These lessons may help your one-person business grow -- and make the annual list of the Inc. 500.
How can a soloist surpass much larger companies and reach the prestigious Inc. 500 roster of fast-growing privately held firms? By staying nimble, creating a deep network of referrals, and using creative thinking to transfer risk and retain profits for his own firm.
Those nuggets of advice were among the gems shared during a recent chat with Jim Fairchild, the first soloist to reach the annual Inc. 500 list. Fairchild's one-person firm, Coggin & Fairchild Environmental Consultants, Inc., didn't just squeak in at the bottom of the list. With a whopping $3.4 million in revenue in 2006, the company landed a spot in the top quarter, at number 121.
Intrigued with how a soloist accomplished such a feat -- and what he could teach other independent entrepreneurs about generating impressive revenues while retaining a one-person payroll -- I tracked Fairchild down while he was vacationing recently in the Wisconsin Dells. What lessons can you glean from his success?
Operate from Unique Strengths
An Iowa-born farm boy who majored in Chemical Engineering, Jim Fairchild has stayed true to his roots: he understands the land and what chemicals can do to it. Based in the Chicago suburb of Elgin, his consulting firm advises clients in the construction and petrochemical industries about environmental cleanup, especially groundwater and soil remediation. Originally a partnership, Fairchild bought out his co-founder several years ago and now works solo. With more than two decades of experience, companies turn to him to save money and reclaim land and building sites that can be put to commercial use.
Lesson: Find your passion, create deep expertise, and become recognized in a niche field that offers client value.
Recognize and Seize Opportunities
While state and federal regulations are the bane of most businesses, Fairchild recognized early that offering solutions to regulatory hurdles presented a potentially lucrative business proposition, particularly as prime real estate continues to grow more scarce. He stays abreast of changing legislation to adapt service offerings to existing and new clients.
Lesson: Where others see problems, creative soloists envision business opportunities.
Shift Risk, Reap Rewards
It's rare for small service companies to reach the Inc. 500 list because of the inherent limitations of billable hours. Fairchild has managed to break this ceiling by offering both hourly and project-based pricing, and by transferring risk from his corporate clients to his own firm. For example, when Fairchild's company contracted to dispose of contaminated soil for a major client, the soloist carefully tested the material and tracked down a landfill that would accept the soil at reduced rates because of its classification. The company was pleased to remove itself from the process and Fairchild was able to reap much greater profits.
Lesson: Circumvent the revenue restrictions of billable hours by mixing in value-added services billed at flat-rate pricing.
Cut to the Chase
Fairchild often sets himself apart from competitors by making decisions on the spot when clients are facing major environmental issues. "I'm a consultant who actually makes recommendations instead of qualifiers," he says. "Rather than saying, 'I'll get back to you' and then racking up several more hours of billable investigation, I'll advise the client on what I think it will likely cost right then and there," he adds. "Clients notice the difference."
Lesson: Candor can be a refreshing alternative for clients, and can create a competitive advantage.
Keep Cash Flowing
Mixing steady, ongoing work with larger projects keeps cash flow under control at Coggin & Fairchild. The soloist intentionally takes on both small and large projects to balance revenue and cash flow needs -- and to sustain personal interest. "I enjoy the change of pace, and like the variety of doing different aspects of both small and large projects," he says.
Lesson: Mixing project sizes and timetables keeps cash flowing, builds skills, and sustains interest.
Do or Delegate
Fairchild admits to being a hands-on person, and enjoys the field work of soil and water testing, or equipment repair. "Often it's most efficient for me to roll up my sleeves and do something myself," he observes. On larger projects, he turns to a team of trusted subcontractors who are experts in their respective areas. "I know who the smartest people are, and I call on them when it makes sense to do so."
Lesson: Expand your company without increasing overhead by creating a virtual team of experts you can rely on.
Focus on Profits, Not Revenue
While robust revenue numbers have placed him high on the Inc. 500 list, Fairchild is most pleased that his profits have held as his company has grown. "It's easy to see a boost in revenues, but the profits don't always follow," he observes. "I try to leverage my flexibility as a soloist to make sure I'm doing projects that translate into increased profits, not just increased work."
Lesson: Stay focused on profits and net income, particularly when facing the siren call of growth.
Work the Network
Fairchild understands that since he's working as a one-person business, connections are crucial. An upside to his strong network is the minimal time he spends on marketing, since his work is nearly 100% repeat customers and referrals. His commitment to delivering quality work and treating suppliers and colleagues with respect springs not only from integrity but also a deep understanding of network power. "It weaves an incredible Web," he says. "Satisfied customers are my best marketing, and it's a long-lasting effect. I've had projects come from contacts I haven't been in touch with for nearly a decade."
Lesson: Invest in creating and sustaining long-term professional connections that lead to mutual success.
Choose Growth Carefully
Several million-dollar projects led to Coggin & Fairchild's growth spurt in 2006, and the company's new status as an Inc. 500 winner is bringing more work each day. Considerations about growth now become more important, Fairchild observes. "I'm perfectly content to remain a soloist," he says, "but it's also fun to consider future opportunities." Organic growth, however, holds little appeal. "The 2-5 employee range seems pretty awkward, and I'd like to avoid that stage and just jump to 20 employees if I'm going to do it," he remarks. "But expansion just for growth's sake isn't appealing. It has to make sense, on all levels -- financial, work load, personal -- for me to give up being a soloist."
Lesson: When facing decisions about growth and the lure of higher revenues, consider all aspects, personal and professional, immediate and long-term.
Inc.com columnist Terri Lonier grew up in the Midwest where the closest she ever came to farms was the annual Fall hayride. She's the founder of WorkingSolo.com.