Updated: Feb 28
Note: throughout this post I refer to both product and service businesses as “products” because when you are selling a service, you are the product. Hope you enjoy! With the new year rolling around, everyone has things they plan to do in the future. Would you like to achieve a specific fitness goal? Or, perhaps receive an academic achievement? While all of these are good things, they require funding. How do you plan on paying for that gym membership or your next course? Starting your own business may be the perfect way to achieve all of those goals, and add some $$ to your wallet as well! So, how do you do that? Well, I currently own and operate a guitar lessons business which earns me an extra $1,000-$1,200 dollars a month while working around 10-12 hours a week. Now that's not a bad deal! I get to do all of my own scheduling, and I am able to have freedom when I want to take time off. This article is dedicated to showing you all the things I have done to get to this point, so please give it a read and then comment with any questions you may have!
Starting A Business
A key thing to realize is that everyone has marketable abilities. Some of us are capable of a specific craft, whether that is designing websites, playing an instrument, or building a product. Others are capable of performing tasks like house sitting, lawn mowing, or dog walking. Any and all of these ideas are capable of making money. It just takes a person who is willing to put the effort in to make a new business.
Around two-and-a-half years ago I was working at a coffee and bagel shop while doing school work full-time. For a mere $7 an hour I had to serve customers by making sandwiches and brewing coffee. On top of all this, I had to wear a uniform that I disliked. All of this contributed to my next step. I began to teach guitar lessons. At the time I had been playing guitar for nearly 9 years and I had experience in a number of genres like rock, jazz, country, and blues. With this ability, I decided to invest in some books and to start teaching other people. After only a few months of lessons, I had attained a few students (more on that later) and was able to quit my coffee-making career. That leads me to today, where after setting a goal of 15 weekly students two years ago I have finally accomplished that goal. And I have news for you: you can accomplish your business goals too. Perhaps with the tips that follow, you may be able to meet them even more quickly than I did!
Step One: Define your product
There is nothing more important than having a clear image of what you want to do. This definition should be posted proudly everywhere you advertise your business. For me, my slogan is “Donnie’s Guitar Lessons: Learn To Play The Right Way”. A statement like this tells your audience what you are selling and why they should buy your product over someone else’s. In this case, if they choose someone else, how will they know they are being taught the right way? Planting this seed in their mind can help you be both more memorable and attractive than your competitors. Define your target demographic For most people like me, in the beginning your target will be anyone who is willing to buy your product, which is totally fine. But notice the customers who you prefer to work with. Who is buying your product; are they dependable? Will they make other purchases? Do you enjoy working with them? By answering these questions you can define your market clearly. For me, my market has radically changed since I began teaching. At first, I began by teaching a younger kid I knew who showed interest in guitar. To this day he has been one of my most successful students. However, as I gained more clients I found that, in general, adults (30-65+) were much more reliable, generous financially, and easy to work with. Nowadays, I still work with kids 10+ but the majority of my students are greater than 30 years old. This development has affected my marketing strategy and altered the way I work with people. Have a clear set of terms Whenever I get a new student they receive a clear message that tells them my cancellation and rescheduling policies, and the penalties that they will encounter if they do not comply with them. Obviously, the straightforward terms are cushioned by some good-natured compliments. Here is exactly what each of my new students receives:
Not only does this make sure that you and your client are on the same page, it provides you legal security and helps protect your profits. Every new business person should have some sort of agreement like this. Whether it is written with regard to returns and refunds or other pertinent policies, make sure that you have your bases covered. Examine the pros and cons of setting up a business checking account
Since I started teaching lessons, I have always used my personal checking account to hold my earnings and make business purchases. While this can definitely work, having a separate account and then paying yourself on a regular basis can make everything a lot easier. Instead of getting all of your finances mixed in with each other, having separate ecosystems for personal and business expenses will benefit you, especially when tax time rolls around. NOTE: Always put away at least 10-15% of your earnings to pay taxes, because of the self-employment tax in some states you may have to pay more taxes than you expect. Use a budget
This point really cannot be emphasized enough. Having a clear budget is essential to managing all of your finances. Without a solid financial plan, how do you expect to make money? For a great online budgeting program, check out YNAB (you get a free month of YNAB if you sign up through this link).
Step Two: Sell your product
Now that you have a product, terms, and a potential audience, it is time to start generating sales. Gotta make some money, right? Now all you have to do is figure out how you are going to reach your customers. Easy-peasy... Choose your “home base” All of my lesson booking is completed through my affiliate link: www.takelessons.com/with/donnie. Through that website, students can buy lessons, view my schedule, watch my videos, and much more. When a student books lessons using that link, they take 7.9% of the price of each lesson and I get paid the rest. If a student finds me through the normal Takelessons website then they take a greater percentage of the earnings. Many websites are dedicated to making your life easier and will do so for a relatively small fee. Takelessons helps me by handling all of the scheduling and payments necessary to run my business. Additionally, they send me text messages so I’m never late for a lesson. Whether your “home base” is a website like Takelessons or just your own personal SquareSpace site, make sure that it provides all the details necessary get customers in contact with you. Establish a presence on marketing websites The easiest (and one of the cheapest) ways to begin advertising is online. Make sure that you have a good-looking Google Business profile, a Facebook page, and you may even consider posting on sites like Craigslist. Just by listing yourself of these websites can add to your brand recognition. Besides those rather obvious basics, check out Thumbtack if you provide a service (use that link to get $16 in free credit upon signup). Last week I added 2 new students to my roster through Thumbtack alone! (Quick tip: when Thumbtack sends quotes for you using Instant Match, make sure you send a follow-up message and try to get a phone call with them. Your success rate will skyrocket if you are at the right place, at the right time, and find the right customer.) There are numerous other sites that you can use to market your product, I have also dabbled in running Facebook ad campaigns along with Google Adwords Express. In my case, Facebook seemed to generate more leads than Google, however I would recommend trying both of them for a few days to see what gets the word out better. But to be completely honest, I think posting regularly in FB groups has helped me gain more students than when I paid for Facebook or Google to run my ads. The more personal the connection you can make with the customer, the better.
Step Three: Make Money
Don’t be afraid to charge $$ Of all the things I have found that really surprised me during this process, this was one of the most compelling. When I first started out, I was charging $10 a 1/2 hour lesson (AND I was traveling to their home). It had not been long before I realized that between travel time, gas, and actual working time I was not making enough money for it to be worthwhile. In my city, most teachers charge between $16.50-$18.50 per 1/2 hour. With that in mind, I raised my price to $12, then to $15, and finally to $16. What I realized is that bargain customers are often the hardest to work with. Not only are they difficult to keep on a regular schedule, they also don’t stick around as long. The funny thing is, now that I charge $16, I have more students than ever before! Figure out what the industry standard pricing is for your product and focus more on competing with quality rather than quantity. That leads us to the next point, make a product that is clearly better than everyone else’s. Offer the best product - and make sure potential customers know it. To say that you offer the highest quality is one thing, but proving that you have the best product is another. Do this by gathering as many reviews as possible. Currently, my Takelessons profile shows that I have 21 ratings with a 5-star average. Many of my students have left written reviews that help me to figure out what I am doing right or wrong. Establishing a solid reputation is the best marketing possible. Realize that your product does not need to be original Guitar lessons is not anything new. There are literally thousands (if not millions) of guitar teachers just like me. Or are they? Just because the particular service you offer is not anything new does not mean that you are unable to do it with your personal touch. In any market, you are selling yourself just as much as you are selling your product. If the customer has (or believes they will have) a better experience with you than your competitors, they are much more likely to choose your product. Make sure you are smart with your money Over the last four months I have been investing in an Acorns account (free $5 bonus to get you started! Use this link to sign up). With the economy on the rise since Trump’s election, it’s easy to make free money! While it may not seem like much, since I began investing I have earned a 3.23% return on my investment. That is way more than you will make in any savings account! Start small and gradually increase the amount that you invest over time. Before you know it you’ll have a few hundred dollars saved up!
Conclusion - Take Heart!
Building a business is a long and arduous journey but it can have a big payoff in the future. There have been many weeks (some that occurred this last summer!) where I have made as little as $50 a week while doing lessons. The good news is, I have had other weeks where I have made around $350! Money ebbs and flows even if you have done all of the other things in this article; realize that there will be good times and bad times. The best thing you can do with non-billable time is improve your product so that you can make it billable in the future. Continuously improve your product and make sure everyone knows what you’re doing! Now that you have been equipped with the tools necessary to succeed, go forth and conquer! Written by Donnie Emmack