Hello everyone! Today, I have a great post from a fellow blogger. Enjoy this post and enjoy your weekend!
Hello MakingSenseofCents readers. I am Jesse Gernigin. I am a St. Louis native and an earning strategy coach. I run a blog at LiveGoldRich where I share how I overcame debt and made money with side hustles.
I started my journey in 2008. I graduated college with over $30,000 in student loan debt, $8423.00 in credit card debt and $3500.00 in loans on my car.
I had nothing. I had no money, no prospects and no idea about what to do.
My main option was to stay the course. I couldn’t do it. The 9-5 work lifestyle didn’t fit what I wanted out of life. I wanted the freedom to travel. I loved back packing and crashing in eccentric AirBnbs. I had to make a decision. We were in a recession. Corporate America was cutting excess spending which meant employees were no longer safe. Jobs were no longer guaranteed.
Student loan debt was guaranteed.
I decided if I was going to go broke I would do it on my terms. I went to work for myself as a comedy stage hypnotist. I had performed during college and I had enough repeat clients that when I added all their checks together they would cover one year of bills. I took the leap. I built a client list and started marketing. Money was tight the first year. I made enough to pay my bills and not be broke. I even moved home with my dad. It was hard that first year. My friends bought starter homes and pulled sixty hour work weeks. I lived in my childhood bedroom and entertained high school kids. I wasn’t ashamed.
I loved what I was doing but after a year I was tired of surviving paycheck to paycheck. I needed to grow. I needed more clients but that was only a short term solution. Entertainment, like any service oriented business, is time dependent. You can only take so many clients and do so many shows. To earn more I needed to increase my sales to my existing client base. It wasn’t easy for me. I had a scarcity mindset. I didn’t understand customers would want my services at higher prices. I also fell into a cycle of self-limiting beliefs. Peers had told me:
- There wasn’t money in entertainment
- Clients didn’t want to pay for quality
- Customers would abandon you for cheaper entertainers
I let other people limit my beliefs.
That stopped me from succeeding. That next year I decided to make a change.
The first year I offered clients one service. I sold a one hour show. When I realized I needed to tap existing customers for more sales I branched out. I created upsells. I bought recording equipment off Ebay. I recorded audio programs to help people quit smoking, beat stress, etc. I sold these programs at shows. People loved them and wanted me to create live seminars. I started selling weight loss and smoking cessation programs before my main show.
I helped people quit smoking and lose weight, and my income grew. Once I had doubled my income I raised my show rate. Seventy percent of my clients dropped me. I wasn’t upset. The clients that remained were better clients. My referrals became better. To earn more I didn’t need more customers. No. To earn more I needed to offer more to better customers.
How can you apply this to your side hustle? “I’m not a stage hypnotist.” You say.
That’s fine. Every side hustler can increase their income (enough so that most side hustle’s can become full time businesses).
Customers want to spend money with you.
Remember that. Developing a good relationship with customers opens them to spending more with you. This isn’t true of all customers. There will always be price shoppers. Don’t compete for their business. You’ll end up working for them instead of yourself. The cheaper a customer the more they will ask of you. Build a strong foundation of good clients.
Case Study
I got my first coaching students through a mutual friend. We had gone out to drink and he introduced me to a couple. They owned a Cross Fit gym and felt stuck. They wanted to increase their income so they could quit their jobs. To do this they said they needed to make an extra $66,400 a year. They didn’t have the money to expand. They thought the only way to make more money was to increase enrollment. The only way they could do that was expanding into the unit next to them. The bank wouldn’t give them a loan. They were at a loss for what they could do.
I told them that their gym didn’t need new customers. Their membership numbers were good. I asked,
“What was the shortest length any member had been a member?”
“Eight months.”
I nearly fell out of my chair. That was an amazing retention rate. They had thirty members who paid $135.00 a month and the newest member had been there for eight months.
Price Breakdown:
$135 a member x 30 members meant they made $4050 a month.
They were leaving A TON of money on the table. I told them. They didn’t need new customers. They had great customers. They were making $48,600 a year running a side business.
“You want to make more?” I asked. They nodded. They wanted to increase their earnings enough with the gym so they could quit their day jobs.
“How much do you need to make if both you quit your jobs?” I asked them. “$115,000.” They said. That meant they would have to increase their earnings 136%. I told them I could do it for them if they hired me. They agreed and I created a three part process for them to follow. The three part process I am about to share can be applied to any side hustle to increase income and secure future customers.
Part 1: Raise your rates:
I told my client to raise their rates. To reach their goal they needed to make an extra $184 per customer, per month. If they raised membership dues $30 a month that would get them an extra $10,800 a year. They undervalued their service because they had a scarcity mindset. Just like me they were afraid of losing clients. Their fear was unfounded. I explained to them that they had an amazing retention rate and that they would lose no more than 5 members. I was wrong. They lost NONE. This led to,
Part 2: Increase value: offer more services:
I told my clients they could raise their rates and keep their customers. They had to offer more services through the gym (they called it a ‘Box’). I told them they would benefit by offering more services: and to charge for those services. Customers value the opinions of people they have a relationship with. Don’t believe me? Look around at how many celebrities, writers, musicians and bloggers have their own monthly subscription service they support. Quarterly has so many people creating subscription boxes that they had to build a genre search button into their website.
Customers value your insight and knowledge. Offer high quality extra services or products that fill customer needs. The gym owners decided to create meal plans, offer health management classes and sale personal coaching sessions. A third of their members expressed interest. Their clients started buying meal plans and bringing non-cross fitters to the health management classes. They wanted their friends and family to be healthy to. This leads to,
Part 3: Tap clients for future income and referrals:
Happy customers become ongoing customers. In my stage hypnosis business the clients that liked my services continued to book me year after year. I expanded operations and services because I knew I had a base income every year (creating an ongoing cycle of growth and expansion between Part 2 and Part 3).
Giving awesome service keeps clients coming back. The gym owners discovered an untouched pool of money when members brought friends and family who would have never been cross fitters to the health classes. The gym owners increased their outreach with-out taking more members.
“Happy customers are your best promotion.”
You can tap happy customers for testimonials, bring them to networking events to sing your praises and they can send you their friends, family and co-workers. You funnel these referrals into the three part system and eventually you will be busy enough to follow your passion into full time earning and dream building.
The gym owners ended up meeting their goals. They were able to quit their jobs and eventually they quit cross fit altogether to start a health product and teaching company. Now we see each other once a year in Portland while we travel between gigs. You can live this way. For more information on how to earn more and live your dream check out these links (insert links to your favorite income earning articles on your blog).
Do you have a side hustle? Why or why not? Have you ever raised your rates?
Jesse Gernigin says
Don’t make the mistake of waiting for the perfect moment. The best side hustle is one that is small enough to adapt as you go.
Vivian says
Great point Jesse. If we wait to do something when the moment is right time will pass us by. Now is the right time to do something if you’re going to do anything at all. Live in the moment!!!
Jesse Gernigin says
Good call Vivian. Success is a footpath not a point on the map.
Erin @ Erin's Inside Job says
Thanks for sharing this! I am at a real crossroads in my life right now and I know this is the direction I want to go but I let fear and self doubt hold me back. The more things I read, the more confidence I get to be able to take those steps 🙂
Jesse Gernigin says
Don’t wait for that moment of inspiration, it’ll never be enough. Just start. Starting gets all the buggy stuff out of the way in a few days. In the Side Hustle world there is one thought to hold on to, work begets work.
Will @ Phroogal says
I’ve heard this from a lot of successful people… we often overestimate the amount of people interested in our services but we often underestimate the amount they will be willing to pay.
Smart move getting more $ out of your existing client base.
Hypnotism is awesome, btw! 🙂
Jesse Gernigin says
Thanks Will! Hypnosis has always been a fun side hustle and it is a great way to scale up services. I can do shows, fundraisers, take clients, sell product, do seminars, enter in a home party model, etc. I learned all about scaling and sideways growth through it.
As for overestimating the amount of people interested in your service don’t limit your belief about how many people are interested. I do a lot of drip marketing for my Hypnosis business. I send out 1,000 lead generation postcards 14 times during the school year. Every school needs my services but they might not be getting the card at a time where it makes sense for them. IF you aren’t handling assemblies in September it doesn’t mean you won’t in March.
There is always a market, and the markets (even when niched down) can be very large. Think about the last time you went to a grocery store. There is a ton of stuff you don’t buy. Does that mean you don’t need it or will never buy it? No. It just meant you didn’t need it right then. Never limit your pool of interested people!
Jason Butler says
Wow. That three part process is great. I need to figure out how I can use that when it comes to my side hustles.
Jesse Gernigin says
I’d pick one side hustle that you have really systematized. Once you’ve identified it then go through the 3 step process. The hardest thing people do is ask for more money. An increase in cost is something people have a hard time letting go of. If that isn’t your first play then i’d suggest finding a place where you can add value then uncharge for it. That is the path of least resistance which leads to later growth.
Brittney @ Life On A Discount says
Great points about customer referrals! I work in marketing and a referral from a friend/family member is the most valuable thing in our business. It’s often untapped in a lot of ways.
Regarding side hustles, I worked two this past year and brought in an extra $3,000. I worked with a consultant on the weekends to do powerpoints/computer work and then did tutoring. I am discontinuing it now that I got a recent promotion and my hours are increasing, but luckily my pay is going up 25% as well. So I am cutting back on side hustles for the time being.
Jesse gernigin says
Good thinking. The hardest part of a side hustle is learning to validate your time.
Jayson @ Monster Piggy Bank says
The moment I got my first pay from my side hustle, I wanted more. And, I looked for more and got more in-demand skills so that I could raise my rate. I am glad that I did.
Jesse gernigin says
Awesome! Earning more brings you closer to financial freedom an once that ball gets rolling it’s amazing to see how far it can go!
Alexandra @ Real Simple Finances says
This is great, Jesse. Existing customers are often overlooked as fantastic sources of income. After all, if they like you and appreciate your value they will pay for it!
I absolutely love your original side hustle. I saw a comedy hypnotist for the first time two years ago, and bought a few of her CDs for home use. They are so relaxing.
Jesse gernigin says
I’m glad you enjoyed the hypnotist. The shows are a blast. Existing customers get overlooked by side hustlers. I don’t know why. You work so hard to initiate those relationships why not keep monetizing them?
Kelby says
As someone who is new to side hustling, it’s hard enough for me to set prices – let alone increase them. Your steps make it easy to get past that mental roadblock and start increasing the bottom line. Thanks for sharing!
Jesse Gernigin says
The thing to remember is that ‘No’ isn’t the end. My fast start advice is always the same, ‘Ask for money right away.’ That means you need to find a way to start charging right away and getting responses. Noah Kagan talks about setting challenges to get started. Maybe that would benefit you? Just don’t hem and haw. The faster you get to something the sooner you are in it.
Dr. Penny Pincher says
I think my readers are price-sensitive by nature, since they want to learn about penny pinching! I do think there is potential to offer high value information products, some people want to all of their information for free on the internet, but the “better customers” may be willing to pay for the right kind of information or services. Thanks for getting me thinking about this…
Jesse Gernigin says
You have to know your market, no doubt. I wouldn’t waste time trying to convince someone who is interested in the savings ten cent coupons brings them. Side Hustle success is about repeatability and scale. Can you scale your service, cost, product if your customer is fretting about $4.95? No you can’t. If I was you i’d carve out a niche within your mailing list of people interested in deeper dives and bigger scores. Then I would tailor a product to fit those needs and charge for it. I make more selling coaching than information products, same thinking.