Number Of Million-Dollar, One-Person Businesses Keeps Growing

Forbes

4 days ago

Sara Connell set a big goal for herself four years ago—to break $1 million in annual revenue at her business the Thought Leader Academy. A former advertising executive, she found that workplace stress was taking a toll, contributing to depression and an eating disorder. After spotting the the memoir, Holy Hunger, written by eating disorder survivor Margaret Bullitt-Jonas, in an airport bookstore. Reading it gave Connell inspiration to leave her job and heal. 'Even if I end up on the street, I'm not going to do this anymore,' she told herself.
That decision, back in 2000, paid off. Connell has broken the million-dollar mark at the Thought Leader Academy, based in Chicago, for the past four years.
The Thought Leader Academy helps its clients build a platform in their industries by helping them develop their writing and speaking platforms with the help of writing coaches, mastermind sessions and group mentorship programs; it also holds live events such as the upcoming three-day conference in New York City. Called Women STARTING MOVEMENTS, it is for coaches, writers and visionaries who want to build seven-figure businesses while rallying others around their mission. Along the way, Connell, who holds a master of fine arts in writing from Northwestern University, has written seven books, the latest of which is The Download, where she guides thought leaders in using neuroscience techniques to tap their biggest ideas, and built a YouTube channel, Thought Leader Media, with more than 100,000 subscribers.
Connell is part of a trend that keeps accelerating: the growth of million-dollar, one person businesses. The number of nonemployer businesses breaking $1 million grew to 117,060 in 2023, up from 116,803 in 2022, according to statistics from the U.S. Census Bureau. The number in 2022 more than doubled from 2021, when it was 57,822.
Nonemployer businesses, as defined by the U.S. government, don't run payroll. They are typically run by solopreneurs but sometimes by partnerships. Although they are staffed by the owners, these businesses do include contributions from other people. They get things done through hiring contractors, outsourcing to services such as Fulfilled by Amazon, automation and increasingly, AI.
There are many factors contributing to the trend. A growing number of Americans are taking control of their careers at a time corporate life is increasingly harsh, a white-collar job shortage lingers, and fears of AI loom. They are building newly optimistic futures for themselves in self-employment as an alternative. Some are starting side hustles that blossom; others, like Connell, are leaping into full-time businesses that leverage the skills, knowledge and relationships they've been building all along, whether in their existing careers or other parts of their lives. Still others are pushed by layoffs to pursue long-dormant business ideas.
To be sure, million-dollar, one-person businesses are still outliers when it comes to their revenue. There are 30,427,808 nonemployer businesses in the U.S., and the average revenue is $57,611. That is less than the U.S. average wage of $67,920, as tracked by the U.S. Bureau of Labor Statistics.
However, some of the businesses the Census Bureau tracks are part-time side hustles—not full-time pursuits that parallel full-time jobs.
And million-dollar, one-person businesses are likely to continue multiplying, and learning from each other, as more people see they are a way to bypass a trend that keeps many from starting businesses: lack of access to capital.
While building a startup often requires someone to have connections to private investors known as angels or venture capitalists, most one-person businesses are funded by the owners using scrappy, capital-efficient methods. If they scale up, it is usually through bootstrapping, or self-funding through cash-flow.
Where the growth in million-dollar, one-person businesses is
So how do you find your million-dollar opportunity? It helps to choose the right category of business in the first place--one where it's possible for a solopreneur to get to $1 million. The largest group of million-dollar, one-person businesses is in retail niches, such as ecommerce, with $16,141 businesses at $1-2.49 million and 4,216 at $2.5 million to $4.99, the Census data shows. Closely following are professional services, with 16,654 businesses at $1 million to $2.49 million and 2,503 at $2.5 million to $4.99 million. Another hot category is wholesale, with 11,383 businesses at $1-2.49 million and 1,684 at $2.5-$4.99 million.It is also helpful to keep an eye on the categories that have had a significant growth trajectory in recent years. I have been writing about this trend since 2012, when it started taking off, and some categories have had more signficant increases than others since then.
If you're looking for an idea that will replace a traditional career, you'll also want to keep an eye on sustainability. Some industries see cyclical booms. Examples are construction, an industry that currently has strong growth prospects, according to Deloitte, and mining, driven in part by the use of lithium in electric-car batteries. These types of industries are ideal if you like to jump quickly on economic trends when they're hot but also accept there may be slow cycles, too.
Other niches, such as professional services, have slowly and steadily offered opportunities to break $1 million in the past decade. Despite all of the warnings from business gurus not to 'trade time for dollars,' some non-employer professional services firms in fields such as accounting are consistently breaking $1 million in revenue by offering valuable services to clients who keep coming back.
Despite all of the ads on social media promising a way to make 'passive income,' building a sustainable million-dollar, one-person business is often a multi-year effort with lots of experimentation. After leaving her advertising job, for instance, Connell took on freelance and part-time work while getting her coaching certification and starting a coaching practice in 2004. However, she says she struggled for years to earn a consistent income as a coach. 'It was very difficult to put together a profitable business,' she says.
Her breakthrough came when she had broken six-figure revenue as a coach in approximately 2016 and began shifting her focus--with the help of her own coaches-- from bringing in revenue to building her profits and cashflow. She also focused on her mindset, working on healing her own past trauma, using techniques such as tapping.
'I have noticed a huge connection between trauma and earning, particularly for women,' she says. 'I kept smacking up against an invisible ceiling until I did that work. That was the inflection point, that took us to a million dollars consistently and kept us growing."
Introducing the Thought Leader Academy helped her bring the business to the $200,000 mark and beyond. This was one of her first significant shifts from offering one-on-one coaching to her clients to an academy model, focused on teaching clients in group settings.
One particularly popular offering has been bootcamps, such as the Bestselling Book Bootcamp, designed to help clients determine what they will write and outline their books. On the recommendation of one of her coaches, she gave each bootcamp a theme, such as 'writing a transformational book. She rolls out downloadable content that supports the bootcamps over the eight weeks beforehand to build community around the ideas.
'We did eight weeks of sharing about 'What's the difference? Why might one want to focus on transformation versus information?'" she explains. 'It created interest and curiosity and also differentiated this bootcamp from another one.'
Public speaking helps her attract her ideal customers. 'We went to $1 million with no ads, no social media,' she says. Today, her YouTube channel also helps attracts like-minded clients. She surveys her ideal customers before rolling out new offerings to make sure there is interest in purchasing them before fully developing an idea.
Connell initially did most of the work of the business herself, but realized that to scale her revenue and profits, she needed to build a virtual team to support her. Today, she relies on six service providers: contracted writing coaches and vendors such as graphic designers, a virtual assistant and an automation contractor to extend what she can do individually. 'We have wonderful people I consider part of my team, but they're not a team from an employee standpoint,' she says.
As for the future, Connell plans to keep growing the business, with an eye toward bringing clients a fresh take on what's happening in the market.
'It really lights me up to think about what's happening in the world, and what's happening in the marketplace, and to help someone figure out their book's focus and how it will be positioned,' she says.
Meanwhile, she's on the front lines of defining what it means to run a million-dollar, one-person business, a phenomenon that it likely to evolve considerably as artificial intelligence (AI) makes it easier than ever before for solopreneurs to get more done with fewer resources and to combine their own intelligence with that of machines. 'I want to be part of this age of AI,' she says.