Finding the right money-making idea
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In our research of over 5,000 people, we found that the #1 barrier to making more money was, by a huge margin, finding the right idea. If you’re like me, it can get frustrating to have 0 ideas — or too many! — and not know where to start. Today, I’ll cover several frameworks to generate and test profitable ideas to make money that you can implement today.
Recently, one of my readers, Barbara S., made a very interesting comment that highlighted why many people can’t find a money-making idea that’s actually profitable:
“Many of the people who focus on the “save” half of things do so because when they focus on earning, the things that come to mind are so little that saving actually does measure up better.
For instance: I have an ongoing freelance gig that brings in over $1,000 per month. Because it sometimes results in a long day, I have no problem doing the work over a sandwich rather than working and then cooking. $10 meal versus $300 session of work.
The friends who find this wasteful aren’t thinking of that scenario. They’re thinking about doing a $15 an hour shift someplace: $45. So, they’d rather cook at home and save the $10 than earn $45.
It makes perfect sense. If you’re not sure how to make more money with the skills you already have, and the only ideas that come to mind will generate a paltry $50/month, why would you try to earn money?
Here’s the kicker, though: I’m not talking about a crappy $50/month. I’m talking about $1,000+.
Today, I want to challenge the notion that you should “look for an idea” to make more money.
Instead, I’ll show you the first step of identifying, testing, iterating, and validating your ideas to virtually guarantee that you’ll make more money to live a richer life.
Freelancing is the easiest business to make more money with right NOW
Let’s first cover a few stipulations. For delusional people, these will crush their kooky dreams of living a passive-income lifestyle with no work. But for people who are serious about earning money — and who realize that to earn money passively, you have to start out doing work actively (just like I’ve done) — this is what you need to know.
- Out of the 3 primary ways to earn money, the easiest way to earn money on the side is to start a freelance business, meaning you take your skills and turn them into direct income. It costs virtually nothing to get started, you can start earning money right away, and you can rapidly test and refine what you offer to earn even more.
For this reason, freelancing will be the main focus of my strategies for earning more, but note that you can (and many, many of my students HAVE) applied these lessons to other productizing or to increase salary at their regular jobs.
(Productizing is unrealistic for most people who are starting out since it involves both the critical aspects of freelancing, as well as an entirely separate set of skills.)
- MOST jobs can translate directly into freelance work and EVERY job implies skills that can transfer to indirectly to related freelancing jobs.
But there are a small percentage of professions that can’t: For example, you don’t see any freelance cardiothoracic surgeons. (But you can see some doctors moving in that direction.)
- People worry about the time involved, but this is really just an excuse to do nothing. Do you think successful people say, “Waa…if I start earning money, I’ll have too much work, and I don’t know if I want that…”? Of course not. They know that the real problem is getting any money at all, not getting too much.
Since you’ll be making money on the side, you can control exactly how much time you put in. There are proven ways to minimize the time you spend so you can hit your target goals. Finally, it’s FUN to earn more, not drudgery.
- Just like dating, it will probably take repeated failures to find a good match between your skills and what the market wants.
Please re-read that last point about repeated failures.
This is probably the most important fact to keep in mind as you’re working through ideas that can make you money. I personally keep a “Failures” tag in Gmail where, if I’m not getting at least 5 failures/month, I know I’m not doing enough.
What are your real skills, and how can you turn them into something that other people will pay for? Let’s say you have a full-time job as a project manager or salesperson or translator. How can turn what you already know how to do into $200/month, $500/month, or even $5,000/month in side income?
Making more money is about creating a process to rapidly find, test, and develop a series of ideas until you find the right idea that’s profitable.
Of course it’s difficult. It’s supposed to be hard!
Trying to make money by setting up a Facebook page is a waste of time
Most people waste time on things that will never produce a cent of income.
If your goal is $1,000+/month, here are the biggest wastes of time:
- Setting up a Twitter account
- Setting up a Facebook page
- Setting up a blog
- Buying business cards
- Getting a business license
- Doing anything backoffice-related
This angers a lot of cranky unsuccessful businesspeople, mostly because they see themselves in the above and wonder why they’re “still” not earning money — even though “they’ve done everything they can.”
Yes, they’ve done everything they can.
EVERYTHING EXCEPT TALKING TO SOME GODDAMNED PROSPECTS.
It’s so much easier to set up a useless Twitter/FB page than talking to actual people about their actual needs, isn’t it? I swear to god, if I hear another person complaining about business, yet they haven’t done any customer research, I’m going to drink 40 gallons of water, take a barrel into a sauna, sit in it, and drown myself in my own sweat. What the hell is wrong with these people?
None of the above things will get you paying customers.
In fact, they will distract you from what you really need to be doing, which is identifying needs of potential customers, talking to them, and validating (or invalidating) your ideas. I have a guy who works with me who has NO website, yet he is killer at understanding what his clients (aka me) need. I paid him $10,000+ last month.
Because it’s hard, the rewards of making more money are large.
How to Become A Freelancer
Making more money by learning how to become a freelancer is not some simple 1-2-3 checklist, which is what most people want: A one-size-fits-all solution that they can “set and forget” and then magically start earning more money.
Here’s the good news, though: Because it’s so challenging, the rewards for earning more are likewise extraordinary. That’s because 90%+ of ordinary people will simply go away and play XBox at this step, leaving those who rose to the challenge to collect the lion’s share of the rewards.
You’ve been warned — if you expect this to be easy, or if YOU’RE one of those people looking for the one-size-fits-all, then just go away.
If you expect a set of guaranteed money-making business ideas to be painstakingly tailored to your situation, go away.
But, if you’re ready to step up and really change your finances in the second half of 2010, then I can help you get there.
With that, let’s get started on the first steps of examining your skills and finding your $1,000 idea.
The two major problems for people trying to find a money-making idea
There are two major areas of finding an idea where people break down.
- They can’t identify an idea at all
- They have too many ideas and don’t know where to get started
Let’s break these down.
#1 Barrier to Making Money: “I don’t have an idea at all”
This one is common. Here’s a hint: Most people think only of themselves and what they’ll pay for. And since most people are cheapskates, they think that nobody will pay for anything.
Wrong: Go walk in a mall or at a local market. People pay 5x for organic beets at a farmer’s market. They pay $5,000+ for weird-looking art. And they pay virtually anything for their kids and pets.
People pay for value (Walmart). They pay for convenience (housecleaner). They pay for simplicity (Apple). They pay for motivation (personal trainer) — even though they “could” technically work out on their own.
The question is:
What can you offer that they’ll pay for? And how can you find out?
No let’s look at the second major failing in finding a profitable money-making idea.
#2 Barrier to Making Money: “I have too many ideas and I’m overwhelmed”
Having too many ideas can be just as paralyzing as having no ideas.
A comment from last week:
My other hesitation is with ideas. I have over 10 ideas that recirculate through my head on a weekly basis (i’m an Aries, it’s normal.) Some I have put into practice and then let slide, while others never got finish or started. How does a person like me stick to one idea? Or is there a way to use all my ideas in one business?
First of all, are you seriously telling me your horoscope when it comes to building a process for making more money?
Anyway, see if this sounds familiar. You’ve spent all day thinking through your 50 competing ideas for earning more money. You could be a chef! You could create iPhone apps! What about a website? Maybe teaching music. By 9pm you’ve run a mental marathon, yet you have nothing to show for it. You’ve reached analysis paralysis, where your quest for finding the “perfect” freelance idea (by thinking and analyzing the idea but not doing it) keeps you frozen at step 0.
Then, even if we get past this initial paralysis, we can end up spending so much time building up an idea — naming the idea, designing business cards for the idea, putting up a website and figuring out exactly how to describe it to our friends — that when we forget the most critical part: seeing if there’s actually a paying market for that offering. After all that work, it’s easy to give up, exhausted and frustrated. I’m getting frustrated right now writing this and I’m contemplating violence.
Remember, just like in the dating world, you probably won’t find your right match the first time, second time, or even the 5th time. That’s where MOST people give up. Instead, I want you to think about building your idea generation system to test, measure, and refine until your idea is earning you your first $1,000 on the side.
The ‘right’ money-making idea meets 4 key criteria
What constitutes the ‘right’ idea for freelancing? There are literally thousands of ‘right’ freelancing ideas out there, but here are 4 key criteria that every viable idea has to meet:
Viable Idea Criteria #1: Showcases your skills
Your money-making idea needs to match what you can do with skills you currently have. Skills are tangible, countable abilities that you’ve acquired through experiences on the job, in school, or elsewhere. And listen, stop short-changing yourself. You HAVE skills. Are you really good at math? (Did you know I once hired a math tutor and paid him a lot of money?) Can you play a musical instrument? Are you really good at interior design? Are you in shape? There are a million skills you have, but we overlook things about ourselves all the time. Except for me, because I am incredibly narcissistic.
Find your skills: What are all the specific things you could list on your resume?
Examples of skills:
• Personal training
• Ad sales
• Video editing
Viable Idea Criteria #2: Showcases your strengths
Your money-making idea needs to showcase what you’re best at. Strengths are intangible qualities that you have a natural affinity for that make you stand out from the next person with your skill set. This is typically what college kids often cite in place of real experience and, while I like to mock it, these actually matter. For example, I know a woman who openly said she never wants to talk to customers — her strength is working behind a computer and that’s what she likes. Great! Be brutally honest. You might be really good at building systems, or turning complex ideas into actionable insights.
Find your strengths: What are the qualities that have gotten you the most praise on the job or in school, or that have made you feel the most ‘in the zone?’
Examples of strengths:
• Developing rapport with others quickly
• Managing multiple people and projects
• Organizing data into actionable information
• Teaching other people new ideas
Viable Idea Criteria #3: Matches your interests
Your money-making idea needs to match what you like to do. Interests are the things you love to do, and not just on the job.
Find your interests: What do you read or research in your spare time? Magazines? Blogs? TV shows? What fascinates you most? A good example that my friend Ben always mentions is, “What do you read on a Saturday morning?”
Examples of interests:
• American politics
• Live music
• Online gaming
• Street fashion
Viable Idea Criteria #4: Has an actual market
There’s an actual market for your idea, meaning there are people who will pay you for your service. A market only exists if there are real people — that you can pinpoint, reach, and validate BEFORE you start offering a service — who are willing to pay you for your service.
Ok, please read this carefully because too many delusional weirdos get this wrong.
The above skills, strengths, and interests were important, but they are also relatively easy since you can look inward and knock out the answers in 5 minutes. So when someone comes to me and says, “EUREKA!!! I AM GOING TO EARN $5,000+/MONTH KNITTING COLORED BUTTONS ON FLANNEL SHIRTS BECAUSE I AM REALLY GOOD AT KNITTING!!!” I carefully nod, turn away, vomit in my mouth, and call my assistant to immediately ban them from ever joining my Earn1k program.
How can you determine if there’s a market for your idea? Two quick tests:
1. Check for supply: Is there anyone else offering your service?
Now, a lot of people I know will actually get depressed when they notice there’s someone ‘already doing’ their idea. The competition makes them shrink away like a white guy in a spelling bee. This is the opposite of how I see it. When I see a healthy range of providers for an idea, it tells me there’s very likely a decent market for that offering. It’s good news — not something to shy away from. Since most people are terrible (see The Craigslist Penis Effect), with some ingenuity you can crush them.
2. Check for demand: Is there anyone out there looking for your service?
DO NOT OVERLOOK THIS OR YOU WILL BE DOOMED TO FAILURE AND I WILL CURSE YOU.
Have you ever seen a job posting or help wanted ad for the service you’re thinking of providing? On Craigslist, other jobs sites, or even via word of mouth? These are clear signs of demand in the marketplace for your idea, and that’s also very good news.
Every one of my Earn1k students knows that that MUST validate the demand of their idea.
In other words, if you think that you can do marketing for local restaurants, you had BETTER interview 15+ restaurant owners to see if they:
- care about your idea,
- value it,
- use the same words you do to describe their problem, and
- will pay you for it.
If you have no demand, you have no business — end of story.
Do your potential customers have the ABILITY and WILLINGNESS to pay?
Your market must have the ability and willingness to pay. And some people and groups are markedly bad markets. Let’s take a look at 3 examples.
- For example, if your idea is to offer services to non-profits (let’s say grant-writing), you might as well give up now. That is because most non-profits have neither the ability (they have no money) nor the willingness (because they are cheap and short-sighted) to pay, even though technically it would improve their organization.
- If your goal is to sell some video-game service to kids, think again. While they may have the willingness to pay, they generally don’t have the ability.
- And the CLASSIC CLASSIC bad idea is, “Let me sell to mom and pop shops/restaurants/businesses” and help them create a website/do marketing/etc. While local businesses have the ABILITY to pay, they don’t have a willingness to pay, mostly because small-business people are often treading water and, in the words of a coffee-shop owner where I write, “too busy to do marketing.” Yes, it’s irrational and dumb, but it’s TRUE. Do not pursue markets where people are not willing and able to pay you.
Should you pursue your passion or your income goals?
People love talking about passion. Your should be passionate about your job! Travel around the world for passion. Be a passionate lover. Eat your meals passionately.
Guess what I get passionate about (besides teaching)? WINNING. Too many people use “passion” as a crutch to do nothing. But as Cal Newport puts it, passion happens when you master something:
“…passion is the feeling generated by mastery. It doesn’t exist outside of serious hard work. When Scott’s readers say “I have too many passions,” what they really mean is “I have lots of superficial interests.” When my readers complain that their major is not their passion, what they really mean to say is “I don’t have a level of mastery in this field that is earning me recognition.”
We all know that uncle who has many passions, but never actually did anything, and is waiting for his magical idea to come…
Pick an idea, and begin testing it. If it doesn’t work out, your system will let you accommodate another idea. Trust me, you get pretty passionate when you start dominating.
Here are a few examples of ideas that were rigorously tested and found to be profitable.
- Music teacher: I have a student who is earning thousands of dollars per month after taking Earn1k. She teaches violin to young students. Why? Think carefully. Who is her market? Think deeper — it’s not really the students. And is she targeting everyone? People in a geographic area? People of a certain income? People of a certain racial/ethnic group? What would you do?
- Personal organizer: I know a young woman who cleans her room EVERY DAY. SHE LOVES IT. I find it really weird. Yet I would totally hire her to set up an organization system for my house. And so would TONS of other people, especially…who? What group can you think of that has an ability and willingness to pay for this service? Does gender matter? Age? Location? What do people REALLY want (hint: it’s not just a clean house…it’s much deeper).
- Interior designer: I recently hired an interior designer for a project. I auditioned 5 people on Craigslist and picked her. Why? Even though I technically “could” do it myself, why would I spend thousands of dollars to have someone else do a project for me?
The 2 major takeaways are these:
- Your job does NOT have to be where you get your brilliant freelancing idea. Your job CAN shed light on your best skills and strengths, even if it doesn’t speak to your interests. For example, my friend is a high school history teacher by day, but a kids’ party entertainer on the side. Although his side job is pretty different from his day job, both pull from the same skill set and personal strengths. He’s great in front of groups of younger people, is energetic and organized, and can effectively direct their attention to whatever he needs them to focus on. Combining skills, strengths and interest to start generating income is NEVER a cookie-cutter formula (be wary if someone’s trying to tell you it is). Instead, it’s a process that requires intelligence and critical guidance. If a high school teacher can earn $1,000 on the side being a party entertainer, what could you do?
- Your job skills CAN be transferred, no matter how unique you think your job is. So you’re a horse whisperer in Wyoming. Wow, unique job! Not really. You have skills in working with animals, obviously, which would suggest training pets. But you also have expertise in behavioral change, which many academic labs and companies would love to tap — and pay for. You can tutor children, or lead a summer camp. You can train people’s cats to use the toilets (real example from my friend who used to work with horses and now works with cats). And tons of other different options. You work as a claims adjuster for an insurance company? I bet you have a ridiculous level of attention to detail. How could you position that? What group of people needs a project manager or meticulous proofreader?
You can do this. But it requires a mindset change: Instead of waiting for something to come to you, you have to AGGRESSIVELY interrogate your assumptions and test them to see what (1) you’re interested in, and more importantly, (2) what your market is interested in and will pay for.
Get past “Waah…I don’t have any ideas” (or “I have too many ideas”). Don’t simply say, “I’m a software localization specialist! Nobody hires freelance software localization specialists. I give up” (wipes face with tears and becomes a troll on blog comments of every single newspaper site online). Instead, ask yourself: “What do I enjoy? What am I good at? And, how can I position this so people will pay for it?”
There are thousands of monetizable skills, some of which you know how to do AND are good at.
This is what I want you to walk away with today: finding the $1,000 freelancing idea isn’t a lightning bolt that comes to you in the middle of the night.
It means thinking critically about your skills, which may or may not have anything to do with your full-time job, overlapping them with your strengths and interests, and then systematically testing them in the marketplace to find the offering that people will pay you for.
Now read my FREE Ultimate Guide to Making Money
I wrote a huge free guide that goes into detail about how to get started earning money on the side, how to increase your salary painlessly, and how to start an online business that makes money while you sleep.
Hundreds of thousands of people have read it and benefitted. Read it, apply the lessons and email me with your successes — I read every email.