How to Grow Your Solo Business Without Hiring Employees

By Elaine Pofeldt on 12 October 2017 0 comments

The conventional wisdom is that to "scale" a business, you have to do it the traditional way — by hiring employees. Otherwise, the thinking goes, you'll be limited to whatever revenue you can generate personally.

That presents a conundrum. What if you really don't want to hire employees because you're not the managerial type — or can't pull it off financially? Creating jobs does a lot of good for society, but it is a big responsibility. For very small businesses that have uneven cash flow, it can be unmanageable. You can't just opt out of cutting paychecks one month if a big client pays you late. Employees depend on getting paid on time.

Fortunately, there's another option. In the digital age, it's increasingly possible to grow revenue in a one-person business or partnership without hiring traditional W-2 employees. In researching my upcoming book, The Million-Dollar, One-Person Business, I came across many people who were approaching or breaking $1 million in revenue without adding employees. They are among the 35,584 owners of "nonemployer" businesses that the U.S. Census Bureau found were hitting or breaking $1 million in revenue in 2014. (Nonemployer businesses are those staffed only by the owners.)

So what are they doing? It runs the gamut. Entrepreneurs are breaking $1 million while running internet retail sites, professional services firms, real estate investment firms, healthy cooking online courses, and many other businesses. It's not necessarily the type of businesses they run, but the way they run them that has enabled them to scale. Here are three growth strategies they are using that anyone in a one-person business can start using today to greatly increase revenue.

Outsource

In many small businesses, your time is your currency. If you waste it on nonproductive activities that don't add to the bottom line, you'll never maximize your revenue. The conventional wisdom is you need to hire staff so you can offload tasks that can be delegated, but many of the million-dollar entrepreneurs I interviewed used another approach. They outsourced whatever they could to make their business more efficient.

One example was Camille and Ben Arneberg. They started Willow & Everett, a store with its own website and a presence on Amazon, in 2015. Neither was a retail veteran. Camille had worked in the corporate sustainability field, while Ben had been in the military. But they loved home entertaining and had a knack for selecting products other people like, such as decorative tea kettles.

The couple started small, investing $5,000 in inventory, and reinvested in new products as they went along. By April 2016, they had grown the business to $1 million in revenue, one year and four days after their launch.

One secret to their rapid growth was hiring the right kind of service to help them. After trying to pack a bunch of early orders themselves and finding their home buried in boxes of mugs, they switched to using a fulfillment service offered by Amazon. Although there is a small cost for this, the service handles tasks like labeling and fulfillment, freeing the Arnebergs to focus on growing their business.

Contract it out

One of the myths about running a one-person business is that it's an isolated affair. In reality, many smart solopreneurs rely on a team of trusted contractors to expand their capabilities. One entrepreneur I interviewed, Dan Mezheritsky, founder and president of Fitness on the Go in Vancouver, follows this model. As a former junior national champion decathlete in Canada, Mezheritsky founded his one-person, in-home personal training franchise in 2005 and grew his own annual revenue to $1.5 million in 2016. He did it by building a network of 180 personal trainers, who are all contractors.

Mezheritsky got burned out on the idea of bringing on traditional employees after finding out that many of his original hires were not motivated to help him grow the business. Because they were paid on salary, they didn't share in the financial gains the business made in a tangible way. When he switched to hiring them as contractors, that changed. Now that they had their own businesses, they saw a direct financial benefit if he brought on new customers — whom they would get to serve.

Mezheritsky provides help to the trainers that makes it more advantageous for them to work for him than on their own entirely. He licenses the right to use the company's brand name to the trainers and provides support with business management, leads, continuing education and other areas of the business for $400 a month. The company sets prices for the training sessions and the trainers keep about 91 percent. "It was a no brainer for the trainers, when they took a look at what they were receiving," Mezheritsky told me. "It was simpler than trying to do everything on their own."

Automate

Like many of the million-dollar entrepreneurs I interviewed, Mezheritsky is passionate about finding ways to automate repetitive tasks in his business. For instance, he hired a pro to help him build customized software that handles billing for all of his trainers, acts as a customer relationship management platform, handles his client rewards program, and more.

But you don't have to build your own software in most one-person businesses. For instance, you can save several hours a week on scheduling tasks by using inexpensive tools like ScheduleOnce or Calendly — scheduling programs that let you send business contacts a link to your public calendar so they can book a time to meet with you without emailing back and forth.

My new favorite app is Everlance, which tracks your mileage automatically from a smartphone. That way, you don't have to keep a written journal in your car.

Incorporate a couple of other time savers like that and you can easily free up a day every week to recharge and figure out new ways to grow your business — while enjoying the pleasures of running an ultra-lean operation.

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