Elaine Pofeldt, Writer, Editor and Online Editorial Consultant

Scaling Up Services - Elaine Pofeldt

Elaine Pofeldt, Writer, Editor and Online Editorial Consultant

Elaine Pofeldt is an independent journalist who specializes in small business, entrepreneurship and careers. She is the author of The Million-Dollar, One-Person Business, a look at how entrepreneurs are hitting seven-figure revenue in businesses where they are the only employees (Random House, Jan. 2, 2018). Her work has appeared in FORTUNE, Money, CNBC, Inc., Forbes, Crain’s New York Business and many other business publications and she is a contributor to the Economist Intelligence Unit. She is also a ghostwriter.

As a senior editor at FORTUNE Small Business, where she worked for eight years, Elaine was twice nominated for the National Magazine Award for her features and ran the magazine’s annual business plan completion. Elaine graduated from Yale University with a BA in English. She lives in in New Jersey with her husband and their four children and in her free time enjoys taekwondo, yoga and running.



[00:00:01] You're listening to scaling of services where we speak with entrepreneurs authors business experts and thought leaders to give you the knowledge and insights you need to scale your service based business faster and easier.

[00:00:15] And now here is your host Business Coach Bruce Axelle.

[00:00:22] Welcome everyone. This is the scaling up services podcast on her cellphone on your host. And today we're speaking with Paul from Elene is the author of the million dollar one person business.

[00:00:34] And I'm really excited to have Elaine on it. And I actually had to let people know I know only actually through a lot of the listeners here.

[00:00:42] I know the business community I know. CORNISH Elaine has worked with Vern actually a lot previously. So that's I'm actually not only an unhealthiness come to think some of her events are you know accelerator events and so on.

[00:00:56] I'm really thrilled to have you on the podcast and talk a little bit more about about your book and about the work that you've done reading covering entrepreneurs. So welcome to the program.

[00:01:05] Thank you so much Bruce. Great to be here.

[00:01:07] It's about time we started actually when we just start having you just give a little bit of your background and kind of lead us up to how how you've kind of stumbled upon the topic for the book kind of writing about what you've discovered.

[00:01:19] And then we can talk a little bit about how what you've learned applies to services business and people that are in services businesses looking to grow them.

[00:01:27] Sure. Well I'm a journalist who specializes in entrepreneurship and yours. I was senior editor at Fortune Small Business magazine for eight years. And I went freelance. About 10 years ago so I'm sort of an entrepreneur too and I pray for different publications that the topic of entrepreneurship ran for CNBC inc. money fortune and many others for the Economist Intelligence Unit and I stumbled across a topic for this book when writing my Forbes blog. Like a lot of writers I often wait until the last minute for inspiration. And it was the 30th of the month when they had one more blood 060 and I started googling around five is and came across U.S. Census Bureau statistics and now unemployed your businesses and those businesses that have no employees other than the owner they could be one person business they could be a partnership they could be a few partners basically no Choose. And what I noticed was was a growing number that were breaking 1 million especially in the one to two point forty nine million dollar category. And I thought wow that's interesting because I know a lot of one person businesses venture accelerator that aren't there at that million watermark.

[00:02:44] And I wonder what you think. So I sort of look at that any iciest codes that industry can raise. And there were certain number in retail number and manufacturing professional services et cetera so I wrote a blog post about that. People started writing to me and saying I need to start a million dollar person business. What are we doing exact that I want to just know about whether they're in reach like selling or they are online. So I wrote in another post I couldn't find out exactly who they were from the Census Bureau because they protect people's anonymity and I think we all at it that way we would let our personal sense is simply shared with the world leaders. And I said if you're one of the businesses people are curious please tell me what are you doing. We'd love to tell you your story so writing to me and about five stories and put them all in a blog post. And it went completely viral like nothing ever it has 300000 page views and I had my phone number teeb.

[00:03:44] It was almost like it was leaping off that ship with literally blowing up your phone.

[00:03:51] It was really wild but I think now people are really really interested in this and I think it's because it is start to make it into one person business. A lot of people there only commodity is they're buying really silly and professional services firms so they don't know how to grow revenue past a certain point and they'll often get to a decent level 250000 300000 but they can't really go beyond that and they don't have the cash flow to hire employees and pay for health insurance for them and that sort of thing. So that kind of stay in one place for years and years. I think that's why it touched a nerve and it led to sort of a mini franchise where every time these businesses I would profile them and I have to say that there are about 28 million small businesses in the U.S. These are not majority. Just under 36000 of them the number is up 33 percent 2011. But it's still a small number so it wasn't that easy to find them. When I was not concentrating anyone and there were six main categories but it was more a way of running business that enable them to scale their revenues.

[00:04:56] Yes and I think that's the sort of interesting for me as we kind of talk to services companies how they go about growing the business. You know I think that the time factor like how do you leverage and how do you track your time. Is one of the key surety concepts and how do you systematize how do you make a repeatable. How do you automate.

[00:05:15] Have you seen any patterns or looking at the companies that you've profiled the founders of Herreras like you've spoken to what do you notice in terms of similarities in terms of patterns. Are there other things that you see that they're all doing on some level that allows them to get to this level of revenue.

[00:05:32] Absolutely. They have a two part answer to that. First they are somewhat concentrated in industries where it's possible there are some industries where just be very very difficult then the main Caddick Kraisak where commerce professional services personal services like being a nutritionist informational marketing manufacturing and real estate. Those are all good areas for is amplifying what one person can do. There were there were many others who would have ran businesses and then there were also specialized ones like being a hedge fund manager or being a very successful actor or actress but those were not as accessible to the average person. So they didn't focus on notes but once in those categories what I found was that huge street banks which are not new at all but you would make a difference if you reach the knowing doing gap and actually deal with them which a lot of businesses do not do. One of them is on vacation and I had a panel at work Soho west on Wednesday and we had five of the entrepreneurs because one thing that really stood out with me was a real emphasis on process and thinking about single task that's done in business and what can be automated what's the best way to automate it. What is the best way to update how they're automating it so that they weren't really sending any of their time with real tasks. It's kind of obvious that I think a lot of people actually do that.

[00:06:58] You know we might automate one thing like our scheduling app but we're not looking at our business from a real system level where you might in a scaled up business that puts said this. The other thing is they document what they do. So when they have presses play something's cannot be done by a robot or an app. They have to be done by a person. They figure out the best way to do a blog post or update the web and say Were you a customer service call. They document it often in a video sometimes in writing so they can hand it off to someone and it's that every single relationship with the freelance the works that you have to replace certain freelancers they ultimately have it all set up so that they can hand things off they awesomely soor services so if they're an e-commerce search Fulfillment by Amazon if they're professional services firm they might outsource some of their back office like their invoicing or simply that they're not sitting there wasting time on it. The other thing I would say is because the two all these things step away from the pulpit and they take time to look at it from a higher level instead of just scrambling to meet one deadline at the next which is a real trap. I know my own one person is always a deadline. But they'll step back and say okay let me run strategy Fridays. And really that you know is it's going in the right direction.

[00:08:20] Do I have people on my virtual team and lot of that a real scalable entrepreneur. Think about what happens with a lot of them serve them decide I'm going to have a life so business I like so yeah I make a lot of money. I don't need any more money than at least it's a good business businesses where I'm struggling and scrambling I glow at a time in my whole life is out of kilter because I can't afford it. Then the other group has the option to scale and a lot of times they do. I found on the panel a few of them that were one person businesses now are in the process of hiring their first employee or had hired one or two since I met them and what I've done is they built a really nice falteringly in business that can support that so that the employee is that when they're foregoing their paycheck to have fully paid. Have a nice little machine they're going so that they can afford it and scale up in the way that Vern wrote about it in scaling up. It's a really good position and be you know a struggling business and trying to hire somebody and then all of sudden it's always a scramble Month month to make payroll. You just don't have the cash flow. You can't keep up. Very different mindset and a different quality of life for the entrepreneur.

[00:09:29] Yeah yeah and I think that's the other big idea or the concept that I saw and how to apply what these auctioneers are doing just kind of as a solo entrepreneur getting his million dollar mark you know as we look at companies that you know you may be several million dollars trying to get to 10 or 20 to 50 is really applying that same thinking which is rather than one hand if we want to be careful that we don't scale problems. So let's not take a process that doesn't work and figure out how to put a whole bunch of people into it and just exacerbate my you know my business challenges but actually was really hone the process. Figure out what is the value in it what is the best way to do it. How do we define it and improve it documented. Make it so highly repeatable.

[00:10:10] Before we start bringing in a lot of other resources other you know trying to try to increase the capacity or scalable capacity.

[00:10:18] And I think I think the interesting that I've seen around this is how to actually automate the the whole idea of the video and the documentation is fascinating because I think it's one thing that are sort of a nuance that I get from a lot of these folks is there's a difference between sitting down and thinking about how the process should work and sort of typing it out versus actually doing the process and then looking at what actually got done. Do you have. Do you have a sense of how how these folks generally approach to the sort of defining a process process inside their companies. Were there anything that you saw in terms of how they went about doing that that you thought was unique or different.

[00:11:00] Well usually they started out doing whatever process it was themselves by necessity because like a lot of Web businesses there was no one else to do it and then they would test out different methods they'd get the testers of different things like when I asked for recommendations for favorite apps you know for AB testing for instance there was a when I first started out I was using this onesided. I tried another one and that was even better and then I try to say and that's just how the mind seemed to work where they were always looking for a better way to do it they wouldn't lock in. They would sort of move along with technology and I had to see most of the techies at all but they just they were willing to try to do the set and set up a new Seram right now. It's one thing to say it it's another thing to do it because you get the little classes you go learn how to do certain things don't work great. You realize it didn't work great on this one computer you've got to switch your mac and not your PC. I mean there's a lot of decisions on a daily basis. Like I'm going to make the turn to do this because I need to see our family have been you know for X number of years and I've been in it.

[00:12:07] So they are committed to that. And I think that's very very important especially as we move into his age animation we probably be competitors are doing these weird things in this sort of commerce is they take an extra hour here in the air. There's no way you can maximize what you can do in a one person business. You have to know the good news is there's a lot of ways you can outsource that too. Like I said with my CRM there's this sort of little version that comes with lining up and then it's more of a higher touch version we could pay people to help you set up and that that's a good investment if you feel like you just have the patience to do certain things is just too crazy. Getting them all set up so you can do them really helps and I I know they tended to be more of a do it yourself and then ticket because they sort of like process. But if you're not I think it's definitely possible to still do what they did.

[00:13:03] I think I'd be curious if you know if you if you found in the people you've spoken to I think one of the things that I notice about people that have done this well is there's a little bit of this balance like they're interested in tech and they see tech as an advantage but they're not.

[00:13:18] They're not enamored by tatter they're not they don't love tech to the point where they're willing to just get into tech for. Can they just you know they love taking on things like they're very practical like they know like look I know I to see around. I know I need some kind of automation tool for e-mail like I need these things but they're very practical and very results driven and that they're willing to say if this doesn't really work quite right. I'm going to look at other options and see what's really best in the field I'm going to test them but I'm not going to get so enamored by the attack that I'm going to spend hours you know tinkering with it. It's a little bit of a balance because I certainly see a lot of tech folks that I've worked with and upsetting you know Schubel elaborate automation systems and in part I always call it résumé driven development. You know that they're just getting into the systems because they want to learn how to use them you know to put them on their resume not because they're really practical at the time. Did you notice that. Or does that come up for you and as you talk to these these folks working for most of them it was a means to an end.

[00:14:18] Yeah that sometimes you sometimes see women making investment in tech. She is the one entrepreneur in the book Dan Mezer risky. It was a personal trainer who's an athlete in Canada and he was injured and he started a business where he initially hired employees who were also personal trainers who represent his brand. But he said it wasn't working out because he couldn't really afford to pay them a competitive salary so they were cutting side deals with its customers and saying you know I'll work with you a little bit cheaper in my fight business. So he got rid of all the employees and he was ready to close the business. And then he said Well let me think about how do I align the interests of the trainers that my interests.

[00:14:59] And he hired trainers have contractors built a large army of them that they would pay a licensing fee child. And he developed this really souped up see if it's like a CRM it stores all the clients workouts in it has professional development. He spent like 250000 dollars on an over X number of years I forget how long he's actually made it into a product that now he has a white label version that other companies license from him. So it became another revenue stream for him and he's really not a techie. He hires a developer I think he'd think he's paid the developer about a thousand dollars a month as a freelancer to do work on and cancel the upgraded. But it's become like his not so secret sauce you know. You know he. But I see if there are people with me with write it. Sometimes they get involved in a project just because I care about it and I spend an inordinate amount of time on it. It's not profitable at all but it's just something that drew my life blood. But it's not really serving my business at all. And I think you know this trapping something is something you enjoy it can happen you know whatever it is. So you have to be mindful of that.

[00:16:10] I think for the majority of these business partners it was they did have that balance when a lot of them did get into business because they love care. They know they're a nutritionist or they love real estate or something else but they supported it and you have a kind of you know where they you know they're glued to their laptop all the time either. I did find that they made time for other things outside of the business. And that's a little counterintuitive when a one person business always feel guilty like they should be working constantly. I think because when you're when you're only a little behind. I mean I am you know I try to get caught up and then some. You know there's a climate emergency or something like that. Then there goes your perfect schedule now so but they will say you know I need the distance. Even if I am a little bit behind I'm going to take the afternoon and go to the cafe and work on strategy because it's wet and otherwise I'm just doing this hamster wheel and it is kind of unique to them. You know I don't find that many one person businesses really do that because they don't feel they have the luxury.

[00:17:17] Honestly I would say there's a lot of businesses that do this is one of the things that prej Do you know you get the 10 million dollars. But if you're not you're not pretty structuring your schedule so that you've got dedicated time on a regular basis to think and do strategic work that you're never really going to achieve significant levels of scale. You may drop by 10 percent but you're never going to get that 20 30 40 50 percent growth because you need to step back and look at where does my focus need to be to really move the needle to increase value and prove process.

[00:17:48] I think there's a couple of mindset things are a couple of ways of thinking our practices habits that these folks have. I like the one is kind of this continuous improvement that I'm always looking at how to how to improve a process how to a new technology how do I improve quality reduce errors and thanks to this idea strategic thinking taking a step back.

[00:18:10] You know even when things are busy taking an hour or two and thinking like what do I need to focus on strategically what else do you see any other kind of mindset or habits that these folks tend to tended to do when you look at that group when that just popped into my head as you were saying that is coaching it today or be in coach and that's very interesting you think because usually you see people getting coaches when they scale up and they're getting to the next level inside in the business and it's you know I was a small business CEO. Now it's a middle market company to expand my skills coaching early and there were people that had a plateau where they were like in that 500000 dollar range and they felt like they couldn't figure out on their own had a bus through it and they went and got a coach and I remember one of the entrepreneurs saying it was a little bit into account. His ego didn't go to this other person and he actually hired someone in his industry to coach him and you pass that mindset. And I think the coaches are really helpful in ending the Entrepreneur of the mines that only they can do things a certain way. Not that that's a big issue I think for people I think who care about their work.

[00:19:21] They can't let go of the reins because they have such high standards but that's with the system come into place. You know refeeding really reverse engineer what you're doing and tell someone exactly what that was a and b coach but you need a coach help you do that and you teach them because I'm working the gazelles coach on my business and it's very easy to get distracted. You know you have a lack of direction. Like when he brings up with Doug which brings me to my court it goes up you know I have a list of I. And he's like wait a minute Elaine What's that one day that you can do to move everything forward like 1 2 3 4 6 3. You have to keep bringing me back and I think we can see you know we we tend to know where opportunities will lead and that's part of the challenge just like you have five things on the table you're moving forward on all of them and then one of them picks up traction you can focus more on that one. I did a step I can say that one didn't pick up traction as quickly as the other ones. I'm not going to let the external forces drive me I'm going to have more of a strategy and primitivist to make it happen even if that one Todor is decided.

[00:20:35] The most important thing in the business that three of the coaches are so valuable because it's not ripping a journalist straight. I know many entrepreneurs over the years it would be hard for someone to describe a scenario to me that I haven't heard before in letting me know that it has that unique Uber in life. But you know running out of money or something like you know how many times I've hurt. That's right. It is. And then what happened. Well you got more your employee left you or your business collapsed. Whatever. I've heard it before and I might be able to think of ways that it hit this story could have ended differently. That's right. That's about your coach because they work with other people. They've heard the stories before and they've seen many different solutions. They have the current solutions and if they have sort of a system that they can teach you to help you logically through things that really gives you a great competitive advantage. It's just the creative people I think because I'm you know I would say you know there are some people that are they can be carried away with their creative ideas. It's very hard to wean yourself and be very systematic and logical and say OK what are the steps to executing on this or what even. Is the vision in the first place.

[00:21:50] Well I know I think there's there's a there's a process there's a cycle there's a series of patterns.

[00:21:57] And I think as a coach I think one of the things we do is help helps the patterns in businesses in situations in entrepreneurs and I think having seen things play out again and again in slightly tougher ways but we can abstract it to a level that says one of these situations and here are positive ways it can positive outcomes it can have here negative outcomes and how do we create more awareness of what's going on so we can create more opportunities for positive outcomes like this and you know but as a coach we're are flashlights not hammers right.

[00:22:30] We were there to kind of illuminate things and create focus around things not necessarily to do the work. And I think that's you know I think that's the idea of an early stage company and a solo entrepreneur actually getting Hodgetts it's actually really creative on that stage because you have no you have no perspective. You are the business you have no one to actually play play the role of the giving perspective or diversity of opinion in it. I'm not surprised that I as a coach I use a coach because I get I get the model.

[00:23:00] I don't think of it as a luxury. No and I get to extrapolate using it. But when I saw with know this rather than just the coaching session it sort of an unconscious process that gets unleashed when you have someone challenging you and force you as you're comfortable ways of thinking all the sudden you know you're cycling class or yoga or whatever you do and then you will come to you about how to move forward on something when you weren't even thinking about it. But if no one had planted the seeds in your mind just be going along doing work that had no real method to them. And I think there's just something kind of mysterious about the process. Like with any chair that kicks in that you can't predict and that makes you grow as a person as a citizen and as an entrepreneur you also think I don't know what you're coaching styles because I have worked with the push. What I was with my coach. I can talk that other issues that impact the business. I'm a mother with four children I have a pretty busy life. I do have a full time business. And sometimes that impacts my business and I may have to a balance where there's a lot of it ends of me with my kids and working on the strategic goals that I could talk about that I'm like OK where did the ways around those things. We're you know I still need to get the thing done in my business. I just have a lot of it. And so my time has you know that that's useful too because they could give you a creative side you might not know before.

[00:24:33] I think that's very true.

[00:24:34] I mean I would say you know I generally work with leadership teams on dealing with some of the team dynamics. And one thing Ashleigh as you know leadership teams are are people they're made up of people. You know them people are complicated and people have lots of things going on and so you know my general Brownbill are my kind of the way I approach it is you know we're going to talk about anything that's impacting the business right.

[00:24:53] So if someone's got something going on in their personal life that's impacting the way they're showing up in the business. And when you do get about it you know I'm not there to be a therapist and I'm not there to deal with professional psychological diagnoses and things but you know to the extent that someone has you know a personal situation that's impacting their ability to shop how they're showing up. That's something we should know about and something we should accommodate with and support them and help them with. So I think that it's I think that's generally I would say most coaches have that view.

[00:25:21] Because I think as coaches we're always looking at overall performance and we have to deal with the whole person. Yeah I would say as you shift more to the consulting side you're dealing more with the people that are just focused on the fun and the pure business side of it. But it's a good point and I think as any entrepreneur or any senior exec in these teams needs to kind of figure out not only for themselves but for the people they're working with. You know how what's going on and how do I get curious and how do I support them.

[00:25:45] It's interesting. I'm a team I would imagine it's important too because more companies are saying your whole self to work and they are more concerned about life. I think I think both Rithy also is I see a licensee a man would be very involved with their families in a way that generationally was not supported my father's gender. You it's like it a big now it's very much family by family. And I see when I talk to young men and they're just with work and life balance. So you know it's sort of a new frontier and something where I know it's good it's written down the greatest some creative solutions that also work within the business because ultimately they may like you but they also need you to perform and do the job.

[00:26:31] And that's one of the reasons I really love services businesses just kind of the whole service sector is that because you are dealing fundamentally you're dealing with people you know and you know incredibly powerful incredibly capable. You know that also incredibly complicated at times. And so you know I think on one hand you know we want to be thinking about you know how do we how do we focus how do we streamline how do we they processes around it. But a lot of it is how do we build that culture spread.

[00:26:56] How do we create engaging cultures inside the company that are going to allow me to find the talent retain the talent that is really going to help me grow grow the business and it's about understanding who the people are and what they have got going on and how do I become a positive force in their lives that creates that engagement for them.

[00:27:15] Because even in a one person business culture is important because if the answers are raw Cherry You know it's like I think it's more important.

[00:27:25] Know traveling with it you're not me.

[00:27:29] And the you know you do something you know we take you six months to pay me or whatever I might make the decision that it wasn't really worth it. So if you know you're not if you know about culture even in a one person business the culture that you project that people that support you or your vendors then your business won't grow either. So I think you know that's where the coaching people don't realize that they just think they're in a vacuum. But you're really not.

[00:27:54] Yeah I think it's very transactional and it is just because I pay somebody or I have an invoice or something like that that that's going to be everything that decides who works with me and who doesn't. And I think you're right. I think the culture actually becomes more important when youre dealing with kind of a freelancer gig or you know contracter economy or system. So were actually hitting time here but if people want to find out more information on the book about. Your writing about the work that you do what's the best way for people to get a hold of you and contact you they can find me at Dimery and alert the person.

[00:28:29] Business is still down in words numbers that I have a contact me there. So I welcome them to write to me get in touch I really enjoy hearing from entrepreneurs so please tell your story. I recollect it differently. I love hearing people's stories and you don't have to be a million dollar one person business I cover scalable businesses and I come businesses that are one person I have got a million.

[00:28:54] So please get in touch awesome and I'll make sure that those links are on the show notes for the podcast. It was a pleasure. Thank you so much for taking the time and I'll look forward to keeping in touch and excited to see what else you write about soon.

[00:29:06] Thank you so much. This was fun.

[00:29:10] He's listening to scaling up services with business coach Bruce Isobel's to find a full is a podcast episode. Download the tools of worksheets and access other great content. This is a website that scaling up services and Dobry to sign up for the free newsletter scaling of services dot com slash newsletter.