Elaine Pofeldt is a freelance writer, editor, and ghost writer who has recently worked with publications including The Economist, Fortune, Money, Inc., CNBC, Crain’s New York Business, Forbes, and many others. Entrepreneurship, small business, and careers are her specialties. She is also the author of a new book, which we’re going to talk about today, The Million-Dollar One-Person Business.
She helps corporate, non-profit, and private clients write and edit proposals, newsletters, blogs, RFPs, reports, white papers, academic articles, and books. Elaine also helps her online editorial clients create inviting high-traffic websites, drawing on her experience on excuse me, Fsb.com to five million page views a month and the number two site in Google after the USSBA. She founded and ran a national businessman competition for fortune, small business and now advises clients on creating and improving contest on their own. She experienced appearing as a guest on TV outlets such as MSNBC and CNN.
You can connect with Elaine and learn more about her and her awesome book here:
- The Million-Dollar One-Person Business
- Elaine Pofeldt on LinkedIn
- Elaine Pofeldt on Twitter
- Elaine Pofeldt’s column on Forbes
Meet Elaine Pofeldt
Phil Singleton: Hi Elaine and welcome to the show.
Elaine Pofeldt: Thank you so much Phil great to be here.
Phil Singleton: Alright this is going to be really exciting because as we were talking in th green room so to speak, before we started recording, Elaine wrote one of my favorite books of last year, probably going to be of all time called The Million-Dollar One-Person Business. So as I was explaining to her when we first connected this morning, I think it’s one of the most awesome book titles that I’ve ever heard of and it’s one that’s inspired me I think the first time in my life to buy a book within seconds of actually hearing the title.
So I can’t wait to actually dig into this because as an agency owner and somebody who aspires for this kind of business model I really thought this was exciting and I love the content of the book. But before we actually dive into that I would just like to hear Elaine about your background and those first steps out of school or what have you that got you into the business role.
Elaine Pofeldt: Oh, sure Phil. Well I came into the business world by accident. I started out as a general assignment reporter after I graduated from college. I was an English major and I worked in Jersey City in Patterson, New Jersey for small newspapers covering police stories, city hall that type of thing. Then after about seven years of that I started to feel a little burned out by all the bad news. So I wanted to do something light and fun and I got a job as a fashion features editor at Women’s Wear Daily.
It couldn’t be much more different than my beat of covering the Hudson County Jail. But it was fun and it introduced me to the business world. I found that I really liked learning about the business side of the fashion businesses even more than covering a runway show. So I wound up going in that direction and I had the opportunity to go to Success Magazine which covers entrepreneurship and then I went from there to fortune small business online which is what you were referring to FSB.com and then I went over to fortune small business magazine for a while. Then they brought me back to the website to help build the traffic some more.
Elaine Pofeldt: Then 11 years ago I went freelance, so now I’ve written for a variety of business publications all in that area of entrepreneurship and careers.
Phil Singleton: Excellent. Thank you for giving us that background and it sounds like at one point whatever that was 11 or 12 years ago you went into the business side of covering stories and content and have never gone back.
Elaine Pofeldt: Oh, absolutely. Well the coverage at fortune small business was very much focused on the business side and even some of the stuff I did at Women’s Wear Daily was and Success Magazine of course was also I formed my own business 11 years ago. So I now have the understanding of what it takes to stay in business for a pretty long time and you manage cash flow and all the nitty gritty aspects of running a business that you learn on the job when you start your own business.
Phil Singleton: The one thing I’m going to ask, I want to dig into the book here really in a couple minutes. But since we already started talking about this a little bit you’ve been writing, you’ve been a journalist you’ve been a writer for some time. The Internet’s changed a lot. I’m assuming some of the things when you first got into the writing world so to speak maybe a little bit more emphasis on print publications and then maybe that shifted some. Can you talk a little bit about how that changed for you personally in the way you write and where it gets published and distributed.
Elaine Pofeldt: Oh, its changed completely Phil. You’re completely right about that. The whole journalism industry has been disrupted. It’s had good and bad changes I would say. I came up in a system that was print oriented and there was a level of rigor to journalism that I think a lot of younger journalists had not experienced. I’ll give you an example. If I wrote a story for fortune small business there might be a line editor that would edit it. A top editor of the magazine and three copy editors before it ever went out to the public and so you have a lot of great training that came with the job. Now what’s happened a lot is papers are basically gone. A lot of stuff has shifted online. But with that shift it doesn’t seem like the industry has been able to really find a good profit model. So where I think a lot of publications have gone is to go ultra lean in terms of staffing.
Elaine Pofeldt: So there are times when I’m publishing things where maybe there’s an editor somewhere in the organization who’s looking at it just to make sure there’s nothing glaring, but I don’t have any contact with that editor on a daily basis. So it’s very much you’re sort of out there winging it and you do your best. Luckily I do have very good training and I know how to do things. But that’s what’s evolved so you have to bring that quality control to your own business and do the fact checking even if they don’t ask you to do it and that sort of thing. Sometimes I have sources who laugh and say I’m the only person who ever contacts them with fact checks and I think that’s probably because there are not that many internships anymore. There are very few staff jobs anymore and there are few opportunities for young journalists who are entering the field now to really learn how to do things in that way. Fortunately there are still a lot of very experienced people doing it so they bring that training to the work.
Elaine Pofeldt: In terms of where I get published it’s definitely much more online these days. In the last year or two you’re on the cutting edge Phil of a big trend which is podcasting which has been a wonderful trend because it’s brought a lot of news waste to the whole discussion of whatever topic it is, in this case entrepreneurship. I find that a lot of the hosts of business podcasts are business people like yourself and they ask very, very smart questions. So I really enjoyed seeing that. Now on one hand maybe if a radio veteran listens to them there might be some things that they look at that they would do differently because they have a certain training. Similar to how I feel with written journalism. But from my point of view as somebody who is part of this whole dialect I’m so excited to see all of these new voices and some of them maybe would have not had the inroad to the media. It’s very much a who you know business that goes way back to your early career and it can be hard to break into. So it’s nice that people can just break in if they have something to say and they can build an audience, I love it.
Phil Singleton: Totally fascinating and as you’re talking I want to get right to the book as soon as we can but I have another question I just have to ask you because of your background and how you’ve seen this shift online and the way that you’re explaining how things have changed being published today. It also makes me think of somebody who for myself often times we’re trying to do for our clients is almost treat their websites as a marketing and a publishing platform. So some of the things that I’m doing writing my own books now, I’m publishing. I’ve got a podcast for many of the reasons you explained.
Phil Singleton: But I actually started to produce our own local magazine. So but one of the things I’ve noticed as looking at content as a publishing platform is how tricky it is for some of these online media sites or online publications where you’ve got this gray area. I don’t know what you want to call it. I’d love to hear your take on this where and I’ve seen this, I’ve been reading about it a little bit more as I get into this publishing model about native content. You had the print model before. There was so much checking, so many tiers as you were mentioning before and it was physically separate. But you know now when we publish things online you’re part of a whole system of things. There’s online ads, there’s people commenting. There’s things being advertised within editorial content. There’s people trying to get an SEO or a Google advantage and get links and stuff. So it’s so much more complex just I think in the way things are presented and distributed in the type of technology that’s embedded in new content, versus the simple way of there was literally a physical firewall on content.
Elaine Pofeldt: Oh, yeah.
Phil Singleton: In a newspaper or magazine. So can you comment on that kind of stuff because this is where it really fascinates me the things I’ve never really thought about before because I’m coming at this as an SEO person and here now I’m trying to play with my own almost media publishing platform. I’m seeing this myself and it’s really making me think, wow I can see how people struggle a little bit with the advertising model because it does get a little bit tricky.
Elaine Pofeldt: Oh, it does. Well when I see the publications doing is they’ll clearly label it. I’m talking about bigger publications they label it when it’s advertising. I write some content and what I notice is they label it. It’ll say this is our custom content and a lot of them have gotten very sophisticated about it so they won’t just publish anything like the old editorials of the past. Just aren’t done where it was a pay to play kind of thing. It’s very much when I do it I have a lot of discretion as to who to interview. There are people in the stories that did not pay anybody at the magazine. The publication for an ad that they don’t discuss that with me if an ad was purchased or not. They want me to go ahead and do the best possible story because what the advertisers are realizing is no one wants to read some hokey ad you know? They will read a good article that’s topical and related to what the advertiser is in the middle of doing. So maybe somebody might buy an ad. There still are some print publications.
Elaine Pofeldt: The way I see this done is they’ll buy a full page ad somewhere in the publication and then that supports a section on a certain topic, let’s say it was accounting and then as the writer I’ll be asked to submit story ideas about accounting, similar to being a journalist. It’s almost exactly the same. Then go out and report it. It supports the section itself but there’s nobody leaning on and you saying you have to say this.
Phil Singleton: I mean that’s great to know at least from the bigger and more popular ones and of course they’ve got the reputations and things. But you do see I mean gosh some of these ones that offer a sponsor are clearly marked. I think some of these smart advertisers that are doing it, they’re not producing the good ones anyway. Aren’t producing advert tutorial type content. It’s actually they’re getting it…if the sponsor post even it’s not written by a journalist. It’s provided and information provided by a company. It’s almost like the really good ones are truly trying to provide really good educational content that has value versus something that’s so promotional.
Elaine Pofeldt: Yeah you’re right.
Phil Singleton: Some of those look like they’re so good and then sometimes they’re so good it’s almost like wow is this editorial content or did somebody pay for that? So I pay attention to it a lot more. It’s great to get your insight.
Elaine Pofeldt: Well it’s interesting that you raise that as far as the commentary and that sort of thing. What I found is for awhile a lot of publications were so happy to get the content that they had pretty relaxed standards and then what happened I guess it was the beginning of 2018 when the Huffington Post kicked all the contributors off the site. It seemed like that touched off a wave of scrutiny where I saw a lot of the publications were cracking down on ad content basically. It wasn’t necessarily to “advertisingy” it was more just boring.
Phil Singleton: Lower quality stuff.
Elaine Pofeldt: Yeah, not true thought leadership and they really raised the bar in terms of thought leadership and I do some editorial work for people who have been trying to get published and they don’t understand why the publication won’t take it. Now I was a senior editor so I worked with some of the toughest editors in business trials so I know why the editors are taking something or not taking it. I can give them some guidance. Now some people don’t want to take that guidance. They just want to say whatever they think is interesting without regard to that feedback. But a lot of people say oh, you know what I just don’t know this field so thank you so much for that feedback and they will adapt their content to make it readable. That’s why it’s so similar to what you see on the journalism side because it has to be. They don’t want to junk up their sites with poor content.
Elaine Pofeldt: Now with smaller publications sometimes they have less sophistication. Not always there are some excellent very small publications. But. We see that very, very blurry line it’s usually going to be the smaller ones that maybe don’t have an experienced staff or don’t have the budget to bring that rigor to the whole process, similar to on the editorial side.
Phil Singleton: Interesting. That does sound like you mentioned, I mean the Huffington Post thing it seems like a lot of these larger online media sites really did look at their contributor platform and like you say some of them shut things down completely and redid them. Looked at them with new eyes and then changed and it sounds like it went through almost like a quality upevil and kind of got focus back on the basics and now we’re all getting a lot better quality from the sites. There was great stuff on Huffington Post that got passed around and I’m sure there were probably some diamonds in the rough that came from little known people that once in awhile got something that went viral. But it got really spammy. So I’m being more harsh. You’re being nice about it, but some of these things really got spammy. A few of them got called out probably from people trying to abuse it from a Google standpoint and it just gets stuff in there for either exposure or traffic or back links and then that got really cleaned up which was good because on some of these sites I think it was really starting to become a problem and people are putting content up for the wrong reasons and it dilutes everything.
Elaine Pofeldt: Well you’re a professional too in the field so I can look at things too and I can see when something is put up for that reason. It junks up the whole site. In terms of protecting their brand I think a lot of the publication said we really don’t have enough of a team to police this to the level we need to so it’s easier just to get everybody off the platform and only have paid contributors. It kind of went full circle in a way.
Phil Singleton: Right I’m so happy it did because it got a little crazy for a few years there and it really cleaned up. Thank you for your perspective on that I really want to get to the content and the topic that really excited to reach out and so happy to have you on to discuss it today which is your book. I thought, the first thing I said like I mentioned at the top and then earlier is the title is just so awesome. Probably personally the best book title I’ve ever seen from a business standpoint because it probably just spoke to me and how I’ve always wanted to run my business, what I’ve aspired to. One of the other things I just personally see in terms of technology and maybe some of the agency and digital type businesses that are run because a lot of things we’ve seen I want to give you a little bit of a preface about why I think your book is important to me and how it resonated with me and kind of dig into some of the things that you wrote about and why you wrote about them.
Revenues, Employee Counts & Venture Capital Do Not Equal Success
Phil Singleton: But, one of the things I see personally is all of us that are in business these days are trying to figure out ways to elevate our authority and trust and expertise and get that out there. One of the things a lot of businesses do especially startups but agencies and other digital types of companies as well is trying to put stats out there which are a lot of times they are related to things that I think don’t necessarily relate to true business success. So, let me give you an example of that. You hear a lot of times people here in my town other places that explain to you they’re being really successful because the number of people they’re hiring. Or because they’re revenue is X amount. But at the end of the day it really relates to the way businesses today are and how profitable are you or how much of that revenue are you bringing in that actually you get to take home.
Elaine Pofeldt: Exactly, yeah.
Phil Singleton: Right? A person or agency that makes a million or two million dollars a year but the owner’s only bringing down 100,000 dollars net is a lot different than a mutual person that we know Chris Parker he’s got a whole website business where he brings in around a million dollars a year and it’s just him and his wife. So obviously his take home is huge. Big difference in lifestyle and these kind of things and I think your book speaks a lot to that kind of a new lean business that’s highly mobile and allows you to live a lifestyle and go out while still bringing in large revenues and being able to take home a lot of it. To me that’s what really excites me about business in general ’cause I know there’s a lot of agencies out there that’ll say oh, we do three million dollars in sales but we’ve got 100 employees. Well, you’re struggling. I know I’ve seen this happen all the time in my town and other ones where you start building up the beast, the number sounds really good but then it gets really tough and it gets to be a lot of heartaches in there sometimes.
The average small business in the United States their leading income is less than 50,000 dollars.
Elaine Pofeldt: Well I’m glad you brought that up. I’m sorry.
Phil Singleton: Sorry?
Elaine Pofeldt: That’s such an important topic and I’m really glad you brought that up because with the title sometimes people say why did you focus on revenue and the reason I did was because when you look at the average small business in the United States their leading income is less than 50,000 dollars. So they don’t even have the revenue to be making much of a profit or to live on honestly depending on where you live in the country. I mean there are lower cost places where 50,000 dollars goes a lot longer way than it would say in Manhattan, New York. But I want to get people thinking more about moving the needle on the revenue but you also do have to move it profitably and that can take some figuring out. That’s why there’s so many case studies in the book because there’s not really a cookie cutter as you know because you run a business and I know the same thing. You have to experiment. What worked one year doesn’t work quite as well the next year because something changes with technology in your field or whatever it may be. Something comes more labor intensive, less labor intensive. So it’s a constantly changing thing.
Elaine Pofeldt: But what you take home is important as far as profits too. There’s a point where you get to where the business can be so profitable that you could be paying out so much in taxes that it’s hard to regress. So sometimes what business owners do is make a decision to actually try to lower the profits a little bit so they’re not paying so much in taxes by reinvesting the business or maybe they have a spouse who is helping out with the bookkeeping but they’re not paying that person so they might hire the spouse and then put the money that the spouse earns into a solo 401k or something like that. Rather an IRA I should say. So sometimes you have to look at those types of things too because it’s complicated the whole thing with profit. What people have on paper isn’t necessarily what they’re really capable of bringing home in the business. They may be in a high tax state and make certain decisions that would actually depress the profits because they almost have to as a matter of survival.
Phil Singleton: Excellent. Let’s take a couple of steps back though in terms of what motivated you to write on this topic? I mean obviously you come from business we talked about your journey as a journalist. But this particular topic I mean how did it, why is it exciting to you? Why is it important and how did it come about?
Elaine Pofeldt: I write a blog for Forbes and I was down to my last couple of days of the month, I write five posts a month and I ran out of ideas so I started Googling for inspiration and I came across some statistics from the U.S. Census Bureau for the non employer business. Now that’s a wonky term for businesses that have no W-2 employees. So the owners might work there but no one else. So it could be one person, generally it is one person. Sometimes it might be a couple of spouses. Friends, that sort of business. Anyway I noticed that the numbers of those that were bringing in between one and 2.49 million were going up and they rose 35 percent as of between 2011 and 2016. That was the most recent year we had the census data for and I thought that was pretty interesting. I got very curious about what they were doing and I started looking at the census data and I was able to see which industries they were in.
Elaine Pofeldt: So I published a post about this and then people said well we need to know a little more about this. I need to start a million dollar one person business. Are they doing E-commerce what are they selling and I couldn’t find this out from the census bureau because they won’t give you that type of personal information about the people who fill out the form. So I wrote to the readers and I said if you’re one of these businesses please write to me and tell me what you’re doing because people are curious. So they wrote and I wrote this post about five of them and went very viral. It was I think 340,000 page views now.
Although their numbers are going up (one-person business millionaires) they’re still a needle in a haystack.
Phil Singleton: Nice.
Elaine Pofeldt: It touched off a whole series of profiles as I found out about these folks. Although their numbers are going up they’re still a needle in a haystack. There’s about 36,000 of them in the whole country out of maybe 25 million non employer businesses. So these are the Olympic athletes-
Phil Singleton: Unicorns, yeah.
Elaine Pofeldt: Yeah. So there are people who just don’t want people to know what revenue they get. They don’t want to go public with that for privacy reasons. All various concerns they might have. So you can’t always get them to do an interview. But the ones that would do an interview I profiled and then over time an agent noticed these and said this would be a great book and it was kind of in the back of my mind that in these posts it was hard to bring them altogether and because I was the only person writing these types of profiles I had some observations about what they had in common that I could share at a high level and go a little deeper into the profiles than you would with a blog post. So that was how the book came about and it came out last January.
Phil Singleton: It’s so awesome too. I remember when I got it, got on Amazon came the next day or whatever it is. I basically tore through it. I started actually reading it again around just slower this time. I didn’t bring it to the recording studio here. It’s sitting on my nightstand still. I’m halfway through it, the slow read. I know we talked about some of the people that you profiled and at least in general. I know there’s towards the beginning I think there’s a couple but there’s at least one E-commerce one in there for sure. You explained some of the backgrounds on some of them an overview. I obviously want get people to… I think everybody should buy the book and read it especially if you’re… I think this is the dream of a lot of people these days is to have something, a lean company that can run from home, home part time and be able to do things to where you can have the freedom to have a lifestyle and actually be able to experience life to the extent that you can.
Phil Singleton: I know that all the people in the book are like that, it’s like a child and they’re doing it 24/7 and even if they are or claim they have a lifestyle they are probably working a lot harder sometimes on the book than they are playing. But I still like our audience to hear a little bit more about the diversity or the types of businesses that were in there.
Types Of One-Person Millionaire Business Owners
Elaine Pofeldt: Oh sure Phil. Well there are six main categories I focused on and just for a little background there are some categories where people tend to go over five million. But I did not focus on those because they’re still niche and require very specific talents and skills. One of them is finance, so they’re hedge fund managers. I didn’t do that because how many people can become a hedge fund manager. That’s very sophisticated skill. Then there are people like actors, actresses people with very unique talents. I guess we could all go to acting school but we might not make five million dollars a year as an actor. So I eliminated those and I focused on the ones that I felt were most relevant to the general worker out there. So the categories were E-commerce and I’ll give you some specific people after I run through this quick list.
Elaine Pofeldt: Manufacturing which sounds really odd for a one person business but it’s actually growing. Informational content creation, so that would be things like people who have webinars. It could be people have a teachable course any kind of informational product. There’s professional services so this could be attorneys, accountants, engineers, architects who can command high prices basically for what they do, they’re that good. Personal services firms, so this could be people like fitness coaches, nutritionists. Often these types of folks will have contractors working under them. They have a methodology that they teach and then they train other people to use it. I had one person who was an eyebrow stylist who trained other eyebrow stylists to use his method in the book. So it could be something like that.
Cory Binsfield – Real Estate
Elaine Pofeldt: Then there’s real estate. There is one entrepreneur I profiled Cory Binsfield who started out buying a single duplex. He was a financial planner but he was just getting his business off the ground. Reinvested the money from that duplex, the rent money into the next property and now 20 years later he’s got 116 properties, or he did as of the time in the book. He’s probably up to like 120 by now is my guess and may throw off one million dollars in revenue. That’s something that’s accessible to all. So I’ll give you a few examples.
Camille and Ben Arneberg – eCommerce
Elaine Pofeldt: In terms of eCommerce there are Camille and Ben Arneberg they started a business called Willow & Everett it’s an Amazon store and they sell housewares and they’re a young couple. They had recently gotten married. He was in the military and she worked in corporate social sustainability but she felt like she was not really a corporate person even though she cared about social sustainability. So they wanted to create a business they could do together. What they did first was they’re both very athletic. She’s also a personal trainer. They said let’s do something related to our shared interest in running. So they started selling running compression sleeves and they decided after a short time it wasn’t really selling what they’re inventory was. So they decided to change gears, they thought about their other interests and they like to entertain people and buy cool coffee mugs and wine decanters and that sort of thing.
So they ordered I think it was like six or seven products from a private label manufacturer in India and put them up on Amazon. They had about a 5,000 dollar budget and they had saved while they were working and they rationalized that a college course would cost that much. So they were going to view this almost as a college course, even if they lost every single dollar they would have learned something, they were committed to being entrepreneurs and once they put them up there they did a horse race. Some of them didn’t sell as well as others so they discounted the ones that did not sell and reinvested that money into the inventory that was selling and ordered more. That was how they built that business. Now they’ve expanded to several other businesses. They’re selling baby products on one site and pet products on another one. They just sold a business. They kick started that business with another couple.
EThey sold maps for people who use standup desks so they don’t get blood clots by failing to shift and that one was just acquired by somebody Richard Jailichandra who was the Chairman of Click Bank, a giant marketplace for informational products. He’s trying to acquire about 100 million dollar one person businesses actually. So they were acquired by him. So that’s one example.
Megan Telpner – Professional / Personal Services
Another example is Megan Telpner she’s a nutritionist. She was working in advertising in her 20s went on a trip to Africa, got very sick. She was diagnosed with Crones Disease and she didn’t like the treatments that were being given to people with Crones disease and she wanted to heal herself with health and wellness and nutrition. She went back to school, became a nutritionist and stopped working in advertising altogether and she started blogging about her views on nutrition which had a very strong point of view that not everybody cared about the role of nutrition and healing and over four years she was on a panel like this. She blogged every single day and built up a following, very gradually through hard work. These are not overnight success stories.
They started selling a product called the three day green smoothie fast and this was 11 years ago so it was a pdf file basically. She sold it to her email list but her email list was not an email list in a CRM system it was just the people in her email. So this 10 dollar product she saw people bought it so she sold it to some more people. This led to other products like courses, eventually and then she started something called the academy of culinary nutrition where she trains people in her entire system of cooking. Along the way she wrote two cookbooks for Random House called the undiet, easy ways to cook nutritious foods. So that was how she built her business. Now she’s also gotten into coaching other people in their businesses, people like nutritionists who are trying to build their business. So she’s an example of professional service, personal services. But it’s a hybrid because she’s selling informational products.
Rebecca Krones & Luis Zevallos – Manufacturing
Elaine Pofeldt: We say informational products people think it’s going to be a webinar that then tries to sell you some other thing and what I found with the ones that have sustainable business it’s a real value in terms of what they sell. She has a big following among nutritionists and they really trust her as far as what she’s teaching about nutrition. So I think that’s really important is a real value there. Then another example would be Rebecca Krones and her husband Luis Zevallos, they are in food manufacturing. They sell honey online and they’re doing what a lot of people are doing with manufacturing which is using a co packer. They had the good fortune in that her father is a beekeeper and he sells the bees to commercial farms but he wasn’t doing anything with the honey and she did some research and she found that a lot of people were worried about the origins of their honey at one point there was a scare that adult aerated honey was on the market. It has bad things in it and so she knew where the honey came from and so they put up a site for tropical trader factory foods and they didn’t want the responsibility of bottling up the honey and putting the labels on.
Elaine Pofeldt: So they hired a firm called a co packer that does all of that so that it can be sold commercially. There was another woman I came across after I wrote the book who her product is called Booby Bars it’s a nutrition bar for new moms to keep up their energy level and produce milk for their babies. She was a neonatal intensive care nurse. No business experience whatsoever. She was a mother of three, she was running this volunteer group helping the moms and she started baking these bars for the women and they were so popular that the women started offering to pay her because she was making them in such a large volume. You know how people always say you should turn that into a business. This is really one place where she did and she went to a co packer because as you scale up you really can’t make the stuff in your kitchen because of food safety rules.
Elaine Pofeldt: She was able to get the product into Walmart. (Laughs).
Phil Singleton: There it is, there’s your big break.
Elaine Pofeldt: And she told yeah, you’re a marketer and branding guy. She was worried about the name that Walmart would find it too direct but she said they didn’t even bat an eye. They were fine with it and she went on Shark Tank and she’s done really great with the business. So there are a lot of ways you can do these things.
The Millionaire Next Door
Phil Singleton: Yeah so fascinating the diversity and like you say that’s my favorite thing about the book is it’s in some ways one of my very favorite books but before yours is on the list now too is The Millionaire Next Door.
Elaine Pofeldt: I love that book.
Phil Singleton: You know about how the things that you perceive them to be aren’t and how people live high consumption of lifestyles. Some of that I felt some of that, I don’t know if you intended it, but I feel like when I read some of the stories and the way people are they’re hardworking people that are just trying to go after passions and then they’ve got experience and all this kind of thing for people trust them and they’re just working hard. They’re probably also a lot of them are probably just inherently smart people and maybe low consumption I’m guessing. But it felt like that kind of similar type of small business where you had that blue collar work ethic in terms of them really putting the time and effort behind it and then just turning it into something real. Was the feeling that I took away from some of it. I don’t know that that was necessarily your intention but it really struck me there and I thought that was really interesting.
Elaine Pofeldt: That’s interesting that you took that away. I agree with you about that. I think these folks are very hardworking. They’re self motivated. You have to be to run a successful one person business ’cause there’s not a boss there cracking the whistle. Every once and awhile someone will post something like what do I do about motivation. And if you really are not motivated it’s very hard to run a one person business. You can get external motivation by getting a coach or a system of accountability around you, similar to people with exercise right? You have people that are just at the gym at five in the morning no matter what it could be a blizzard. Then you have other people have a personal trainer. They both maybe equally as fit, but these folks have put their motivated themselves or they’ve put the systems in place with a coach or someone like that to keep them on track. It’s not always easy to run a business. These are not get rich quick type of people.
Phil Singleton: Right.
Elaine Pofeldt: I’m not interested in telling those stories because they are not sustainable and I’m more interested in people creating lasting value. Giving something back to the community. It doesn’t mean they have to be almost a nonprofit. But giving something to their customers that makes their customer’s lives better I think is really important ’cause we’re at a point in business where it’s easy not to go in that direction. We see a lot of bad examples of business. So I don’t want to tell those stories. I want to tell the ones of the people that are doing things right and that are working hard.
Phil Singleton: You have to have two pieces of it too. You can’t work hard on something, make a successful profitable business and still on your lifestyle and be making bad decision where you’re maybe squandering the fortune that you’re making. Even to some extent I mean just running my own business there’s some people that take chances with some of the reinvestment money that they make and you got to basically be doing all that stuff which to me then feeds into that work ethic. These people really must be able to not only work hard and be pretty smart in terms of how they’re making money but also kind of how they’re saving and reinvesting in their business. You almost have to have all of those pieces. I think, I’m guessing I don’t have research on it.
Elaine Pofeldt: You do. There is a certain amount of R & D that they do. Some of them like Alan Walton in the book who runs a spy camera store online called SpyGuy uses profit for his accounting and I noticed that a number of them do that where you put your profit away first and you set aside a certain amount of money to do the reinvestment because that’s one difference between these businesses and the sort of scrambling freelancer is that there is a strategy behind it. The owner does step back a little bit and think about okay what is the purpose of this business. Is the business helping me in my life’s biggest goals? Do I have time for my family? I started this business so I have time. Do I actually have it? They set back a little bit and think about the purpose of why they’re doing it all and they do realize the importance of keeping it fresh and sustainable. So you have to do R & D. Even I do R & D in my writing and contact business because there’s new stuff coming out all the time. You can’t know if things are going to work until you try them.
Elaine Pofeldt: Sometimes it costs you money.
Phil Singleton: Right, right.
Elaine Pofeldt: That’s another thing I have to point out which is sometimes folks are thinking about leaving their job to start a business and they can maybe do it without risking any money. These folks have really taken the risk out of things to some extent because they’ll start the business on the side and they do small experiments to test what worked.
Phil Singleton: Was that pretty common that they had the foot kind of in the other boat a little bit and grew it enough to step away?
Elaine Pofeldt: It’s pretty common. Not in all cases. A lot depends on the stage of life. As people who have kids and dependents and things like that often have to start it on the side because it’s very hard to save up enough money to create the perfect circumstances to start a business. The average American has trouble saving 400 dollars, right? So when you think about six months of living expenses, six months of business expenses all the conventional advice which is correct, I mean who can do it. So the way around that is you start it on the side and as it builds up revenue you finally can jump from the job and go into it full time. But you do have to be willing to risk some money because there is some risk to running a business and if you want zero risk at all in your professional life and financial life this is not for you.
Common Success Trait: Ambitious, Self-Educated Risk Takers
Elaine Pofeldt: It’s for people who are willing to take very smart calculated bets on themselves. Ben and Camille they were committed to learning what it took to being entrepreneurs. They knew they wanted to be entrepreneurs. So even if these products didn’t sell they were willing to bet that 5,000 dollars. Now a lot of people don’t have 5,000 dollars but over time you could save up or you could have fewer products if you wanted to be in E-commerce. But there’s going to be certain elements of people might not buy it. That’s the thing you have to be mentally prepared for. It can be stressful for people who are used to going to their job and then in two weeks they get a paycheck whether or not their efforts were successful they would get paid. If they’re really unsuccessful for awhile they might get fired. But basically the money is guaranteed, it’s not in a business.
Elaine Pofeldt: But these are folks who thrive on that and they understand it. But I wouldn’t say they’re extreme risk takers. They’re not like Elon Musk. They’re kind of mildly risk takers and that’s why I thought their stories were so appealing cause there are a lot of people in corporate jobs who are just starting businesses who have that same profile who don’t necessarily don’t want to be the highest rollers in town. But they are willing to take a little gamble on their good idea and on the chance to have the better lifestyle and maybe they’ll decide how much they’re willing to risk. Similar to like if you want to Las Vegas you decide alright that’s it. I’m going to bet this much and that’s it. They kind of take that attitude and then they can go into it with the spirit of fun. But they do put things in place so that they don’t have to end it prematurely.
Elaine Pofeldt: Sometimes it might be that they have a spouse or life partner who has an income coming in or I’ve seen cases where people downsize their lifestyle. I’ve seen this with older entrepreneurs. Sometimes they own a home and now their kids are out of the house and they want to start a business and they might sell the house and move into a rental. Then they have money to invest in a business. I didn’t focus in this business in this book too much on things like franchises. But there actually was one franchise case study in there too so that’s an option too. In that case it was a uni-shipper’s franchise.
Phil Singleton: Yeah sometimes that’s even a bigger up front gamble because it’s a bigger investment.
Elaine Pofeldt: But you can do it. You can get to one million and what he did was he used an outsource back office service so he didn’t have to have all the employees that you would normally have in a franchise and then he eventually liked the back office service so much he acquired it. So there are ways even with that you can learn from these entrepreneurs about how to keep things very lean. But going back to your point about the Millionaire Next Door these are not wasters of money. They’re not people who have to drive a Maserati. I’m not saying anything against someone who wants a Maserati if you like sports cars, but they’re not living for other people. They’re living for who they are and what they want and sometimes they do go on nice trips or I haven’t been to many of their homes so maybe they have really big homes. I don’t know, but the impression I have gotten from them is that their lifestyle focus and they want to build a sustainable lifestyle.
Phil Singleton: Fascinating. I want to wrap this up with just, I should know this but I don’t, first book that I read from you. Was this your first book or?
Elaine Pofeldt: This is my first book under my own name. I’m a ghost writer so I’ve written a handful of books for other people but this is the only one I can really mention here.
Phil Singleton: So just out of curiosity any things that you’ve learned? I’ve written a couple you went through a traditional publisher which is great. We did ours through several different partnerships that I had co-authors and what not. Direct publishing, but I’m just curious. Seems like every time I’ve gone through a book writing process I learn something new. Is there some things that you’ve learned that you would have done differently just in the process? I’m just kind of curious just as somebody myself might write another book again and I know every time I’ve gone through one I was like wow that was a good idea I wish I would have done that a little differently. Just curious if you had anything that you learned from it that you might do differently in the next book?
Elaine Pofeldt: You know there’s always something that you learn you’re so right about that Phil. One thing I found was very valuable was I had events around the book where I would bring together the entrepreneurs from the book and do panel discussions. Sometimes I would get invited to do key notes and I did do some. But I really I liked the more collective approach. So folks would come and get to meet the people from the book and that was extremely popular. Sometimes we’d have two or three hundred people at the events.
Phil Singleton: Wow, that’s great.
Elaine Pofeldt: I think there was something really nice about it not being filtered completely through me. So people could see that these are real people just like themselves and hear it in their voice and there would always be somebody…if you’re a person in the audience maybe you would relate to one person in particular a little more because of the same industry. They’re your same age or your both women or whatever you have in common with them. That was really something that I enjoyed and I thought was very positive for the book and I would definitely do again. I didn’t know to do that when I did the ghost written books with the ghost writing clients but it’s something that I’m now suggesting to others that they do that if they have a case study driven book.
Phil Singleton: Right.
Elaine Pofeldt: The real people plus you can do it regionally. So I did it in San Francisco, Toronto, Chicago, well I didn’t have a panel in New Orleans but I did go. I did it in Austin, Texas. I’m in the New York area do I did it there and I wound up keeping in touch with a lot of people I met at the events. Thinking of something like that that you could do that really brings it to life and makes it about not just you but the subjects of the book. To me that was my biggest takeaway. That that was very, very helpful and I would also record these things in Facebook lives so it enabled me to bring that message to people around the world who would never be able to come to an event in New York. If they were India or somewhere like that necessarily. But they could at least learn the message of the book and there’s always more to say on the topic. So I was never worried that once people were exposed to it then they’d never read the book. It’s a topic that’s evolving by the minute. Like we didn’t even know people could do this a few years ago.
Phil Singleton: Right.
Elaine Pofeldt: So you learn a whole lot in the next few years.
Phil Singleton: It’s interesting ’cause I think at the beginning of the book or somewhere towards the beginning its like there’s only a matter of time before there’s the billion dollar one person company.
Elaine Pofeldt: Yeah that’s evaluation. Yeah it was funny that was a VC and I was talking with someone else about this yesterday, who knows? I mean I don’t know where it could go, but I’m hearing about bigger and bigger revenue businesses. We’ll see what the profits are as you pointed out in the beginning. But just the fact that they can raise the revenue so much without a big team. They often have a team of contractors and that sort of thing. But that’s to me that’s very freeing for people ’cause there’s a lot of people that don’t like managing people. They just, they’re fine with managing-
Phil Singleton: Well this gets so much easier now to build a system and then specifically hire people out as a gig or a contractor as part of your system for something specific. So you build this machine up and it’s like yeah I can totally see it. As long as it doesn’t strip all the profit away from it and you find a way to add a lot of value and then be able to decide and stop somebody from building something really big and scalable.
Elaine Pofeldt: Oh, no and these folks are very good at hiring contractors. One of the things I learned from Sol Orwell who’s one of the entrepreneurs, he pays a lot for his web designer. I don’t remember if he was on or off the record what he pays her so I don’t want to say it but it was what you would consider pretty high fee. But he found that really good people can get done in one hour what it’s going to take a mediocre person six or seven hours to do. Excuse me, and so that’s one rule of thumb that I’ve used in my business. I try to find the best professionals I can even if their hourly rate is high because these folks are so busy they don’t want to pad the bill anyway. They’ll bill you for one hour and in that hour all the knowledge that they bring is so valuable that it’s not worth trying to find somebody who’s charging the rock bottom price who’s not going to be as good generally.
Connect with Elaine Pofedlt (and Please Buy Her Book)
Phil Singleton: Great, great, great advice because I think we’ve all learned the hard way. Shopping around ends up wasting a lot of time and gives you a heartache. If you just find the experts and then pay them a fair rate you’re likely to get the best return on that. Let’s since we’re coming to the end of this time wise, I’d love to tell our audience one where we can buy your book and two, where the best place is to follow you online for your content.
Elaine Pofeldt: Sure, well the book is available on Amazon, Barnes & Noble, all major book stores. So I hope you do enjoy it and they can reach me at TheMillionDollarOnePersonBusiness.com It’s the title .com. No numbers, all spelled out in words or they can write to me on LinkedIn or Twitter under my full name. I’m sure it’s in the show notes so I won’t spell it out it’s a mouthful. But I do invite people to write to me, I really love hearing from other people in ultra lean businesses and I do write back and I love hearing about what your questions are because it helps me as I’m writing to become a better journalist and think about what were the unanswered questions I didn’t address so I can address them the next time.
Phil Singleton: So great Elaine thank you so much for spending the time. It was absolutely fascinating. Thanks for writing such a great book and then for agreeing to reach out on LinkedIn come to our show and share such great insight and some of your background with us. Personally I thought this was one of my favorite ones so I really appreciate it.
Elaine Pofeldt: Awe, thank you so much this was great. You ask really awesome questions. It was really a pleasure.
Phil Singleton: Alright. We’ll see you soon.
Elaine Pofeldt: Thank you.