Entrepreneurs

Who Will Create The Next Crop Of Million-Dollar, One-Person Businesses?

Most million-dollar one-person businesses don’t start out that way the first year. They begin like many solo operations, as an alternative to someone’s day job, then grow to six or seven-figure revenue over time. Often that’s a result of leveraging what one person can do, by bringing in contractors or vendors to help, outsourcing or using automation. 

They’re businesses like:

  • The Babysitting Company, where founder Rachel Charlupski matches babysitters around the country with clients needing childcare
  • Shedavi, where engineer Elizabeth Davis makes high-end shampoos and hair care products and sells them to a following she built on Instagram
  • Ocean Audit, where founder Steve Ferreira spots giant errors on the bills that shipping companies send to retailers and collects the overcharges on behalf of the stores, taking a 50% commission.

Census Bureau data offers an interesting window into the growth of such non-employer businesses–those with no employees but owners–that are getting to $1 million in revenue or have the potential to do so. The Census Bureau recently changed how it is reporting the data, and it offers more insight than we’ve ever had into how this trend is taking shape among all demographic group.

Consider this data from 2017, the most recent year for which the new information available: 

When it comes to breaking $1 million in revenue, there were:

·      40,000 businesses in total

·      5,100 woman-owned businesses

·      1,800 veteran-owned businesses 

·      1,100 Black- or African American-owned businesses

·      2,900 Asian-owned businesses

·      3,000 Hispanic-owned businesses

·      30 Native Hawaiian or other Pacific Islander-owned businesses.

These owners are the elite athletes of the microbusiness world, punching well above their weight because of their intensive focus on doing things efficiently.

Where the data gets even more interesting is in the categories just before $1 million—businesses with high potential to get to seven-figure revenue with a little TLC. 

Among businesses with $499,999 in revenue to $999,999, there were:

·      265,000 firms in total

·      34,500 woman-owned firms

·      9,200 veteran owned-firms

·      17,500 Asian-owned firms

·      5,300 Black- or African-owned firms

·      20,000 Hispanic-owned firms

·      150 Native Hawaiian or other Pacific Islander-owned firms.

Dig a little deeper and you’ll get to the next high-potential category, businesses with $250,000 to $499,999. In that group,  you’ll find:

·      599,000 businesses in total

·      98,500 woman-owned firms

·      27,000 veteran-owned firms

·      30 Alaska Native- or American Indian-owned firms

·      45,500 Asian-owned firms

·      17,000 Black- or African American-owned firms

·      53,500 Hispanic-owned firms

·      4,500 Native Hawaiian or other Pacific Islander-owned firms.

And there are even more firms in the low six figures, in the category of $100,000 to $249,000. There are:

·      1.9 million businesses in total

·      404,000 woman-owned firms

·      97,000 veteran-owned firms

·      350 American Indian and Alaska Native-owned firms

·      156,000 Asian-owned firms

·      91,000 Black- or African American-owned firms

·      207,000 Hispanic-owned firms

·      1,900 Native Hawaiian or other Pacific Islander-owned firms.

With new business creation happening at a record pace since the pandemic, we’re likely to see even more businesses in these categories in years to come. What’s particularly exciting to see is that the trend of creating six figure and seven figure nonemployer businesses is showing up in all demographic groups, contributing to wealth building across communities.

Perhaps we will someday see an organized effort to identify these high-potential businesses across the country and provide them with technical support and access to capital, so they can make it into the next highest revenue category and beyond.

While not all owners of nonemployer businesses want to hire employees or have the capabilities to do so, many do have the potential to grow their businesses in ways that are very beneficial to the creation of good jobs in their communities. 

Seeing how many owners are already replacing six-figure jobs in their businesses and heading toward very substantial six- and seven-revenues is the first step toward unlocking this option for more people. We’re just seeing the beginning of this trend, and it’s a very empowering one for anyone who wants to control when and where they work.

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