Growing up in California, Jay Regan, 35, developed a lifelong love of diving and surfing. In 2017, he tapped into his passion for the ocean by starting a one-man ecommerce business called GILI Sports in Las Vegas, named for the GILI Islands, an archipelago between Bali and Lombok, Indonesia. GILI Sports sells inflatable, stand-up paddleboards that it manufactures.
The company hit about $ 1.5 million in annual revenue for 2019. Regan donates a portion of the profits from each of the boards, which go for $ 475 to $ 850 each, to charities that support oceans, reefs and endangered sea creatures. Regan has no W2 employees, relying on contractors and outsourced services, including his factories, for help. He has never yearned to return to his past life as an employee at companies involved in ecommerce and botanicals.
“I liked working for people, but I didn’t like the corporate environment and being chained to a desk,” says Regan, a digital nomad who was running GILI Sports remotely from Bali when we chatted earlier this year. “I never made more than $ 42,000 a year in a job, and whenever I wanted a raise, it was always a struggle. I decided it was too limiting and that I had more potential.”
Regan is part of a trend that has accelerated rapidly the past few years: the growth of million-dollar, one-person businesses and partnerships.
The number of nonemployer firms—those with no employees except the owners— that hit $ 1-$ 2.49 million in revenue in 2018 rose to 41,666 in 2018, according to just-released Census data, up from 39,494 in 2017 and up from 26,744 in 2011—a nearly 48% increase.
There was also significant growth in the number of firms that hit six figures and beyond in 2018.
· 297,498firms brought in $ 500,000 to $ 999,999, up from 282,819 in 2017.
· 668,152 firms reached $ 250,000 to $ 499,999, up from 629,837 in 2017.
· 2,067,67 hit $ 100,000 to $ 249,999, up from 1,974,934 in 2017.
What kinds of businesses do the entrepreneurs in these high-revenue, ultra-lean businesses operate? They run the gamut, from home-based professional services firms to solo manufacturers who outsource almost all of their operations.
Certainly, no one what the future holds for these solo businesses in the current economy. Some have been hit hard by the pandemic, and many have experienced barriers to getting federal aid for coronavirus relief., which has flowed much more freely to larger firms.
And even in the best of times, million-dollar one-person businesses are the equivalent of the Olympic athletes of the microbusiness world. There were 1,292,866,710 nonemployer firms in the country in 2018. Their average annual revenue was $ 48,814.
That said, I believe the latest round of Census data holds a powerful message of hope for anyone who runs a one-person business or needs to start one now to replace a lost job.
When I researched my book, The Million-Dollar, One-Person Business, many of the solo businesses and partnerships that hit $ 1 million in annual revenue got their start in during Great Recession or just after it. When traditional jobs become scarce, more people tend to flock to self-employment. Some of these founders ultimately discover they are very good at running a business and stick with it as a long-term career choice. Although today’s environment is different from the one in the last recession, the fact that we have discovered so many new, virtual ways of working bodes well for many solopreneurs.
So which industries held the most opportunities for solo entrepreneurs and partnerships? Here are the top 5 categories in which businesses hit $ 1 million to $ 2.49 million in annual revenue in 2018. They are organized by NAICS codes, as the Census groups them. Some fields, such as retail, were hit hard by the pandemic-related lockdown, so their outlook could change.
Professional, scientific and technical services: 10,561 businesses at $ 1 million to $ 2.49 million, up from 9,745 in 2017.
Construction: 4,905 businesses at $ 1 million to $ 2.49 million, up from 4,669 in 2017
Finance: 3,330 businesses at $ 1 million to $ 2.49 million, up from 2,781 in 2017
Real estate + rental and leasing: 3,180 businesses at $ 1 million to $ 2.49 million, up from 3,050 in 2017
Retail (including ecommerce): 3,069 businesses at $ 1 million to $ 2.49 million, up from 2,976
What makes million-dollar, one-person businesses different?
Million-dollar, one-person business owners tend to be smart optimizers of the resources they bring to the table, finding creative ways to accomplish more than one person usually can on a shoestring budget. That often means using a combination of hiring contractors, outsourcing and automating some of the work of the business. Many are lifelong learners, constantly reading and participating in groups that allow them to soak up knowledge from their peers.
Regan, who studied economics with a concentration in entrepreneurship at California Polytechnic State University, is a good example. He learned the ropes of running a business when he founded an earlier supplements company, which sold products such as a candida cleanse, from his parents’ garage. He invested $ 5,000 he saved from his jobs to start that business.
After Regan sold that company in 2017, he set aside about $ 80,000 in startup cash for paddleboard business, including $ 55,000 in inventory and $ 3,500 for shipping. He found a product designer on Upwork to design the paddleboards, paying him just under $ 2,000 for a complete board design, which took about six weeks. He also traveled to China to find a factory. All in all, it was a big investment, but he was committed to making it work. “I said, ‘If it takes me 20 years to create a successful business, I’ll do it,” says Regan.
Once he had his inventory, Regan launched the products on Amazon, investing $ 16,000-$ 17,000 on ads on the platform the first year. He also opened his own online store.
In keeping with what he learned in the first business, Regan made every dollar count. “Even today, I tell my manufacturers to cram these boards in the smallest box possible,” he says. “It all comes out of the bottom line. I’ve seen other people spending money they don’t need to spend.”
To spread the word about his paddle boards, he sent them to Instagram influencers to test and negotiated affiliate marketing relationships with some of them. When consumers tried the boards, they left so many positive reviews on Google that Regan sold out of the boards at one point and had to wait another three months for more supply.
As he built the company, he relied on help from about 15 contractors and outsourced services that tackle work like fulfillment, customer service and graphic design. He also relied on many tech tools to work efficiently. Among his favorites: Mailshake, a “cold outreach” platform that helps with drafting marketing emails, and ShipStation, which helps with shipping related tasks, like setting up FedEx labels.
Reading and networking have helped Regan learn as he’s gone along. He is part of a small, private mastermind for e-commerce entrepreneurs. Another key influence, as he has grown the business, is MJ DeMarco’s book The Millionaire Fastlane. “It taught me personal responsibility, complete ownership of where you’re at,” he says.
Early in his career as an entrepreneur, Regan became part of a private forum that DeMarco runs and flew to an annual meetup the group held in Scottsdale, Arizona. It was hard for Regan at the time to afford the $ 250 ticket and $ 2,000 in hotel and travel costs, but he took a leap of faith.
“I didn’t have much money at the time,” Regan says. “I had a couple of thousand dollars in my bank account. I didn’t know if I could afford it.”
That event changed his life. “Six years ago, I met people who I’m still good friends with, really successful entrepreneurs,” he says. “It went from ‘I didn’t have any community’ to ‘I was surrounded by people who do this all day.’”
Constantly learning from other e-commerce entrepreneurs helped Regan to take his business to the next level. He hit $ 207,000 in revenue his first year and $ 1.5 million the first year and a half.
It’s taken hard work and long hours, he says. “A lot of people don’t see what it took behind the scenes,” says Regan. “When I’m living in exotic locations, everyone wants to see me having fun. No one wants to see me behind a computer monitor.”
But he’s willing to make that commitment in order to build a business that helps his customers enjoy pursuits like paddleboard yoga and allows him to give to causes that support his passion for the environment. “I have a long-term outlook,” says Regan.