When people ask me what the best ways to make money are, sometimes I laugh.
Not because the question is stupid — but because, well, there really is no “right” answer.
The real answer is almost anything can make money (which I talk about extensively in my book).
The first thing you have to do is change your mindset. You have to start viewing your skills and experiences as bankable resources.
You have to stop underestimating your ability to help someone with what you can provide — whether that’s information, a service or a physical product.
When you’re first getting started making money on your own, the best way to get started quickly is to understand the different ways you can make money, and which one will work best for you.
Generally speaking, there are 3 ways to make money:
- Providing a service to someone
- Providing information (really a subset of services)
- Selling a product
All 3 of these can be very lucrative — it just depends on what type of business you’re most comfortable with, and what type of work you want to do.
Today, we’re only going to talk about providing a service. This is also known as freelancing.
This is typically the first place that beginning entrepreneurs start, because it’s something you can begin immediately based on the experience you already have — and it’s very simple to plan.
This is the maxim of starting a new service-based business:
If you currently have (or have ever had) a job, you’re capable of providing a service that someone will pay for.
In fact, for many people, the skills you’re already providing to your current employer can used directly to start your freelance business.
- If you’re an administrative assistant, there’s a good chance your organizational skills will be useful to clients.
- If you’re a web developer, you can definitely help people build projects on the side.
- If you’re an accountant, you can help clients with their taxes, or small businesses with their accounts.
Now, not every job can translate directly into a freelance skill — but most can give you an indication of where your strengths are. For instance:
- If you’re a veterinary technician by day, you can’t necessarily take care of sick cats at your house. But since you love animals, and are good with them, maybe you can open up a side business as a pet sitter!
- If you work in IT, maybe you can start managing client websites/doing sysadmin work, etc.
The main issue most beginners have here is underestimating the value of their services. I did the same thing when I was first starting my business as a test prep coach.
The company who hired me way paying $18/hour for me to go to houses and teach SAT/ACT exam prep. I thought this was GREAT money…
(isn’t it funny how we judge what fair pay is based on how much more it is than minimum wage, not on how much money we actually need to live?)
One day, I was at a student’s house and saw a brochure for the company I was working with on the fridge. I took a quick peek inside and I realized that the parents were paying $100/hour for me to be there! And I was only getting $18 of that!!
I was a little upset at first, but then, I realized this was actually a great thing.
I was doing all the driving, teaching and consulting.
The company’s only real task was connecting me with the families — and these families had validated that the service I was providing them was worth at least $100/hour.
That validation gave me the confidence to go out on my own and start finding clients.
How to set up your first freelance business
First, take an inventory of your skills.
What are you currently doing now that someone is paying you for? Could that same service you’re providing a large company be offered to individual clients?
Next, what are people paying for the services you provide?
IMPORTANT: The true value of your services isn’t how much a company pays you directly (your salary/hourly rate) — it’s how much they charge other people for you to deliver those services. The cost to the end user is your true value.
If you’re a paralegal that gets paid about $30/hour to do pre-litigation work and settle cases, then how much are the clients paying the firm for your work? I’d guess the firm probably bills clients at least $150/hour for you to handle this on their behalf.
So now you know that you your time is worth at least $150/hour. The firm is just taking $120 of it from you as a “finder’s fee.” Hmm…seems pretty steep, don’t you think?
Could you take those exact same skills and make money by yourself? One way that comes to mind is divorce filings. The process is expensive (can cost hundreds or even thousands to file), but in reality, most paralegals know how to do this work.
Could you open up an “express” business to offer this very specific service for a better rate? There’s clearly a never-ending market for it!! (And God, are they willing to pay!)
Next, you’ll want to start finding clients. This is where most people bang their heads again the wall and give up.
Here’s a quick video I made on the topic:
LOOK….finding clients is not that hard.
Here’s the truth: After your freelance business has been established for a few months and you’ve had happy, successful clients, you’re going to start getting referrals. If you leverage them right, and do your job, the referrals will become your primary source of business.
You won’t need to spend a ton of money on marketing. You’ll have repeat business. You’ll get word-of-mouth clientele.
So your job in the beginning is to just give your business the initial “spark” it needs to get out there in the market and gain some visibility.
I have two methods that I use to do this:
1.) The Marsupial Method
What does a baby kangaroo do? He hides his mother’s pouch and stays warm and safe until he’s ready to venture out on his own.
Sweet life, bro.
When you’re first launching your freelance business, you can do the same by finding other businesses that already work with your ideal customer and forming partnerships with them to bring you an instant client base.
- If you’re a personal trainer, you can partner with local apartment complexes who have gyms to host classes for residents.
- If you’re a web developer, you can partner with graphic designers to help their clients build websites.
- If you’re an algebra tutor, you can partner with local schools and after school programs to help their students.
The possibilities are endless — and you have to be willing to think outside of the box to see make some of these connections work.
2.) Freelance Websites
Look, some people don’t like these websites because they say it’s impossible to find work with everyone bidding over the same jobs. Or they say that the rates aren’t good enough to justify the time.
Not having a good day, Mr. Silk?
Both of these ideas are false.
First things first — websites like Elance are great tools. And they are fantastic starting points. You shouldn’t think of them as “forever” solutions to finding clients and growing your business.
But they do provide some powerful advantages for the beginning freelancer:
- They help you become comfortable with the idea of selling your services, tweaking your offer and understanding what clients are looking for.
- They help you refine your pitch
- They build confidence by helping you get over the fear of rejection — and the initial feeling of success, even if you only book a few small jobs.
Now, the questions: How do you stand out in these crowded marketplaces…and can you actually make money?
Yes and yes.