Do you know what’s the most common reason people don’t start their own business? No, it’s not because they don’t have the time. And it’s not because they don’t have the money. It’s because they don’t have a system in place to start—and maintain—their business. In this post we’ll tell you how to take hobbies that make money and turn them into businesses.
And below is the start of the system we used to do just that:
Question #1: What money-making skills do you have?
Now, what do you know — and know well? These are the skills you have that you’re great at — and people want to pay you to teach them, including things you consider hobbies.
Some examples include:
- Fluency in a foreign language
- Knowledge of a computer program like Excel or Photoshop
- Cooking ability
Write down a list of 10 of these skills. I don’t want you to hold back. Write down ANYTHING that comes to your mind and you’ll start seeing what people might want to pay you for.
For some people, this might actually be hard to do — and that’s okay. Just try and get 10 skills down.
Case study: How I used my social media skills to consult for venture capital firms
Like many of us, I know how to use YouTube, Facebook, and Instagram. So during college, I was able to turn those social media skills into consulting gigs with multiple venture capital firms who wanted to learn how young people were using consumer services on the web.
This consisted of me giving them a course each week on a different topic such as online music, videos, and social networks.
Would you have ever thought you could turn your basic everyday skills — like social media — into a consulting gig? I wouldn’t have before I landed those gigs, but people were willing to pay for it because they had concrete needs. They wanted to understand how young people were using technologies so they could remain sharp investors.
Money wasn’t an issue, but time was: They’d rather hire someone who lived it than try to learn themselves. Once I’d established that I was skilled at these services — and also created an effective structure for teaching the VCs — they hired me.
Practically any skill can be turned into a marketable product — but it’s not enough to be simply good at something. Whether it’s freelance writing, dog walking, or graphic design, you need to be able to personalize your service to a specific target market.
After all, millions of other young people knew how to use YouTube/Facebook/Flickr far better than I did. You have to be able to PACKAGE your knowledge into something your clients can recognize as valuable. That involves helping them make money, save money, or save time.
Question #2: What do your friends say you’re great at?
I love this question.
Not only can it be a nice little ego boost — but it can also be incredibly revealing.
Some examples include:
- Your friends always telling you that you cook the best meals.
- People asking you for fitness advice and gym routines.
- Your friends constantly complimenting you on how great your apartment looks.
- Everyone always commenting on how well you dress.
All of those things can be turned into successful businesses.
Go ask your friends today what they think you’re great at. I assure you that they’ll give you a big list of things right away.
Add these things to your big list. Aim for around 3 – 5 new items.
Case study: How my friends’ personal finance failures inspired me to launch this blog
I originally started IWT as a one-hour free course that I taught at Stanford. It was never designed to make money, it was just something I was good at and wanted to do.
My friends used to complain all the time about money in the dining hall. So one day I said, “Hey, you should come attend this class I put together. It’s free and takes an hour, and I’ll show you all the basics of money — banking, budgeting, saving, and investing.”
The response was VERY positive. People knew I was good with money and wanted to learn from me…
…or so I thought — because none of them EVER showed up to the class!
Over the next year-and-a-half, I struggled to have anyone show up. I’d wonder to myself, “Why am I trying so hard to give people GOOD, FREE information about stuff they want to know?” I felt like a career counselor, one of the most under-appreciated jobs in the world.
After trying all kinds of strategies to get people to attend, including emailing them to coordinate times, I switched approaches. Instead of in-person events, I launched the website you see now. That way, people could read it out of the comfort of their own dorm rooms.
Eventually, I realized that I could offer courses of my lessons and philosophies on personal finance and reach even MORE people. Not only that, but people would be willing to PAY me to teach them.
And the rest, as they say, is history.
Later, I learned why this was so successful: People don’t like attending events about money because:
- It makes them feel bad about themselves.
- The events are usually BORING and/or scammy.
- People have to publicly admit they don’t know anything about money.
It was a classic mistake of not meeting my users/clients where they were.
If people see that you’re good at something, they’re going to be willing to listen and pay you to learn more from it.
Of course, that’s not enough. You MUST get into your clients’ heads. What are their fears? Hopes? What do they care about the most? (Hint: It’s almost never how much the cost is.)
Similarly, once you get in their heads, you learn which medium will best serve your client, whether it’s an in-person event, a blog, or a course. Whatever. The way you approach your client and the way in which you sell your product matters.
Question #3: What do you do on a Saturday morning?
This question actually comes courtesy of my friend Ben Casnocha.
He says, “When you’re trying to find a business idea, think about what you do on a Saturday morning before everyone else is awake.”
So how do you spend that morning? A few pastimes to consider:
- Are you browsing fashion websites or fitness subreddits?
- Which YouTube channels are you binge-watching?
- Maybe there’s a project you’re devoting yourself to all day.
Alternatively, ask yourself: If you were stuck in a room with a person for 3 hours, what could you talk about with them the entire time?
This is a powerful method of discerning your passion if you’re unsure — things you’ll love to share with the world.
When you’re finished writing your 15-20 ideas down, you’re well on your way to finding a successful business idea. They don’t all have to be good — but try and get them all down so you have a good place to start.
Case study: How Brian turned his video hobby into a business — and doubled his rates
One of my former students, Brian, LOVED filmmaking — but halfway through film school, he realized that he had no idea how he could turn his hobby into a business. He knew a lot about the technical and artistic aspects of making movies, but not much about how to market those skills.
So he decided to invest in himself by joining Earn1K, my course on freelancing and earning money on the side.
By the third week of Earn1K, Brian had distilled his hobby down to a marketable product: high-end wedding videos. He also set two goals:
- Book three weddings and have one of them be from a couple he didn’t know.
- Earn enough to pay for a new camera (about $1,200).
“At the beginning, I was pretty much giving the videos away,” he recalls. “One was free. A couple was $450. By the end of the first season, clients were paying $1,000 for each video. I saw that I was giving people valuable material. They weren’t paying just to help me out. That meant a lot. They really wanted what I was offering.”
Brian minimized his risk by proving the validity of his idea before investing a lot of money into it. He shot his first three weddings with rented or borrowed cameras and he didn’t even put up a website.
By the end of that first summer, he booked six clients — and THREE of them were people he didn’t know before. He eventually bought his camera and started planning for next years’ wedding season.
Now with over two seasons under his belt, Brian has a better sense of how many weddings he’ll need to book each year to make his business sustainable. He also knows how to turn his hobby into a skill he can market.
“Nobody else is a full-time wedding videographer in my area,” he says. “There are some people doing commercial and real estate video. But for now, I’m sticking with weddings and doing it better than anyone else. My clients appreciate that, and it makes it simpler for me.”
Brian was able to take his passion — filmmaking — and “niche” it down into a specific marketable skill (i.e. high-end wedding videos).
Ultimately, he transformed it into a successful side hustle that’s now earning him thousands of dollars in just a few hours.
See more about how to charge what you’re worth in this talk I gave at a conference a few years back:
The golden rule of freelancing
At this point, some of you already jumped 50 questions ahead:
- “But what if I’m not sure what I’m good at?”
- “An online course? But I don’t have a website/traffic.”
- “What kind of software should I use for…”
Part of trusting the system is focusing on ONE step at a time, not jumping ahead.
For now, I want you to know that YES — you have passions and experiences in you that people will pay for. Even if you’re not yet the world’s expert on them!
But I don’t want you to start jumping into tactics without understanding why you’re doing what you’re doing. To be honest, I did that with IWT at first, so I know.
Don’t get me wrong: It’s better to do something WRONG than to do nothing at all. But if you can spend a little time planning — and still continue executing — you can save hundreds of hours of missteps.
With that, I want you to keep this simple rule about freelancing in mind:
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 a side income, first create your services that are based on your passions, then identify a profitable market.
Do you see a difference?
Example: Jack wants to earn money
Let’s say Jack wants to earn an extra $1,000/month because he wants to pay down credit-card debt and propose to his girlfriend after he’s debt-free. Great! His first goal, then, is to generate income.
As a simple rule of thumb, he should figure out the most profitable market that matches 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, and he realizes they might need help editing their email newsletters (such as IWT). He gets in touch about a paid freelance job. Success!
Two clients in a month start 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.
Example: Mary is passionate about jewelry
By contrast, Mary is passionate about jewelry. She feels like she has a lot to teach other women about accessorizing the right way. Jewelry is her passion, so she wouldn’t want to, say, start a freelance business helping CRM companies optimize their sales funnels.
Since she already knows she wants to earn income in the jewelry field, she spends her time researching different services she can offer and create 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.
Niche down your list
So now you have your list of hobbies and skills. Congrats! You’re already doing more to earn a Rich Life than 99.9999% out there!
Once you’re done patting yourself on the back, I want you to go through each item in the list and niche it down. In fact, with each of the items on your list, think about how you can answer the question, “How can I solve people’s problems with this skill or hobby?”
Maybe you have “I’m a good communicator” on the list. Great! Unfortunately, though, no one is hiring for “good communicators.” They’re hiring people to solve their problems. What does a good communicator mean to you, anyway?
Maybe that means you’re great at writing press releases (I’d pay for that).
Maybe you’re an awesome public speaker and can train others to do the same.
Maybe you can speak Chinese — and tutor Chinese kids since their parents will love/trust someone who speaks Chinese even when tutoring their kids for any subject.
Remember Brian the filmmaker? He was able to take his broad passion for filmmaking and niche it down to producing high-end wedding videos.
Or even me! I took my skills in personal finance and niched it down to provide personal finance advice and courses through IWT.
Do that with each of the items on your list. Once you’re done, you’ll have a list of marketable services you can now turn into successful freelance businesses that’ll earn you money.
Do you know your earning potential?
Take my earning potential quiz and get a custom report based on your unique strengths, and discover how to start making extra money — in as little as an hour.