Friday, August 12, 2022

This musician runs two seven-figure businesses – as the million dollar sole proprietorship continues to rise

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Graham Cochrane grew up with a desire to become a rock star. Today, the father of two girls, ages 10 and 12, is a rock star in the million-dollar sole proprietorship world.

He owns two seven-figure businesses in Tampa, Florida, where he resides: Recording Revolutionbuilt around a blog and YouTube channel he built to help others learn about music production and the highly automated GrahamCochrane.com, where he offers coaching and courses to help people develop passive sources of income. He learned to set up his business so that he could work five to six hours a week and produce content, such as his podcast The Graham Cochrane Show– and spends the rest of the time with his family doing things he loves, such as playing music, working out at the gym, and going for long walks. Along the way he wrote a book called How to get paid for what you knowreleased this spring.

The million-dollar sole proprietorship continues to rise with 43,012 breaking through in the $1 million to $2.49 million revenue category in 2019 (the most recent year for which Census statistics are available), up from 41,666 in 2018. 2,553 had sales of $2.5 to $4.99 million and 388 had sales of $5 million and more.

“Million dollar sole proprietorship” is of course not a scientific term. These are what the Census Bureau calls non-employer companies – companies with no employees except the owner or owners. The vast majority of non-employer businesses are single-owner, but some are partnerships or have multiple owners.

The number of companies in other high-income categories also grew.

312,422 reached sales of $500,000 to $499,999, up from 297,498 in 2018.

694,289 reached sales of $250,000 to $499,999, compared to 668,152 in 2018.

2.2 million companies reached revenues of $100,000 to $249,999, up from 2 million in 2018.

At the same time, the total number of unemployed businesses in the country grew from 26.5 million to 27.1 million, as part of an ongoing trend in which more Americans are embracing solo entrepreneurship or setting up small businesses with a handful of employees. Whether this trend held up during the pandemic remains to be seen until the census figures for 2020 and beyond come out. The number of new companies in the US has soared. However, small businesses faced extraordinary challenges during the pandemic, and we won’t know the revenue trends until the Census bureau has processed the numbers.

While owners who break $1 million are essentially the Olympic athletes of the sole proprietorship world, they are a prime example of what a person can achieve by increasing their impact through the right strategies. Here are some who have worked for Graham Cochrane. I will profile a few more million dollar sole proprietorships in August.

Dive into your field. It’s easiest to build a high income business if you skip the learning curve and find a niche in an area you already know. In Cochrane’s case, while playing in a band called Unit 5, the musician earned a college degree in audio engineering, building a knowledge base that would form the foundation for his future entrepreneurial career.

Be prepared to experiment with your business model. After graduation, Cochrane worked in a recording studio in Virginia. “I realized the hours were incompatible with having a life,” he says. He decided to go freelance and opened a small recording studio in his house, where he worked during the day as an audio engineer at a software company. Somehow he found time to write and record his own music.

In 2009 he moved to Florida and started his blog and later his YouTube channel so that people could see on his computer screen what he was teaching them to do. “I realized that people wanted to learn more about music production and recording than they wanted to hire me to produce their own albums,” he says. By this time, audio equipment was becoming much more accessible.

Build on what works. Looking for ways to monetize the videos and articles he was creating, Cochrane created a course on Pro Tools — which he describes as the equivalent of Photoshop for music — for which he charged $45 and placed it on his own. YouTube list. “That’s when I realized there’s something here,” he says. “I sold five or ten copies that week. I remember that first sale that came through, and it was a lightbulb moment.”

Cochrane doubled its blogs and YouTube content. He also introduced more courses so he could have something to sell, and a more expensive course to see if he could make more money per sale. Although friends said he was giving away too much content for free, he found that the more he shared, the more his business grew.

By age four, Cochrane had so much work on his plate that he hired a friend to help him with emails and customer service, as well as occasional video editors and graphic designers. (Interesting, an informal survey of 50 companies I did for my book Small business, big money found that the four-year figure is an inflection point for seven-figure companies. They hired their first employee on average and also made $1 million in revenue in the fourth year. Why is the fourth year so important? I would like to know. This deserves further and much more extensive research).

Learn to love automation. Cochrane, meanwhile, also launched RyanCochrane.com, its personal brand, and set it up to scale. “The great thing about these types of businesses, where you do information products and online courses, is that so much is automated,” says Cochrane. “Automation is so powerful. The content I create on YouTube and my podcast every week has an exponential component so people can find it for themselves. It’s almost 24/7 marketing. Email marketing is automated. Bringing people into the ecosystem and offering them my products, it’s all automatic. I am not limited by the number of hours I spend or the clients I serve. It is largely asynchronous.”

Be generous. Today RyanCochrane.com is a subscription membership site, offering a new mini course every month, hosted on the platform Kajabi, to subscribers, and they can join a live coaching conversation with Cochrane. Inspired by Tim Ferris’ book The 4-hour work week, he only works five to six hours a week because his business model is so highly automated. “As long as I’m focused on creating regular, valuable free content to get more leads into my email funnel, the funnel will do the rest,” says Cochrane. “It offers products, my membership continues to grow and my workload remains the same.”

But nothing stays static in business, and Cochrane says he’s “relentless” in examining his business model every six months to make sure he’s doing things efficiently — and tasks that take a lot of time without contributing to business growth unnecessary. “I go through that list and say, ‘What are the 80% of the things on this list that only contribute to the 20% of sales in the business or less?’” he asks. “I see a direct correlation between doing that job and making money.” It also saves him a lot of time doing the things that matter. “I take my kids to school and pick them up every day,” he says. Having the freedom to embrace the daily routines that really matter in your life is what business property is all about.

Anna Sicoli contributed to this story.

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