The Rise of 7-Figure Small
The number of solo or tiny businesses with no employees making a million or more in annual revenue continues to dramatically climb.
Is it really possible to start a 7-figure company without employees or investors?
Absolutely. I’ve done it three times myself, and as we’ll see, I’m far from alone.
The first step is to forget the notion that you have to raise money. Yes, it’s not only possible to create a seven-figure business without investors — it’s preferable.
I know in many corners that’s not the popular conception of what starting a business means these days. But as a serial entrepreneur who’s started several profitable seven-figure companies and one highly profitable eight-figure company — all without investors — the popular conception is not necessarily true or desirable.
Fortunately, the tide is turning in favor of saying no to investors. That means saying goodbye to insane growth targets to satisfy those investors and hello to sanely ambitious small companies that serve the needs of customers and the people who do the work.
In his book Company of One, solopreneur Paul Jarvis also argues against the hockey-stick growth mindset required for a company to be strategically acquired or go public. He obviously practices what he preaches with his own business, Fathom Analytics.
And he’s not alone in that approach. The internet, combined with off-the-shelf technology, has driven the creation of countless highly profitable small businesses that exist primarily to satisfy the economic and creative needs of the founder(s).
This doesn’t mean that you have to barely scrape by — quite the contrary. You can make ridiculous amounts of money if that’s what you desire.
The point is that you should decide how much is enough. If you turn to investors, though, your version of enough will invariably be less than what the “money people” would prefer.
A Million-Dollar Company of One?
Most people start off as freelancers, consultants, or some other form of independent contractor. At this stage, you’re generally not thinking about starting a 7-figure firm, you’re trying to replace a salary.
But here’s the thing.
What you’re really starting is an expertise-based business. When you think of it that way and begin strategically (as you’ll learn in this course), it actually is possible to create a high revenue solo or very small company in the form of a personal enterprise sooner rather than later.
One of the best things about riding the early wave of digital entrepreneurship is that I’ve helped and watched many solopreneurs enjoy significant financial success. I knew that the number of seven-figure businesses created by people like me was significant, but it seemed like we were hidden from mainstream awareness.
But it wasn’t until a podcast interview I did with Elaine Pofeldt, a senior contributor at Forbes magazine, that I realized that we weren’t hidden any longer. In her role as a business journalist, Pofeldt happened upon a fascinating trend — the number of businesses without employees that made over a million dollars a year was growing at an impressive rate.
Looking at the Census Bureau’s “nonemployer” statistics (what the U.S. government calls businesses with no employees beyond the owners), she found a 33% increase in businesses earning between $1 million and $2.49 million in revenue between 2011 and 2015.
This insight led to Podfeldt writing a book on the topic, The Million-Dollar, One-Person Business. She used her journalistic chops to profile scores of “7-Figure Small” business owners.
Far from some “get rich quick” scam or fanciful pipe dream, Pofeldt revealed the stories of smart, hardworking people who used inexpensive technology and the reach of the internet to create tiny firms with outsized results.
The trend kept accelerating. The number of nonemployer businesses earning between $1 million and $2.49 million in revenue hit 41,665 in 2018, up from 39,494 in 2017, according to updated data from the U.S. Census Bureau.
That’s a lot of million-dollar tiny businesses. And there’s no reason to think this trend wouldn’t continue — and even accelerate — regardless.
Then came 2020.
The Covid-19 pandemic has accelerated the “virtualization” of life and business. Add to that the number of Gen Xers and young Baby Boomers who want to avoid being laid off in the face of increased automation and artificial intelligence, and we’re in the midst of a digital business gold rush.
The 2022 Census Bureau data revealed the most recent results, which, while not unexpected, are still startling when you consider how many of these powerful tiny businesses now exist:
The number of million-dollar one-person businesses and partnerships in the U.S. has reached an all-time high, essentially doubling from 2021 to 2022 for the first time ever — in what may be an indicator of what’s to come.
There were 116,803 nonemployer businesses reaching $1 million or more in revenue in 2022, the most recent year available from the U.S. Census Bureau statistics. That’s up from 57,222 in 2021.
The largest category of million-dollar, one-person businesses — professional services — grew to 16,279 businesses in the $1-2.49 million category, up from 13,576 in 2021. Another 2,465 hit $2.5 to $4.9 million, up from 871 in 2021.
Professional services include solo attorneys and accountants, but also marketing consultants and a wide array of management advisors — two huge areas of expertise for 50+ corporate refugees. Along with freelancers, these are exactly the types of service providers that the Personal Enterprise approach benefits.
Beyond the money, there’s another huge perk. These businesses are largely location independent, meaning the owner can live anywhere in the world they want.
Rest assured that the number of these 7-Figure Small companies will continue to grow year after year, but you’re certainly not obligated to aim for that level of revenue. The idea is to create the perfect business for you.
Maybe a solid six figures and a great lifestyle are what you’re after. In 2018, there were 2.07 million businesses without employees bringing in $100,000 to $249,999; 668,152 generating from $250,000 to $499,999; and 297,498 generating revenue from half a million to $999,999.
Here’s the thing, though.
If you take a smart approach to building a six-figure business, you can choose to take it to seven or even eight-figures without some extreme level of extra effort. I’ll give you that approach in this course along with several examples of people who did just that.
In Company of One, Jarvis says that “each year it becomes easier and less risky to work for yourself and still make a decent living.”
That’s true in my experience, and you might do a whole lot better than decent — as long as you work for yourself and your customers and not for investors. And given the fact that a 50+ individual is much more likely to succeed than a young person, the odds are stacked in your favor with the right approach.
At this point, you’re likely wondering, okay … how do I do this? Do I just dive in, or is there an approach that makes success more likely?
Smart questions. There is a big-picture methodology to keep in mind that makes success more likely, and it’s called the personal enterprise approach.