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How a one-person business can break $1 million in sales

Joey Healy is one of an elite group of entrepreneurs who have "scaled up" a business to $1 million in revenue or more without hiring full-time, permanent employees.
Source: Joey Healy
Joey Healy is one of an elite group of entrepreneurs who have "scaled up" a business to $1 million in revenue or more without hiring full-time, permanent employees.

At age 27, Joey Healy generates more than $1 million a year in revenue through his New York City eyebrow-styling business—The Joey Healy Eyebrow Studio—as well as a related business that manufactures and sells products such as brow makeup.

Working with clients ranging from actress Kyra Sedgwick to major fashion magazines, Healy says he didn't build the one-man business overnight. In 2009 he began traveling on foot to the apartments of clients living in wealthy Manhattan ZIP codes to style their brows. "I would book my day from 9 a.m. to 9 p.m. on Park Avenue," he recalls.

As demand grew, he opened a private eyebrow studio and began charging $115 for a brow styling and soon after negotiated a profit-sharing arrangement with Completely Bare, a spa with four locations in New York, and trained stylists there to use his methodology.

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Healy is one of an elite group of entrepreneurs who are finding that it's possible to "scale up" a business to $1 million in revenue or more without hiring full-time, permanent employees. The U.S. Census Bureau found that there were 28,835 "nonemployer" businesses—those where the owners and partners were the only employees—that broke $1 million in sales or receipts in 2011, the most recent year for which data is available.

While these folks work in a variety of industries—from glamorous fields like Healy's to more utilitarian ones, like shipping—they often share certain business practices. Whether you are thinking of starting a one-person business in 2014 or want to grow an existing one, their strategies are worth emulating if you want to get to $1 million in sales and beyond. Here are some of their best practices.

"There were 28,835 'nonemployer' businesses ... that broke $1 million in sales or receipts in 2011, the most recent year for which data is available." -U.S. Census Bureau

Keep office space simple

Many new small-business owners make the mistake of investing too much money in fancy digs early on, leaving them with little money left over to invest in growth. Owners of successful one-person million-dollar businesses tend to avoid this mistake. Healy, whose appointment schedule is booked five weeks ahead of time, realized quickly that he didn't need to run a fancy street-level salon—since he never takes walk-in customers. Instead, he runs his eyebrow studio in midtown Manhattan from the seventh floor of an office building. He hired an interior designer to make the space welcoming. "It's modest, but it's well-branded and private," he says.

Some solopreneurs operate their million-dollar businesses from home to keep overhead down. Debra M. Cohen, president of Home Remedies of NY and founder of the Homeowner Referral Network, a business that helps consumers find reputable home-improvement contractors, has operated from an office in her starter home in Hewlett, N.Y., since 1997. "I have everything I could possibly need right here," Cohen said. The referral service is free to homeowners, but HRN charges contractors a commission on jobs secured and completed. Since she conducts business by the phone and Internet, there's no need to invest in another office, she said.

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Outsource and tap the expertise of others

These scrappy entrepreneurs realize they can't work on the business if they're always working in it. Instead of staffing up with full-time employees—which can be costly—they rely more on contingent help. Cohen, for instance, relies on contractors such as a virtual assistant, a webmaster and an IT pro to keep her business running smoothly. "That's probably my biggest cost saver," she says. Her accountant, attorney and insurance agent provide other expertise she needs.

Christopher Cadigan, owner of Unishippers of Nassau County South, based in Rockville Center, N.Y., took a similar approach to running his operations at the shipping franchise, which he purchased in 2009 after serving as country global account manager at DHL Express. One secret to hitting the million-dollar revenue mark by 2010 was outsourcing his customer service, billing and collections to a "virtual management firm" in Melbourne, Fla., so he could focus on growing the business.

"The phones and emails are answered exactly the way if these people were sitting there next to me," Cadigan said. He was so happy with the arrangement that he eventually bought into the virtual management firm, now known as Right Growth Management, which today helps other Unishippers franchisees manage their businesses. Meanwhile, his franchise, which expects more than $5 million in sales for 2013, grew to the point that he has since hired three salespeople.

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Form joint ventures and partnerships to expand

Just because these entrepreneurs prefer to run their businesses as solo operations, they don't always go it alone when it comes to growing their firms. In fact, many have found that teaming up with other businesses and organizations is one of the best ways to prosper.

Ask Robert Smith, who runs the public relations firm Robert Smith & Associates in Loves Park, Ill., and expects $1.4 million in 2014. He is constantly on the lookout for opportunities to partner with other organizations and businesses. For instance, early in running his business, he made arrangements with a county that handed out a packet of useful information to owners of businesses who'd filed paperwork such as a "Doing Business As" registration to provide tips on public relations—attributed to his firm. "It came with an implied endorsement," he said. In another such venture, he set up a kiosk at a local printer's business. Typically, he'll pay a commission to other businesses that refer new clients.

He's not alone in taking this approach. HRN's Cohen has found her webmaster so valuable in expanding her reach that when she sells a new business opportunity, she pays the webmaster a percentage of the business. If Cohen refers work to the webmaster from her own client base, she in turn receives a commission from the webmaster.

Cohen also wins customers due to an active network of Realtors, decorators and owners of home-improvement businesses who refer customers to her. "If that turns into a job, I give them a percentage of my commission as a referral commission," she said.

Elaine Pofeldt, Special to CNBC.com

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