Month: February 2015

The Big 3 Takeaways from My First $20

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I can hardly recall what I had for lunch earlier today, but I will never forget the first time I earned $20.

Free work yielded a referral, and I got a call a few days later. He told me about what he wanted, his vision, and how long he had before he needed a design. Everything was smooth. Until….

“What do you charge?”

“Um. Well. Uh……”

A few more seconds of frazzle.

“I guess $20 an hour. It’s probably a four hour job,” I said shakenly.

Truth be told, I had no idea how long it would take. I did, looking back, a moderately good job. This small sale put me on a whole new journey, one that I’m still on today.

So let’s dive into some lessons learned while reflecting on the origin of it all.

I made a ton of mistakes selling my artwork and graphics, learning to coach (which is selling my product to parents and delivering to youth – a complex business scheme) and building a revenue tracking system for a large corporation.

I learned faster when I messed up, versus when I was successful. Mistakes force you to adapt NOW.

My first $20 taught me three things, the hard way:

 

  1. If I’m going to make money doing something, I have to take myself seriously and project that.
  2. Before I sell anything, I should know what it costs to do so, whether that be time or supplies.
  3. If I’m not ready to name a price and offer my services, I don’t have to. I can make the proposal in the way that I’m comfortable, where I can articulate my ideas well, but I have to approach it the right way.

That’s not to say that success isn’t awesome, either. I know that I would have killed for some input on a second income when I got started, just to know someone else was feeling the same way. With success comes a lot of things, and I remember these three awesome thoughts that I hope you have too:

“I can make money doing something I love”

“I got paid to do this, and I don’t have any education in it.”

“I am not even that good yet. Imagine if I could get 10x better what I could make.”

 

Let’s get straight to it:

 


 

  1. Be More than a Hobbyist

 If you’ve come here to side-stream, or to improve it, you need to make sure you are always using this word in conversation when you bring up your talent, work, passion, or job.

 

Professional: (n) – engaged in a specified activity as one’s main paid occupation rather than as a pastime.

I met two clients after starting just from putting my profession out there when they ask what I do. I am quick to distinguish what I’m doing for money (ex. presentations) from what I do for fun (ex. snowboarding).

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Here’s an example:

Brian: “I’m a dog walker for big breeds in the Norfolk area.”

Frank: “I’m a professional dog walker for big breeds in the Norfolk area.”

At this point, Brian is saying “I’m a hobbyist.” There’s nothing wrong with that, unless he’s trying to earn money from this approach. I know absolutely nothing about dog walking, but I know Frank is making money doing it and that he’s got an area and a type that he serves.

Whether you are making $3 or $3MM, you are a professional– you do your work for an exchange of cash.

You want the fact that you do your craft, love or solution for money conveyed and yes, you say it even if you haven’t sold anything, yet. It is an important distinction.

As Side-Streamers, we should be projecting that we do this for money and we have a specialty. Put it out there.  People want your help, your expertise and your ideas.

Don’t just say that you’re a photographer. Tell them you’re a professional photographer and you do family shots at carnivals. I’m not a presentation guy; I’m a professional presentation designer that loves to spice up talks for persons of interest. Don’t make it up, but share it!

It’s awkward at first – work through it and continue to use it. The more you say it the better it will feel and the more it will resonate.

How many times have you heard someone say: “Maybe we should hire a professional,” or something to that effect. You want to be in that group, so assign yourself that title.

Bottom Line: Use the word professional and mention your specialty.

 

  1. Know Your Costs

When I got asked my hourly rate, I was on the spot and nervous. I didn’t know, so I sold my time for $20/hr. That one worked out. But only because my service didn’t involve costs at that point.

Fast forward a year, to where I was doing some digital paintings on the side. I posted a shot on Facebook, and got a request from a friend for a copy. I was so excited. $30 I screamed!

Turns out printing was $20, and shipping was $8.

Print, Pick Up, Pack, Ship, Cash Check = $2 Profit. Wow.

DON’T LET THIS BE YOU!

I don’t like focusing on what I’ll get out of a client initially, after all, that’s what makes me a good Side-Streamer. I want to be obsessed with knocking my service out of the park!

Still, you need to know, roughly, what things will cost when you take on a project. Remember, information is EVERYWHERE. What supplies do you need? What software are you using? What about travel time? Sometimes it’s not that easy, but I urge you to take time to write it all out. (If you’re on the spot, see takeaway number 3!)

Am I telling you to have a figure down to the cents of it – no. But if someone says, I’d like you to build a presentation for my 5-minute talk, I know it will take me a few hours of image editing for that length of time in a presentation, and even more the arrange the images in a logical display. I can’t quote him a $100 pricetag. I won’t do well on an 8-hour project.

Bottom Line: Get familiar with your costs to produce. Maybe it’s zero, $40 per transaction, $15 in shipping per sale, or a flat space rental of $50/hr. You can’t earn until you know what the cost is!

 

 

  1. Carrot & Stick Technique: Displace Estimate & Beat Competition

If you don’t know the guy that rambles and quizzes you about a project and 30 seconds later says, “What will it cost?” then count yourself lucky.

Many numbers people will try to intimidate you to do complex math like you’re Stephen Hawking.

See, I won’t forget this guy. I had quoted him $20/hr for four hours. It took 10. I wanted the job, but I lost my balance back from that overly type-A question right in my face. I wasn’t prepared.

The Carrot-and-Stick Technique relies on you having good communication, and it’s a two-part process.

 

The CARROT… (at the meeting/phone call/etc.)

I think better about my work not standing in front of someone, so I make sure I’m give myself the chance to do that. If I’m asked for an immediate quote, I say something like:

 

 

“Before I give you a price I’d like to ask you some questions,

get a feel for what you’re asking for exactly, and then map out my idea and what

it could cost. You’ll have a full idea of what I would do and an accurate estimate of the cost.

I’ll get your email and I will send you a full description and proposed price later today/tomorrow/reasonable deadline.

How’s that sound?

Notice, I made this entire thing about him. I didn’t say – “I need to calculate my potential earning at home.” It’s about me giving him a fair rate and great service. [Bonus Point if you work professional into this kind of statement]

As a Side-Streamer it’s important we make EVERYTHING about our client. (Join the email list and learn ALL about this in the Guide to Price Your Side-Stream)

Simple fact of business – if someone is paying me, it doesn’t matter if I love it, it matters that they do. You have the tools to nail it right here:  Read the Boomerang Technique to prevent missing what they want from your service

A few here and there will demand a price on the spot. I manage to give them a fair range, but ask for a moment to think, go to the bathroom, or pop out a cell phone and do some math. “I can give you a best guess range, and then follow up with more details later.” I tend to overinflate these numbers if they are pushy, just because they are being difficult.

 

The STICK…(the communication before the pitch)

There’s no easier way to beat competition than by great communication. Send an email when you get home to thank them for meeting with you, like this:

 

“Hey ____________.

 Thanks for meeting with me yesterday. I’ll be working on your estimate today

and will get it to you as promised by [deadline you gave].  If you have any questions

in the meantime, feel free to ask them!”

It’s an easy a business gesture shows you listened. You want a happy customer experience from the meeting to the quote to the estimate.

As you lay groundwork for a good relationship of service to your client, build your pitch around what you already know about him or her.

Next, you’ll send him your estimate, and don’t think you have to have a perfect excel file emailed to him – do what makes you comfortable. If you’re better with numbers, use numbers. If words suit you, do it! When you email someone your price, you’re sending them a pitch or proposal. If all you do is write a dollar amount, you’re missing a HUGE opportunity.

Don’t be afraid to really put time into your pitch. They will notice. For high conversions on a proposal, read my guide here.

Bottom Line: If you’re pressured, put the game back on your terms by effectively communicating with your client.

 


 

 

In essence, I learned that:

– There are people that want me to do free work, but I dispel them quickly; I’m a professional.

– Making money requires spending money. If you know what you would spend, you’re set to earn.

– Communication and a two-step approach are identified with high-value service.

 

 

What did you learn from your first Side-Stream money?

3 Side-Income Productivity Tips: How to Stay Focused

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Question from a reader last week: How do I stay focused on what I love?

One solution: Be a Jedi.

If you’re not that, here’s my take for us normal folk.

If you’ve got a side-stream set up, or you’re working on building one, you probably have a LOT on your plate. Let’s not forget real life stuff, too. How the hell do you manage it all?

My strategy starts with 2 building blocks:

1. Continue to do the fun parts

2. Limit the not-fun parts

It sounds obvious,  but unless you are ruthless with your approach, you’ll lose sight of these quickly. I have at many points, so I wanted to find a way to set myself up better. Obvious, but difficult.

If you’ve ever said, “this feels like a job,” “I’m not making enough,” or “I used to love work,” and felt the sinking feeling that comes from those thoughts, you’ve been there with me.

I’ve been working for 10 months on opening a non-profit after school academy. About six weeks ago, I found myself saying, “I can’t wait until this is funded, and I can worry about the kids again.” You see, we’ve been working so hard on the business, on funding, on the systems in place, on how we recruit and hire, and all those non-fun things, it’s hard to keep focus on the mission.

On top of opening the Academy, I got hired to do a presentation for a person-of-interest, coach two youth club soccer teams professionally, and consult for a few businesses.

How do I keep focused, keep moving, and keep sane?

Let me share three things the last six months have taught me about keeping my focus on what I love:

Solution 3

See more Pro System Tips from Ramit Sethi Here 

 Solution 2

Tim Ferris On Batching Tasks

 Solution 1

Entrepreneur.com on Outsourcing

 

When setting up solutions there are three main things to think about:

Cost: What am I giving up, foregoing, or paying. Foregoing is often an overlooked aspect. The “opportunity cost” of one project or experiment is usually declining something else, so always bear that in mind. Another thing to keep in mind: If you’re earning $20 an hour, and can pay someone to do your work for $10, you’re EARNING. That’s called arbitrage, a beautiful “business” word.

Time Investment: What do YOU have to put into it, how much does it take to upkeep, and will it net any return. That’s not to say that something with no return has no value, but consider the cost of upkeep for your smaller tweaks as well. If you can save BIG chunks of time now, you’ll net later, but don’t kill yourself saving seconds.

Try It: It’s impossible to be sure if your new methods are providing any solutions by guessing. It’s even tougher if you have seven things going on. Pick one thing to change this week and keep everything else the same. If you, for example, I coach four days a week, so I tried a system of brainstorming on Monday, drawing up sessions the next and then condensing them for practices on the third. Overall, I was able to plan out 4 weeks of practices in one sit down, which saved me time to focus on the girls! Try something new. What results do you get? Are you better or worse? Don’t guess, TEST!

 

Bottom Line: Attempt these solutions and see if they save you time, effort or money. For me, these are no brainers and I won’t go back!

 

Simplicity Principle I: Solving Problems and Getting Paid     

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        How Do Take an Idea to the Floor?

Just because you build it, doesn’t mean they will come. That’s not how things work, but there’s a ton of online resources that would point you otherwise.

“Demand” is one of those buzzwords that economists love, but the rest of us hate to hear. It just doesn’t resonate with those that aren’t super-duper into business trends. It is a word that’s important to understand. What is it, and why the heck do you care?

So, the ‘official’ text, from Wikipedia is, “Demand is a buyer’s willingness and ability to pay a price for a specific quantity of a good or service.”

Now we’re on to something: Willingness and Ability.

These two factors of our Side-Stream are ULTRA IMPORTANT. You won’t earn if you’re not taking both into account.

I’ve made this mistake plenty of times before, and spent over $500 on ideas that have no merit and will NEVER earn a cent.

Why won’t the idea earn?

Demand is two-dimensional. Without both dimensions, without willingness and ability to pay, buyers are bystanders.

When you start offering a service, it’s really important that you understand what clients pay for. Businesses that earn provide solutions to problems, but that doesn’t mean all solutions are created equal.

For example, as a graphic artist, I can sell a redesign of a Bodega’s banner that sits over their store.

bodega

 

But would they pay me for it? Heck no. Able, maybe. Willing, not a chance.

In fact, I’ve tried this business approach a number of times. They don’t want to pay for that solution – it’s not a serious enough problem. “How does a new sign help me again?”

Guess what though – if I offered to do the work for free, they were all about it. Willingness wasn’t concrete, and that was one strike against me earning. This isn’t baseball either. One strike is enough to kick me off the plate.

 

What changes between us wanting something and us being willing to pay for it?

The bodega wasn’t interested in my service. Do you know what he said to me?

“Unless you can improve the square footage of my store, I don’t want it.”

You see I made a big mistake.

The answer to his problem wasn’t in the product I was offering, and it wasn’t my skills or pitch that he didn’t like. I didn’t offer him a solution to his problem. When someone is paying for your soon-to-be-service, who do they care about most?

ONLY THEMSELVES. That’s it.

They don’t care about your business and your life, not your house or mortgage, just themselves and their problems.

So, don’t be shocked to hear that most people get turned away when they approach business opportunities. Why?

They go in with their hufflepuff chest out, talk about what they do, how well it works, and why you should be paying them.

I’ve said before, and I’ll say it again, people want to pay for solutions.

DON’T LET INFORMATION PREVENT A SALE

If sales require solutions, solutions require information about the problems.

If you know the problems, and have the solution, you can now position yourself to supply a client what they are already looking for. It’s like having the answers in the back of the book!

Your job, then, is to get the information that will allow you to create a solution that you know people want.

What information are you looking for?

The key to any good business is to find a niche. Another buzzword, GREAAAAT. But it’s true to every extent – in order to make sure there is demand for you and your Side-Stream you need to know WHO the heck you are working for.

“Everyone” is not an acceptable answer. That’s too broad.

What is a niche?

Think of a niche as an empty auditorium. You’re about to deliver a speech. Who fills those chairs? That’s your niche.

Are they 25 year olds with dogs, or 50 year olds recently divorced?

When we analyze our business, whether you’re going to be an assistant, or a coach, or a google calendar experts, those all have different audiences.

So maybe you’re working on a Side-Stream, but it’s not going well so far, or maybe you’re working on ideas. Wherever you are, we can always improve your strategy together.

Time for Practice with this! (download the Who Am I Selling To? Worksheet at the bottom)

 

 

 

Customer Worksheet

I want you to sit down with a piece of paper. Draw yourself a person in the center of it. Don’t worry if your person doesn’t look like mine. Stick figures work just as well! On the right side, we’re going to describe the person that would want our service.

Use descriptive words. For example, if I were going to set up a business where I would come to your home and decorate your place. If I had to describe the person that I would sell this SOLUTION to, I would work through it like this, keeping in mind that I’m focused on the WILLINGNESS and ABILITY to pay.

 

I would NOT pick college kids, they are unable to pay, and I would NOT pick senior citizens, they are unwilling to pay. My client would need to have some money that’s disposable, so maybe entry-level would be appropriate. Too old and they don’t care about having a cool place. So maybe I’m looking for a person that has some disposable income, probably single and looking to build décor to impress.

Maybe that’s not perfect, but I’ve atleast developed what most would call a Customer Avatar, or A User Story. I think those sound nerdy. I just call it a sketch, cause I use drawings, pens and markers. Call it what you want, but do it. <Hint: We’ll cover Customer Avatars again really soon!>

Demand comes from addressing a problem. I haven’t done that yet. So let’s look at what this customer sketch “needs;” the left side of the drawing.

Young, single, with extra income, our client needs to WOW someone when they enter. They need to present themselves well, and they need to maintain that they are probably sophisticated, educated, and have a little bit of personality. Why?

I would venture to say for attention. But since I can’t come up with the answers except to guess, what’s my next move?

Why Demand is Elusive for 99% of Business

Since all I can do is guess about the needs of the ideal client that I have, I will need to discover if there is in fact a need at all before I get into this business. The only way to do that is to take the time to ask. I can search online, I can find places where my sketches hang out, I can find friends that fit my market, and just ask questions. If you’re looking for a jumping off point of what to ask, here’s two questions that you can spin to this type of inquiry.

 

The bottom line to this approach is that you take the time to really sort out if the business has any merit. Would you spend $600 on all kinds of pots and pans and skillets and spices if you didn’t know how to cook? Probably not, but people have that approach to business ALL the time.

Maybe you’re not at an idea yet. If that’s the case, you can start here:

Here’s a great list from SideHustleNation of 79 ideas.

Ramit Sethi talks about this concept of idea generation SUPER well.

But I emplore you to NOT do what most people do!!

Skip the business cards, skip the marketing website and flyers and facebook page. Just focus on the one principle of demand: Do people want it? Use a cheatcode, find out before you do your business, and save yourself time and money.

Any business that’s going to be successful needs a “who.” What I mean by this is that you need to know your audience. Can you change it later, yes, but when you’re starting to narrow down what you can do to earn, it’s important that you know WHO WOULD BUY.  When you talk to someone and they mention the word demand, from now on, I want you to say this to yourself:

 

Demand Equals the WHO that will buy, and the WHY they will buy.

 

Work on your sketch as you build your Side-Stream, and even if you have one already, and you’ll start to see trends in things you might have missed.

 

Describe your Who? What does your client sketch look like?

 

Download the worksheet here and get started!

Who am I selling to Image