When Kish Vasnani, now 35, got fired from his sales job selling software in August 2016, he didn’t want to get out of bed. It was the second time he’d lost a sales position under similar circumstances. “I was working for a venture-backed software company,” he says. “If you didn’t hit your quota or it was a bad year, they fired you. Those types of organizations tend to be very short-sighted.”
Rather than dive back into a similar pressure-cooker, he decided to go into business with his wife, Vanessa Jeswani, 33. She’d already ditched her corporate marketing career to run an ecommerce business on Etsy from their tiny New York City apartment, doing digital marketing consulting on the side to help pay her bills. Vasnani quickly arranged to do part-time sales consulting in exchange for health insurance at a friend’s marketing agency while they built the company—and they were off to the races.
“I didn’t want to have a boss again,” Vasnani says.
Their commerce business morphed into Nomad Lane, a brand that sells travel bags online. Today, their two-person business generates $1.5 million in annual revenue and is profitable, according to the founders. Embracing their love of travel, Vasnani and Jeswani are currently running their location-independent business from sunny Bali, where they plan to stay for a year.
Nomad Lane is part of a fast-growing trend—the rise of million-dollar, nonemployer businesses. Nonemployer firms are those staffed only by the owners. With low-cost technology making it easier than ever for the average person to start a business and many people looking for better work-life balance and pay than they can find in a traditional job, it’s a trend that keeps growing with each passing year.
There were 36,984 nonemployer firms bringing in $1 million to $2.49 million a year in 2017, according to the most recent Census data available, up 38% from 26,744 in 2011.
Husband-and-wife team Kish Vasnani and Vanessa Jeswani turned their passion for seeing the world … [+]
What are these ultra-lean businesses doing to get to $1 million? The top industries in 2017 were professional services (9,745), construction, (4,699), real estate (3,050), retail (2,976), healthcare and social services (2,791) and finance (2,781).
Many other nonemployer firms are poised for growth. There were 1.97 million nonemployer firms bringing in $100,000 to $249,999 in 2017 (compared to 1.86 million in 2016); 629,837 generating from $250,000 to $499,999 (compared to 590,948 in 2016); and 282,819 generating revenue from half a million to $999,999 (compared to 264,140 in 2016).
Given their economic impact and potential to expand into job-creating firms, one-person businesses are now being included in prestigious studies like the Global Entrepreneurship Monitor, published by Babson College and other leading entrepreneurship institutions. Nonemployer firms were also the focus of Global Entrepreneurship Week’s GIGcon, a free virtual event introduced for the first time this year.
However, some solo service firms could see business slow in coming months once AB-5 takes effect in California on January 1 or if there is passage of laws such as NJ SB 4204 in New Jersey or similar legislation under consideration in New York, Oregon and Washington. The laws, designed to prevent worker misclassification, place stricter limits on who may work as independent contractors. Many owners of solo businesses in these states have clients who contract work to them and some fear they could see their projects dwindle.
So how did Nomad Lane’s founders build their ultra-lean business to $1.5 million in revenue? And how can you apply their approach to your own one-person business or partnership? Here are their strategies.
Practice active self-motivation. In a society where many people have been told since childhood that the only acceptable work is a “steady” job, making the leap into generating your own income in a small business can be a bit terrifying, as Vasnani experienced.
“Definitely in the beginning, we were very, very scared,” says Vasnani. “We really didn’t know if and when we would be able to support ourselves again fully.”
Every morning, on waking up, they took a moment to think about the day’s goals and pump themselves up. “Our main goal was really to go to bed every night feeling we had accomplished something—a happy customer, a new sale, an Instagram influencer mention,” says Vasnani. “Every little victory or accomplishment we had, we celebrated in a big way.”
To grow the business as quickly as possible, they read about 50 books on entrepreneurship, with the goal of learning how other entrepreneurs built their brands. Among their favorites:
Shoe Dog by Phil Knight
Never Split the Difference by Chris Voss
From Zero to One by Peter Thiel
Principles by Ray Dalio
They also listened to podcasts on entrepreneurship. Their favorites:
When the entrepreneurs both lived in New York City, they also attended as many entrepreneurial events as possible. One favorite was Founders’ Friday NYC, where they met many like-minded entrepreneurs.
Surrounding themselves by entrepreneurial thinkers reminded them they were not alone when they hit inevitable setbacks, such as manufacturing errors—a problem many direct-to-consumer brands have faced. “We watched and saw how they communicated and how they fixed the problem, so we can learn from them,” says Jeswani.
“We saw there were other people who had gone through worse,” adds Vasnani. “They were able to recover.”
Fortunately, the duo came to e-commerce with some background in related fields, picked up through osmosis while growing up. Vasnani’s father ran his own men’s clothing stores in Atlanta, where the family moved from India when Vasnani was a small boy. “I understood how to sell to people, how to budget, how to forecast,” Vasnani says.
Jeswani’s parents did garment manufacturing in the Philippines, supplying big box retailers in the U.S. with children’s clothing. “I saw the other side of the business—manufacturing and production,” she says.
Hack your credit card points. Nomad Lane’s founders extended their $10,000 in initial startup cash by putting as many charges as they could on credit cards but paying the bills in full each month. This has allowed them to accumulate millions of credit card rewards points that they use to fund purchases such as flights to their factory and even their date nights. With about 20 credit cards between them, they keep their credit utilization down to 1-2%, which protects their credit rating.
A key element of this strategy is being careful not to overspend. “We carefully watch all of our costs, all of our expenses, all of our overhead,” says Vasnani. “We’ve been focused on sustainable profit growth since day 1.”
Learn to love a narrow niche. When the founders of Nomad Lane noticed that travel-related products—such as pillowcases with travel photos on them, passport holders and travel pouches—tended to sell best in their Etsy store, they decided to focus on these items. From their constant study of entrepreneurship, says Jeswani, “we had learned there were riches in niches.”
Nomad Lane’s growing revenue told them they were on the right track. They brought in about $23,000 in sales in 2016, their first year working together, as they focused on selling mostly smaller accessories. By year two, they hit about $35,000 in revenue by paring down their merchandise to travel items, like travel socks.
Know when to bet on your best ideas. As they gathered confidence that focusing on travel products was the way to go, the couple liquidated Vasnani’s 401(k) —which they estimated would cover 12-15 months of frugal living—and began developing a new product, the Bento Bag. It is a unisex travel tote designed to help frequent fliers pack in an organized way and make the most of the space under an airplane seat.
Both knew the world of frequent travel firsthand. They had met at a Cinco de Mayo party in New York in 2012, just before Vasnani, then a traveling salesman, had to move to Mumbai to fulfill a contract to work there until 2013. Once he relocated, they met each other in both India and the U.S. and many destinations in between until they could reunite in New York.
With the help of a freelance designer they hired on the freelance platform Upwork for $400, the couple created a blueprint known as a tech pack for the Bento Bag. They designed it from water-resistant, premium nylon to allow enough room for a 15” laptop. It also has a built-in phone charger.
“We wanted to design something that was functional but aesthetically pleasing,” says Vasnani. “I sit in a lot of business meetings and often, when someone walks in with a backpack, they look like they’ll be going to the top of the Himalayas after the meeting.”
Investing about $3,200 of their savings, the couple found a manufacturer in Asia at a trade show and hired that factory to create a sample.
Trust the wisdom of the crowd
Nomad Lane’s founders designed the Bento Bag to fit under airplane seats on today’s cramped flights. … [+]
. To fund their company’s growth, Nomad Lane’s founders planned a campaign on the crowdfunding site Indiegogo, with the goal of raising $15,000. Many entrepreneurs who sell products allow supporters to place pre-orders for their products, essentially obtaining customer financing for the manufacture.
Three months before they launched the campaign, they started building an email list. They did this by running Facebook ads that targeted people interested in travel bags and then kept in touch by sending them design previews as their idea evolved. Jeswani had experience running Facebook campaigns from her previous corporate marketing job and knew how to manage spending on the platform carefully.
After spending about $1,000 on the ads, they had built a list of about 5,000 people. When it came time to launch their campaign, they sent out a calendar invite for the day of the launch, to remind them of the campaign.
Their jaws dropped when, within the first hour, Nomad Lane achieved $20,000 in sales. “The rest was a blur,” recalls Vasnani.
Nothing the momentum, Indiegogo’s internal team helped the couple market the campaign and to extend it from June 2018 to March 2019. Expecting to raise $15,000, the duo came away with $2.1 million. With that money included, their revenue hit about $1 million in 2018 and is on track for $1.5 million in 2019, they say.
Let your customers teach you how to grow. Initially, Nomad Lane’s founders priced the Bento Bag at about half of its current $198 price. However, when customers gave them feedback that they were underpricing it, they listened, realizing the business would be more sustainable if they raised it to a price customers suggested it was worth.
With their cash flow strong, the couple is now thinking about expanding the business. Although Nomad Lane has been thriving as a two-person operation, they plan to add jobs eventually, as many million-dollar, one-person businesses and partnerships eventually decide to do. “We’re curious to see how much we can grow this,” says Vasnani.