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.
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?”
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.
$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).
You can check out Jesse Gernigin's blog at www.livegoldrich.com.
Do you have a side hustle? Why or why not? Have you ever raised your rates?
Subscribe to get the free Master Your Money course!
Join the free email course and finally learn how to manage your money better, pay off debt, save more money, and reach financial freedom. Get our newsletter and get access to the freebie: