 23) and use a brick and mortar and ECOMMERCE vertical.
Educational Content Creators for Digital Products and Courses.
Franchises and Licensee Models:
In this design, entrepreneurs sell their intellectual property to be delivered and executed by others.
For instance, Brené Brown earns training and certification fees from her Dare to Lead facilitators and Alex Hormozi sells his Gym Launch formula to gym owners.
Professional Coaching, Consulting, or Agency Service Firms:
This includes Virtual Assistant agencies, Marketing firms, boutique consulting, and high-end coaching services.
The Common Denominators of Million-Dollar Ventures
Several factors underpin the success of these million-dollar businesses:
Automation:
Implementing efficient systems and tools to operate with minimal staffing.
Outsourcing:
Engaging specialized firms to handle operations that would typically be conducted by employees, such as manufacturing, packaging, or shipping.
Alternatively, contracting external entities for service delivery, such as outsourced bookkeeping, graphic design/copywriting, virtual assistants, and subcontractor consultants.
Capital Investment: Many of these models rely on upfront capital for inventory, advertising, or onboarding systems and partners.
Is It Truly a One-Person Business?
Despite being dubbed "one-person" businesses, the book's central premise revolves around establishing such ventures primarily through outsourcing. Instead of hiring employees, entrepreneurs bring on manufacturing and shipping partners or contract service providers.
However, this raises a crucial concern. If individuals delivering the majority of your services are considered contractors, this may be legally problematic in certain states, particularly if they work predominantly full-time.
It's vital not to dismiss agency team members or consultants as mere assets for outsourcing, as they are human beings with significant roles in the business.
Even with shipping partners or franchise owners, the proprietor must still manage and oversee these relationships, demanding strong leadership skills.
The Reality of One-Person Enterprises
Among the models discussed, only certain niches, such as specialized consulting/coaching, digital products, and licensee businesses, genuinely qualify as one-person endeavors.
However, it's essential to thoroughly assess the feasibility of running such ventures effectively.
Back to the BRO’s.
Justin Welsh and Dan Koe have achieved success in growing million-dollar solopreneur businesses through digital products and courses.
Nonetheless, making a million dollars by selling courses priced at approximately $200 necessitates reaching an audience of 5000 people annually.
Establishing such a substantial following, as demonstrated by Dan with over 300K YouTube followers since 2017, can be challenging for solo entrepreneurs with a modest email list.
Inequity in Profit Margins
Although business types boast million-dollar revenues, their profits vary significantly.
The cost of delivering products and services in these models differs widely, especially when a substantial portion is outsourced.
Let's consider the e-commerce model, for instance.
Selling 40,000 journals at $25 per journal might yield $1M in revenue.
However, after factoring in the 50% product cost and manufacturing margin, as well as the 25% share paid to the shipping partner, the net profit amounts to $250,000.
Same with my Evoq Beauty Skincare. I have a license fee on my formulas, packaging, shipping, labels, etc. Above costs, it’s my time in FILLING all of my products as well.
So, in…contrast, the licensing model presents a different scenario.
Selling productized knowledge without physical delivery costs allows for higher profit margins.
The revenue primarily goes into marketing efforts, and with adequate volume, the profit percentage differs.
I can say this. You’re not paying for your fab “face cream” your paying for the VOGUE AD that is placed.
The Ultimate Question is THIS…..
Pursuing a "Million-Dollar,
One-Person" Dream Business is Personal.
Contemplating these intricacies, entrepreneurs must decide whether their goal is merely a million-dollar revenue or a more comprehensive and sustainable business.
In the end, the right path for your entrepreneurial journey lies in your hands.
🦄 PS: ONE LAST BIT…..to support you.
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