Editor’s note: Longtime Comstock’s contributor Michael Scott returns this month with a reprise of his business book review series, which had its last installment in 2017. Have a book recommendation for Michael? Let us know at comstocksmag.com/contact.
In the Capital Region, microbusinesses are a critical cog in the economic landscape. Along with their impact on the area, they bring an infusion of creativity, flexibility and entrepreneurial freedom for those seeking to pursue their own path.
This business narrative and movement is the theme of a 2022 book entitled “Tiny Business, Big Money: Strategies for Creating a High Revenue Microbusiness.” Throughout its pages, author and small business expert Elaine Pofeldt serves up a solid helping of advice on how to start and operate a microbusiness, which she defines as a business concern of 20 people or less.
A sequel to “Million-Dollar, One-Person Businesses: Make Great Money, Work The Way You Like, Have The Life You Want,” Pofeldt’s latest book spotlights a fascinating survey she conducted on the founders of 50 seven-figure microbusinesses that reached this milestone without W-2 employees or a large team. Through this research, she offers the reader deep reservoirs of insights on how these businesses were able to cultivate uncommon levels of profitability and lifestyle success.
Harkening back to her time as a journalist, including a stint as senior editor at Fortune Small Business Magazine, Pofeldt says she began noticing that nearly all of the media coverage on small business centered on startups and their efforts to rise to unicorn levels. She found that there was very little in the way of coverage on solo businesses, which many budding entrepreneurs were seeking to run.
This prompted her to begin scouring the landscape for examples of firms that were successfully able to scale and reach new heights of sales and profitability. “In researching the book, I looked at businesses that were 20 employees or less, but typically 5 employees or less. Many of them didn’t have employees, rather they had a recurring team of contractors,” Pofeldt says.
Armed with these findings, Pofeldt burrowed down a rabbit hole seeking answers to such questions, such as: How do entrepreneurial-minded individuals make more money without growing the size of their businesses? What key systems and mindsets does one need to leverage in order to maximize their time and productivity?
The COVID-19 pandemic, says Pofeldt, led millions of people to take the leap in becoming their own boss. She cites statistics from the U.S. Census Bureau which show that applications to launch new businesses hit 5.4 million in 2021, a new record which upended the 2020 record of 4.4 million. Much of this, she says, was driven by individuals seeking lifestyle businesses that would replace the income associated with their corporate jobs without the associated stress. She found that these newly minted business owners didn’t necessarily want to scale, preferring to keep their businesses small.
Microbusinesses owned by a single person now encompass a wide swath of home-based concerns, freelancers, and independent contractors. Prior to their emergence, there was very little attention directed toward the full impact of the microbusiness sector. “I believe that, as more people become aware of the income potential in this tiny business space, we’re going to see even great numbers of people jumping onboard,” Pofeldt remarks.
Microbusiness owners often have a small team of people, whether W-2 or independent contractors, that function similarly to a full-fledged traditional workforce. These business owners, while still possessing a great deal of freedom and flexibility, must lead a team or collective, even if it’s two or three people. This represents a change in dynamics from the traditional solopreneur experience, where an owner often functions as a lone ranger.
One of the highlights of Pofeldt’s book “Tiny Business, Big Money” is her exploration of the type of mindsets budding microbusiness owners need in order to succeed. She also found that many of the businesses she profiled deployed a suite of automation tools and apps to boost their productivity and efficiency to avoid getting lost in the minutia of the business.
Another interesting finding noted in the book is that microbusiness owners exercise a lot as a part of their self-care regimen. Pofeldt herself engages in martial arts and long restorative walks as a part of her own microbusiness routine.
“I found it very interesting that 80 percent of them exercise,” she says of the microbusiness owners she surveyed. “Being in a small business is akin to functioning as a food truck, namely, if your truck is out of commission in the shop, it’s not selling burritos. Similarly, as a microbusiness owner, if you let yourself get run down or flame out, you’re going to get sick. And so, most place wellness as a priority, which I believe is a good thing.”
Pofeldt is also a proponent of setting income goals that really matter to the business owner, as a way of assessing progress and milestones. “Obviously there are some inherent risks that come with running a tiny business, like not being able to create enough revenue pipelines to pay your bills and have a reasonable lifestyle,” she notes. “It may require building yourself some runway by, say, setting up a side hustle so that you can stay on top of those bills.”
Those currently pondering the launch of a microbusiness will find immense value in the advice in “Tiny Business, Big Money” for it offers readers a roadmap toward their next entrepreneurial venture. And for those currently engaged in one, it may be the perfect accelerant from going from tiny to massive business returns.
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