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The Rise Of The Million Dollar, One-Person Business

forbes.com

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Re: The Rise Of The Million Dollar, One-Person Business

#71

Post by kpommerenke »

tunesmith wrote: post #45
peterjancelis wrote: post #41

Earlier quoted context omitted.

Why not simply keep doing what you are doing and buy dividend stocks with your savings? There is no rule that you have to start your own business to become a business owner...

Yeah, that's in the mix - it just feels like a mental leap, as for years my only savings have been in retirement funds, where I've focused on mutual funds. Plus I have a bit of a problem with the market just because it seems like however deep you get into the abyss of researching stocks, behaviors, fundamentals, etc - there will always be the finance firms who will have access to better information. On top of that, t…

The 8% real return is the arithmetic average over the last 80+ years. It's somewhat useful for predicting the expected return over a one-year period. However, what you need for retirement planning and what the IRR formula gives you is the geometric average, which takes into account compounding. The historical real return was only about 6% measured as a geometric average, and there are some reasons to think that it will be lower in the future.

Re: The Rise Of The Million Dollar, One-Person Business

#72

Post by hkarthik »

larrys wrote: post #28
joonix wrote: post #26

Earlier quoted context omitted.

You aren't going to pull down 7 figures on a one-man AC repair business. In that type of business, you are just renting out your time, and nobody is paying $1,000/hr for an AC repairman's time. You can scale it, definitely, and have an army of repairmen working under you and then make tons of money, but then you're no longer talking about a one-man business.

I don't think grandparent comment was meant to imply 1 person business. (You are correct in your math assumptions). I just think they mean "small business funded organically or built from the ground up". Besides "1 person" can also mean "1 person and subcontractors" so where do you draw the line at "1 person" anyway? The only thing I would add though is that many of these businesses were not started by the person run…

Correct, I didn't mean to imply these were 1 person businesses with a single A/C repair person doing all the work.

To reach $1 mil or more in revenue, these businesses use 1099 contractors or corp-to-corp sub-contracts to meet their labor demands.

Re: The Rise Of The Million Dollar, One-Person Business

#73

Post by derivagral »

tunesmith wrote: post #45
peterjancelis wrote: post #41

Earlier quoted context omitted.

Why not simply keep doing what you are doing and buy dividend stocks with your savings? There is no rule that you have to start your own business to become a business owner...

Yeah, that's in the mix - it just feels like a mental leap, as for years my only savings have been in retirement funds, where I've focused on mutual funds. Plus I have a bit of a problem with the market just because it seems like however deep you get into the abyss of researching stocks, behaviors, fundamentals, etc - there will always be the finance firms who will have access to better information. On top of that, t…

When you say better information, what do you mean? The actual basic fundamentals of each company are publicly available and required to be accurate. There's a lot in the interpretation, but at least on that front your actual information is on a reasonably level playing field.

I agree that getting into technical / behavior based trading is a much bigger hurdle due to all the specialized data and algorithms that go into it.

Re: The Rise Of The Million Dollar, One-Person Business

#74

Post by cfontes »

reeses wrote: post #49
tunesmith wrote: post #33

I think about this a lot - I made the jump from salaried worker to self-employed programmer/freelancer/contractor/consultant (depending on how you look at it). But I'm doing enterprise-level architectural programming. It's not very amenable to productizing, so I'm basically stuck being paid for my time. What that means is that if I want to have a long-term high-security relationship with a couple of key clients, I ba…

First of all, f### "first-world problems" when it comes to something like this. It's personal and it's your life. You only get to perceive one run at this one. I posted a few things in Patrick's thread that I won't repeat here[1] regarding the move from a simple hourly rate to the ~$1m+ range. The thing I would work on in your case are your basic assumptions. I would try to get past the "long-term high-security relat…

Really nice post indeed, I am myself looking forward to try this approach in a few months when I get back to Brazil.

Re: The Rise Of The Million Dollar, One-Person Business

#75

Post by jwhite »

mililani wrote: post #59
mercutio2 wrote: post #56

Earlier quoted context omitted.

Since we're using accounting terms-of-art, you almost certainly don't mean that you would "net 500k", you mean gross 500k, right? The popular culture seems to use net to mean "total in the income category", but in accounting it generally means EBITDA, i.e. your dad would gross $1m and net $100k.

Oops, yes, my bad. I meant gross. Geez, even I can't get the terms straight.

I think we can excuse you, given that the boat was _literally_ netting quite a lot of money... in the form of fish :-)

Re: The Rise Of The Million Dollar, One-Person Business

#76

Post by beat »

jsiarto wrote: post #61
mhartl wrote: post #47

It's nice to see coverage of an exciting trend (of which I'm happy to be a part), but it always cracks me up when financial publications classify companies based on sales rather than profits. Defining a "million dollar company" as a company with a million dollars in annual sales is absurd.

This. If your company clears one million in yearly sales and spends $980,000 to make that happen--you are running a $20,000 per year company. There is nothing wrong with this, but I hate when these metrics get thrown around without context. There are $1M companies that make less profit than a hot dog cart (which subsequently, in the right location is a damn good business).

On the other hand, low-margin businesses are often low-risk, stable businesses. A grocery store has crappy margins, but excellent stability.

Re: The Rise Of The Million Dollar, One-Person Business

#77

Post by Axsuul »

jsiarto wrote: post #61
mhartl wrote: post #47

It's nice to see coverage of an exciting trend (of which I'm happy to be a part), but it always cracks me up when financial publications classify companies based on sales rather than profits. Defining a "million dollar company" as a company with a million dollars in annual sales is absurd.

This. If your company clears one million in yearly sales and spends $980,000 to make that happen--you are running a $20,000 per year company. There is nothing wrong with this, but I hate when these metrics get thrown around without context. There are $1M companies that make less profit than a hot dog cart (which subsequently, in the right location is a damn good business).

This is unlikely which is why $!M companies are significant because most likely their margins aren't that low.
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