There are many different ways to earn money beyond charging an hourly fee. This is a sampler that will hopefully get you thinking.
What’s wrong with hourly work?
- Your potential income is limited by the number of hours in a day.
- You have to keep working day after day, year after year.
- You get no return for each hour of work beyond what you are paid.
- To earn more, you have to charge more, which becomes impractical unless you can build enough expertise and fame to support higher fees.
This is what most self-employed creative service providers do, until they burn out or figure out a different way of working.
Streamlined Service Packages
I pay you $60. You work 30 minutes, because you have created a system that allows you to implement $60 worth of work in 30 minutes. As a customer I am happy because I got my $60 value.
How to do it:
- Figure out a particular type of client that has a particular set of needs.
- Create (or find) a tool or system that you can implement for each of this type of customer that will meet or exceed most of those needs.
- Customize it for each customer (add value).
- Charge a flat fee for each project, rather than an hourly rate. (Price on value rather than on the number of hours you work).
- Each time you do a project with your system, use it as an opportunity to refine it and add value, so you can charge more next time.
- In my web design business, I created a website back-end for small e-commerce sites. I customized the front-end for each one, and I dropped in the new design each time.
- If you don’t want to create your own, you can sometimes re-brand other peoples. Search for “white label software” or “rebranded software” on Google. You will need to add value to it through support, design, consultation, etc.
Product + Automated Delivery
I pay you $30 for an ebook you wrote. You worked for a month to write it and get it up on your website. But you work 0 minutes for each sale, because the payment and delivery is set up automatically. After the break-even point for your time, all sales are profit.
How to do it:
- Turn some of your creative intelligence into a packaged product that you can sell.
- Automate the delivery of this product to reduce overhead.
- Ebooks are a popular idea right now because they involve very little overhead to produce or distribute. (They still require marketing of course).
- Photography: selling your photos through a stock photo site and getting a royalty every time an image sells.
- Write a book, or make a CD and get royalties from each sale.
- Set up a online retail storefront but automate fulfillment through drop shipping or similar solutions. Amazon offers order fulfillment services now—they will stock and ship your products for you.
Recurring Income Model
I pay you $10 a month to provide an ongoing service. You work 10 minutes the first month setting up my account. I ask you a short question once every 6 months or so that takes you 2 minutes to answer. Over time, you build up a client base of around 500 customers also paying you $10 every month. You make $5000 a month and spend 2 hours a day setting up accounts and answering questions.
How to do it:
- Find a product or service people have to buy every month or year. Try to find ones with minimal recurring work to go with it. For instance, most of my web hosting customers, once they are set up, have few questions. However, I do have to support them in an ongoing capacity and make sure the servers are well maintained.
- Outsource or hire people to do the recurring work (like support), making sure it is cost-effective.
- Create or install automated systems to make billing and support more efficient.
- A classic example of this is rental income: buy a property, charge rent, and hire a property management company to interface with the tenants. You have to make sure the rent covers the costs for it to be generating income. If not, it could still be a good way to build capital (equity). Read the book Rich Dad, Poor Dad for more on this strategy.
- Create a popular website and sell advertising on a monthly or yearly basis. Read problogger.net for lots of advice on this.
- Resell a service that is related to your normal offerings. That’s how I started with web hosting: reselling it to my web design customers. Many online services offer this option. They sell you the service wholesale and you resell it to your customers at a higher price and pocket the markup. Search for “reseller” or “white-label” services. For example, if you offered a newsletter writing or development service, you could resell a system that lets people send out their email newsletters. Choose a good company as your recommendation reflects on you.
I click on a link on your website to a product you recommend, and I buy it. You earn $5 from the sale. You put work into the site, and as your traffic grows, your income grows. It makes money even on those days you do no work at all.
How to do it:
- Figure out what products you can promote to your customers or readers that offer a commission and that your customers would credibly trust you to recommend.
- Put links to these products or services on your website with your recommendation.
- I linked to/recommend the following things on my web design website:
- I have a hobby site about beading where I link to a beading magazine, several bead stores, and many bead books and beading supplies from Amazon.
I pay you $60 to attend a 4-hour workshop. Forty people attend. You make $2400. You have worked 4 hours giving it, 6 hours preparing it, and 8 hours promoting it, which averages out to $133/hour. Although that’s not much more than your hourly rate, each time you deliver it you will spend less time preparing, increasing your margin.
While this isn’t necessarily great income directly (although it can be depending on your pricing), it can help your income efforts if you leverage the information you create into products, blog posts, etc.
Bringing it all together
Ideally you will be creating a product and service ecosystem where each offering feeds the other. You use your workshop notes as part of your new ebook, and the rest as keyword-rich content for your website, attracting more search engine traffic. Your workshop participants end up buying more ebooks and booking private sessions. All your efforts indirectly support other areas of your business. This also provides many different ways for customers to engage with your material in a way each person is comfortable with.