Key Principles for Turning a Side Hustle Into a 6-Figure Business
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With millions of Americans out of work, many are starting side hustles they hope can pay the bills in the short-term, and perhaps grow into a sustainable business. Entrepreneurship requires a lot of sacrifices, savvy insights and solid execution. Business owners must stay grounded so they can see reality for what it really is, and not listen to outside noise that could threaten a venture’s survival.
In the end, a business is only as good as what customers think of your product. Here are key considerations: What are people actually willing to pay? Does your product cater to impulse buyers, or is it a time-based product where urgency is involved? Will buyers pay a premium because of unique characteristics such as rush order or special features not found anywhere else?
Here are principles for scaling a startup into a larger, more successful business.
Find buyers — only then can you scale
Glenn Stearns, billionaire founder of Kind Lending and star of the reality show Undercover Billionaire, advises entrepreneurs to find buyers first. He says solopreneurs make a risky move when they spend capital to first build a product or service only to realize there’s no demand for it, which is a common way of going bankrupt.
At the start of the season, Stearns was given only $100, which he had to turn into a million-dollar business within 90 days. In the first week, the undercover billionaire slept in his truck in 17-degree weather to save cash. He would earn over $1,500 by finding industrial-grade tires for free at a landfill and selling to a ready buyer. A few days later, Stearns would earn hundreds of dollars by flipping green personal ornaments bought for 60 cents and sold for $5 each on St. Patrick’s Day.
A side hustle may not be sexy, but it’s also less risky because you’re forced to start small. Urgent expenses, like food and shelter, force an entrepreneur to get cash flow by filling an immediate need in the marketplace. Knowing a willing buyer (i.e. customer) makes it easier to generate sales. All you do is meet his/her requirements and fill the order. The buyer holds the cash you seek and represents the most immediate route to making money. A solopreneur doesn’t have to waste time on fancy business plans. You quickly assess whether you possess the capabilities to meet the customer’s specifications. If not, you move quickly to another buyer.
Hire experts to differentiate your offer
“A small business must hire experts who can create an exceptional product because marketing and sales can only do so much,” says Rasmus Mikkelsen, co-founder of PublishingLife. Rasmus founded a book publishing startup with twin brother Christian and initially earned $3,000 a month. As 20-somethings, the Mikkelsen twins now generate over $500,000 a month from their online course “Audiobook Income Academy,” which shows how to build passive-income businesses by publishing and selling books on Amazon.
“You’ve got to deliver high-quality products to customers whom you want to order repeatedly," Rasmus insists. "That keeps your revenue streams thriving.
The twins have a two-step process for exploiting Amazon’s massive traffic of internet shoppers. First, they research book topics that have high demand but low competition. That means finding what subjects Amazon’s readers are searching for online that don’t have enough published books to satisfy demand. Then they outsource by hiring exceptional writers who can deliver great content. The result is a wildly successful venture. The Mikkelsen twins satisfy a large audience by delivering high-quality books on niche topics.
“Whoever has the best product wins,” says Christian. “And you’ve got to have a long-term mindset. Not a get-rich-quick scheme.”
Understand what satisfies a customer
Houston Rockets owner Tilman Fertitta, who starred in the reality show Billion Dollar Buyer, has a simple rule for re-stocking his restaurant and casino empire: Suppliers must achieve at least an 80 percent approval rating from customers to get re-orders. The billionaire entrepreneur constantly gets customer feedback so he can continuously adjust his offerings and redesign hundreds of food and leisure establishments. He never stands still. Fertitta, who owned his first hotel by age 26, relentlessly improves his businesses and obsesses over ever-changing customer needs.
If you’re starting a new venture or trying to expand an existing one, it’s crucial to understand what motivates a consumer to purchase from your shop specifically. This, too, can bankrupt inattentive solopreneurs. If you don’t know why visitors are pulling out their wallets at your store, you won’t know how much to price your goods in order to maximize profits.
Rasmus Mikkelsen adds perspective after reaping a huge financial harvest serving Amazon shoppers: “Ninety-nine percent of people fail to turn a side hustle into a sustainable business because they never stick with anything long enough to give it a real chance to work. A successful business is a byproduct of helping people. Be passionate about helping the people you serve and income will be a natural byproduct of that.”