When Apurva Batra, now 29, walked into a supervisor’s office at Chevron and gave notice that he was leaving his engineering job, the incredulous look on his manager’s face said it all.
Batra read the look in his eyes as, “Why would you want to quit this? No one does this.”
It was easy to see why someone might wonder about Batra’s decision, given the prestige, attractive pay and social approval that came with working at the oil and gas giant.
But Apurva realizes that saying goodbye to his well-paying, five-year career was the best move he could have made. He genuinely liked his colleagues but many days when he went to work, he’d said to himself, “I’m going to spend the rest of my life going into someone else’s office, at a time someone else prescribed and do meetings for someone else. At the end of the day, the reward of that is going to go to the boss.”
Recognizing he was meant to be an entrepreneur, Apurva didn’t want to force fit himself into the corporate mold and live a life of regrets. Taking a leap of faith in 2015, the Houston resident founded a one-man business called FlexiblePouches, which makes pouches for packaged food and other products. He hit annualized revenue of $1 million his first year and expects to bring in $3 million in revenue this year at the profitable company.
Apurva is part of an exciting trend: the growth of the million-dollar, one-person business. A growing number of nonemployer firms—those with no paid employees but the owners—are bringing in $1 million to $2.49 million a year in revenue. Their numbers hit 36,984 in 2017, up 2% from 36,161 in 2016, according to just-released data from the U.S. Census Bureau. That count rose 38% from 26,744 in 2011. Most non-employer firms are solo businesses, but some are partnerships and family businesses.
There are also an elite group of 2,229 nonemployer firms bringing in $2.5 million to $4.99 million (up from 2,090 in 2016) and 356 bringing in $5 million or more, up from 316 in 2016.
Meanwhile, many entrepreneurs are hitting six-figures and beyond—and their numbers are rising. There were 1.97 million bringing in $100,000 to $249,999 (up from 1.86 million in 2016); 629,837 generating from $250,000 to $499,999 (up from 590,948 in 2016); and 282,819 generating revenue from half a million to $999,999 (up from 264,140 in 2016).
How are they generating this kind of revenue in tiny, one-person firms? Among the top industries were professional services (9,745), construction, (4,699), real estate (3,050), retail (2,976), healthcare and social services (2,791) and finance (2,781).
Growth in new business creation was highest in the low-tax states of Florida (9.3%) and Texas (6.5%), as well as in Massachusetts (5.7%), where e-commerce surged.
Many trends are contributing to the growth of these high-revenue, one-person firms. The cost of starting a business has come down, thanks to cloud-based technology and low-cost apps and digital tools that make it easier than ever to automate routine tasks. Giant freelance platforms have made it possible to find contractors easily, allowing owners to extend what they can accomplish. The growth of the internet has made it easier for entrepreneurs like Batra to find resources to manufacture their goods and to advertise around the world. And there are many outsourced fulfillment and drop shipping services that simply product delivery for those who sell goods.
To be sure, the vast majority of one-person businesses never get to $1 million in revenue. For some context, there were 25.7 million nonemployer firms in 2017, up by 3.6% from just under 25 million in 2016. Among these firms, the average annual revenue was $46,978. (The Census Bureau doesn’t publish profit figures, so it is not possible to determine how much owners of the firms in the research are taking home).
The data doesn’t show how many of the firms are full-time versus part-time, but there are indicators that some of the growth is driven by side hustles. In 2017, there was a 26.5% increase in the transportation and warehousing sector, the category to which rideshare driving belongs, with 230,572 brand new establishments. Rideshare driving is on the lower end of the pay scale for solo entrepreneurs.
Although not every business will make it to $1 million, every solo entrepreneur can learn valuable growth strategies from those who break into the seven figures in nonemployer firms. Here are the stories of Apurva and two other entrepreneurs who pulled it off.
Apurva Batra, Houston
Although Apurva Batra yearned to quit his job at Chevron for years, he didn’t do so abruptly. With dreams of becoming an entrepreneur filling his mind, he tucked away money in his savings account on a regular basis, long before giving notice. Although he knew that he had plenty of runway to take risks while in his twenties, he still needed to pay his bills. “Everyone cares about security,” he says. “But I think it’s something you make for yourself.”
Batra threw himself into researching potential businesses he could pursue. He set several criteria for the business he would start: It would have to be in the well-paying B2B space. It would need to be based on repeatable processes. And it offered an opportunity to scale. “I wanted to create something of value that is a cash-flow generating asset,” he says.
As he conducted his research, he was drawn to the idea of a product-service hybrid. “Service businesses are easier to start. Product businesses are easier to scale,” he says. “Being a hybrid offers the advantages of both.”
His research led him to creating plastic pouches for groceries. Moving back in with his parents, he tapped into $25,000 he had saved during his year as an engineer to get started. Initially, he flew to China to research his manufacturing options. He then invested $10,000 in inventory, printed some business cards and headed to the natural-products trade show circuit to pick up clients.
Although he started making sales at trade shows, what proved to be more fruitful was promoting his website using Google advertising, which he taught himself how to do using YouTube videos. It was hard for a startup like his to win business with food giants, but he found that small and midsize companies were very receptive. He built a reputation for being willing to do ultra-small print runs, thanks to an investment he made in a digital printing tool needed. “That press changed the game,” he says.
So far, Apurva has not hired any employees. As an avid word traveler, he’s not sure if he wants to take that step yet. “If I have employees, I’ll have to manage them closely,” he says. “I might lose some freedom. That freedom is what I started the business for.”
But for now, he doesn’t have to make an immediate decision on that front. He has a lifestyle and business he loves and has no regrets about leaving the world of traditional careers and its vestiges, like commuting, behind.
“I get up every morning and see the traffic outside and am not envious,” says Batra.
Hafeez Lakhani, New York City
Hafeez Lakhani, now 37, didn’t set out to become an entrepreneur when he first started his career. Born in Hyderabad, India, and raised in South Florida, Lakhani, a gifted student, attended Yale University and earned a Bachelor’s degree in math and economics.
Lakhani initially worked as a Wall Street commodities trader, and, having enjoyed a past stint at a camp counselor, became a volunteer SAT prep coach at a community center in Queens on the side. Leaving Wall Street to pursue his passion for writing fiction, he doubled down in his work with students and became a freelance SAT tutor to support himself. With a perfect score on both the SAT and ACT, he had plenty of credibility in the college preparatory area.
Lakhani was quite successful as a fiction writer, publishing his fiction in literary magazines such as The Southern Reviewand Tikkun and winning fellowships from PEN Center USA and The Center for Fiction. He was also recognized by Best American Essays and twice nominated for a Pushcart Prize. He is now writing a novel.
However, Lakhani could not ignore his impact as a tutor. “My students were seeing dramatic leaps in their scores,” he says. Soon he was receiving requests to help refine students’ college application essays, work that tapping into his writing experience. “I was helping them to excavate the most interesting stories from their experiences that were relevant,” he says. With referrals building up, he decided to go out on his own and in 2013, formed Lakhani Coaching in New York City.
“As I got busier, I became aware of my impact and had to keep raising my rates,” says Lakhani. “I had to ask myself, ‘How does it make sense to scale?’” Lakhani built up a roster of part-time tutors with elite test scores, who worked as contractors.
Hitting $1.6 million in revenue in 2018 as a solo entrepreneur, Lakhani hired his first full-time employee in December of that year. The business currently works with 70 students, mostly in person or by Skype. It currently includes an opera singer and a former social justice worker.
Today, at Lakhani Coaching, the father of three brings in more than $1 million a year in revenue, offering academic counseling, test prep and help with more intangible aspects of the student experience such as goal-setting, character development and motivation of students to pursue passions outside the classroom.
He now charges $1,000 an hour for his services but also offers help from his lead instructor for $550 an hour, a senior instructor for $375 an hour, and an associate instructor for $260 an hour. Aware that these rates are not affordable for many families, he added scholarship program two years ago and just awarded the second scholarship.
One of the most important elements of Lakhani Coaching’s program, he says, is character development. This aspect of the business was hard for me to visualize, so, to see what it looked like in action, I asked Lakhani to chat on speaker phone about it with my 15-year-old twins, who will be entering 10thgrade.
“Let’s imagine you are sitting around a dinner table with a limited number of seats,” he told them. “What will make you the most interesting contributor to that dinner table conversation? What do you add to the discussions that no one else can? That is how we start to understand character.”
As he went on to explain, college admissions officers care about students being involved in activities outside of school primarily to gain an understanding of what the students will contribute to an intellectual community.
He suggests students keep a journal to record their impressions of powerful experiences from their activities to mine for future college essays.
Since the college admissions scandals, at least half a dozen people have approached Lakhani to ask how to start their own education consulting business. “I worry about anyone entering the space because they think it is a good business, not because they want to be a great educator,” he says.
He believes education consulting should be a personal calling, as it is for him. “I loved being a camp counselor, and I love being an educator,” he says.
Lakhani is in a position where he could potentially scale considerably but is moving very carefully on that front, asking himself, “Do I want to have 1,000 students—and if I did, would it dilute the impact?”
“I think I could scale by five to 10 times what I am doing now and have the right people in place to maintain quality,” he says. “I don’t want to become a factory.”
For the moment, he says, “I’ve come to realize I have to have a finite number of people I can help. The more time you’re able to really invest in people and really make an impact, the more it comes through.”
Kendall SummerHawk, Tucson, Ariz.
After 13 years in healthcare IT, Kendall SummerHawk, now 59, decided to pursue a long-simmering passion: Helping women change their relationship with money as a money coach. “My whole purpose is to empower women to increase their earning power through entrepreneurship,” says SummerHawk, based in Tucson, Ariz. “I believe that as they make more money, they can solve a lot of the world’s problems.” SummerHawk points to research that shows that when women work, they invest 90% of their income into their families, while men invest 35%.
Drawing on what she’d learned about entrepreneurship from her mother, who owned a successful hairdressing business, and the professional knowledge she’d built in her technology career, SummerHawk went into business 18 years ago, simply aiming to replace her income, then in the $53,000 to $55,000 range. She focused on teaching women how to find their ideal clients and set prices in workshops she offered and getting an often brutal crash course. “My first year in business was torture,” she recalls. “I made $7,000.”
Realizing she needed to find out how to market herself more effectively, she took a teleclass on how to create an engaging business card and immersed herself in learning about marketing. As she learned more, she dove into tasks like building a robust email list and public speaking. As she reached more clients, she focused on helping clients package their services as entrepreneurs, setting prices and developing core sales skills. That helped her break into six-figure revenue.
“It was about showing up consistently, with great content,” she says. One tip that helped many of her women clients in building confidence around their pricing, she says, was encouraging them to state their desired fee, out loud, one hundred times a day, so it became as automatic as saying “Please pass the salt.”
Hovering in the six figures for several years, SummerHawk was determined to grow her business past that and set a goal in 2006: “I decided I wanted to be a million-dollar business owner,” she says. “You have to want it.” She started using that goal as a filter for making decisions: “I would say, ‘As a million-dollar business owner, how do I handle my email?’” she recalls. “’How do I handle getting paid by my clients?’ I started making lots of changes by seeing myself as a million-dollar business owner.”
Those changes included hiring someone to handle tasks that were draining her time, such as cleaning her house, doing her grocery shopping and running errands. She also changed her business model. After introducing one-on-one coaching, she’d been charging clients by the month but shifted to offering a more intensive, year-long program for $10,000, a fee that reflected the financial value she determined she was bringing them. Fifty clients from her mailing list, which then included less than 5,000 people, signed up. By 2007, she made the leap to seven figures and has brought in seven figures or multiple seven figures every year since then, she says.
Rather than trying to continually win brand new clients, SummerHawk focused on developing fresh offerings for existing customers. “I have an attitude of ‘A client for life,’” says Summerhawk.
In 2009, in response to the feedback she was getting, SummerHawk began certifying some of these clients as coaches in the methods she uses, so they could teach others to do what they were doing.
“I realized I couldn’t have the impact I wanted to have alone, even doing groups,” she says. “I believe in the ripple effect.”
For SummerHawk and the growing number of entrepreneurs breaking six and seven figures in very lean businesses, it will be interesting to see where those ripples lead. Very likely, as more solo entrepreneurs realize what’s possible, we’ll see a lot of exciting new case studies emerge.
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This Article first appeared in Forbes
