Editor’s note: The following is a guest post by Ramit Sethi, author of the New York Times bestseller I Will Teach You To Be Rich and founder of the personal finance blog I Will Teach You To Be Rich. Take it away, Ramit . . .
How do you take your skills and turn them into something that people will pay for? Let's say you have a full-time job as a project manager or salesperson or software engineer. How can that help make you $200/month, $500/month, or even $5,000/month on the side?
My goal is not to have you start earning money immediately after reading this post — even though we all love 1-2-3 steps, earning more successfully is much more complicated than that. But we can get started on the first steps of identifying what you want and matching your skills to the market in order to turn them into income.
Step 1: Set Your Goal
Too many people jump into the tactics of earning more money without understanding why they're doing what they're doing. If you can spend a little time planning — and still continue executing — you can save hundreds of hours of missteps.
Here's a simple rule: If you want to start freelancing because you want to earn extra money, identify a profitable market first, then adapt your services to it. However, if you want to freelance because you want to take your passions and turn them into side income, first create your services that are based on your passions, then identify a profitable market. Do you see the difference? Keep reading for a closer look at this case.
Let's say Jack wants to earn an extra $1,000/month because he wants to pay down credit-card debt. His first goal is to generate income. He should figure out the most profitable market that matches with his skills and pursue it relentlessly.
Jack is a customer-support rep for his fulltime job, so he looks outside to the market to see where he can generate income with his skills. He reads lots of mid-size bloggers via his RSS reader, and he realizes they might need help editing their email newsletters (such as iwillteachyoutoberich). He gets in touch about a paid freelance job and lands two clients in a month. He's now generating an extra $500 each month. Since Jack cares about generating income first, and his passions second, he simply found an easy market that would help him earn more immediately.
By contrast, Mary is passionate about jewelry. She feels like she has a lot to teach other women about accessorizing the right way. Since she already knows she wants to earn income in the jewelry field, she spends her time researching different services she can offer that people will pay for. Will she help jewelry makers appear at trunk shows? Will she be the trusted jewelry specialist who delivers to high-end clients? Or can she be a jewelry specialist who handles return or customer-service calls? We don't know what will be profitable yet — but Mary will find out via rapid experimentation.
Remember: Whenever possible, start with your goals, then let the tactics (How should I reach customers? How much should I charge? What software should I use?) follow after.
Step 2: Match Your Skills to the Market
This is a simplified process to turn your skills into side income. I encourage you to try to fit the general principles here to your personal situation. Just take it one step at a time:
- What industry are you in? Let's say you're in finance. Now, you probably don't want to be a freelance investment banker. But you spend all day doing analyses. How can you use that? Example 1: Excel is a breeze to you. Maybe there are people (like me) who hate Excel yet need detailed analysis for their business. Could you build models for other people? Example 2: You're really good at doing valuations of industries. Are there pre-launch founders who need that skill?
- Identify your skills and interests — then think more broadly. The most common thing I hear is, "I'm a really good communicator…but I don't know how to turn that into a side income." That's because you can't. Nobody hires a "good communicator." They hire people to solve their problems. Spend some time doing research on the available options you have to channel your skills into something that's worth money. Are you great at writing press releases? Are you great at training public speakers? Can speak Chinese? Boom, I'd instantly be a tutor for Chinese kids since their parents will love/trust someone who speaks Chinese — even when tutoring their kids for any subject.
- If you don't have any marketable skills, there are still options. Etsy is a perfect example of people making great side income — selling niche products to a niche audience. If you aren't some professional with software-engineering skills or online-marketing experience, that's okay. Can you hammer something into a wall? Can you cook? Can you walk dogs? Tutor kids in 4th-grade math? Help moms with routine tasks? You can make money on all of these things — good money — without some hard technical skill…as long as you find a market that will pay for them.
People have problems. They want solutions. They don't care what you're "interested" in. Are they too busy to organize their closet? Do they need someone to help them redesign their website? Maybe they want someone to teach their kid how to play flute.
When you make your offer, you'll have to deeply understand what the market — your prospective clients — want. You must get into your clients' heads. What are their fears? Hopes? What do they care about most?
Lesson learned: It's not enough to simply be good at something, whether it's freelance writing, dog walking, or graphic design. It's not just knowledge: You have to package your knowledge into something that clients can recognize as valuable. Usually this involves them making more money, saving money, or saving time.
Next week I'll go into how to get your first three clients.
Thanks for reading. If you're interested in earning more money, but don't know where to get started, I've put together a tool to help you find a profitable — and fun — freelance idea. Get your freelancing idea right here.