Imagine running a business that would allow you to travel the world and still bring in more than $1 million in annual revenue. That’s what Anton Kraly, 32, pulled off.
After graduating from college in 2006, Kraly spent $25,000 to buy a delivery route to sell cookies in Merrick, N.Y., a Long Island community.
“I would basically drive on the Brooklyn Queens Expressway into Brooklyn every morning, load up this truck I bought, and go to big grocery stores and sell these products,” says Kraly.
But when Tim Ferriss’s book The Four Hour Workweek came out in 2007, Kraly rethought his business model, looking for an easier way to make a living. Investing $29 a month in an ecommerce hosting package, he put up an online store and started selling his cookies online. The new business quickly became more profitable than his delivery route. He and a business partner ran it while traveling in Thailand and Vietnam.
Eventually, it dawned on them that they could grow their business even more by selling bigger ticket items than cookies. They soon began selling furniture and home goods imported from China. He and a business partner were the only employees of the company and relied on contractors when they needed help. Within three years, the business hit $1.2 million in revenue. They sold it in year four, in 2011, when it hit $1.8 million in revenue.
Kraly is part of a fast-growing trend, in which more Americans are creating million-dollar businesses before they have hired a single employee.
The number of nonemployer establishments with revenue over $1 million grew by 5.7 percent to 38,029 in 2015, the Census Bureau found. That is up from 33,624 in 2014. “Nonemployer” firms is what the government calls businesses whose owners are the only employees. Most are run by one self-employed individual. Some are even breaking $2.5 million or more. I’ll get into the type of businesses they are running later in this post.
An elite few, like Kraly, have figured out how to create more than one million-dollar, nonemployer business. “It’s a lot easier to get to seven figures than ever before,” Kraly says.
It was while participating in online forums about ecommerce businesses that Kraly came up with his second million-dollar business idea. He noticed that many people were responding to his posts and then private messaging him for advice. Often, he was asked for the same advice repeatedly. “There’s a pattern people go through when trying to create an ecommerce store,” says Kraly.
Kraly repurposed his online posts to create the content for Drop Ship Lifestyle, a website he and a partner turned into a new business in 2012. The site sells online courses for internet merchants and holds live events for them. The business hit $1 million in revenue by year three, he says.
Last year, he says, the business brought in $3.5 million in revenue. Drop Ship Lifestyle is no longer a nonemployer business. Last summer, when the business moved to Austin, Texas, Kraly converted two former contractors from Asia to employees. It has since scaled up to 11 employees. Now Kraly is looking into opportunities in software.
“There were fewer people creating it 10 years ago, but now it costs 1/1,000 of what it would have cost then,” says Kraly.
So how can you find your own idea for a high-revenue business you can run by yourself or with a partner? Here are some ideas of what the highest-revenue nonemployer businesses in America were doing, based on the Census’s newly released 2015 data.
(For information on businesses in the $1-2.49 million range, see my earlier posts “More Americans Are Creating Million-Dollar, One-Person Businesses” and “How To Find Your Million-Dollar, One-Person Business Idea.” If you would like a pdf with the exact data I pulled from the Census database, email me through the Forbes site, and I’ll be happy to send it to you.)
$2.5 million to $5 million in revenue
There were over 2,000 businesses in this category. Here is what they were doing. The number of businesses listed fpr each category corresponds to those with $2.5-$5 million in revenue in 2015. There are some categories where the Census Bureau does not reveal the number of businesses, to protect the identity of the owners, so it is not possible to get an exact count.
Construction. 115 businesses. Most were involved in non-residential building construction.
Wholesale trade. 332 businesses. Some of the major categories were wholesalers who serve retail merchants, wholesalers of perishable products, such as food, and motor vehicle and motor vehicle parts wholesalers.
Retail trade. 571 businesses. Auto dealers and parts dealers made up a big part of this category.
Information. 51 businesses. The Census Bureau did not disclose what they do.
Finance and insurance. 286 businesses. These are all involved in securities and commodities. Someone who runs an independent hedge fund would fall into this category.
Real estate and rental and leasing. The number of businesses was undisclosed.
Transportation and warehousing. 7 businesses. They are all involved in air transportation.
Professional, scientific and technical consulting services. 465 businesses. Many are involved in management, scientific and technical consulting services.
Arts, entertainment and recreation. 227 businesses. They are mostly involved in performing arts, spectator sports and related industries or independent writers, performers and artists. Some are involved in gambling.
Direct selling establishments. 93 businesses.
Transportation and warehousing. 7 businesses.
Other services. 85 businesses. All are in personal or laundry services.
$5 million or more in revenue:
There were only 355 businesses in this elite category.
Finance and insurance: 278 businesses. Most of them are involved in securities, commodities and other investment activities.
Professional, scientific and technical services. 3 businesses. The Census Bureau did not provide more data than this.
Arts, entertainment and recreation: 68 businesses. Most of them are independent artists, writers and performers, or in the performing arts, spectator sports and related industries. This category also included 17 businesses involved in gambling.
Retail trade: 6 businesses. The Census Bureau provided no data on what they sell.
If you have never run a business before, it’s worth nothing that $1 million in revenue is different from $1 million in take-home pay. These businesses pay taxes and have overhead. In a business that brings in $1 million in revenue, for instance, the owner could very likely be in the highest tax bracket and is likely to take home an income in the mid-six figures.
Then again, that’s nothing to sneeze at. And if like Kraly, you’d love to have the freedom to live the lifestyle you want, without answering to a boss, a million-dollar, nonemployer business may be just the ticket to do that.
Elaine Pofeldt is the author of The Million-Dollar, One Person Business. She is a freelance writer specializing in entrepreneurship and careers.