In today's world, a single income is an antiquated idea.
Dorie Clark, adjunct professor of business administration at Duke University's Fuqua School of Business and author of the book "Entrepreneurial You", sums up the reason why multiple income streams should be the norm.
Unless your job is all-satisfying, all-consuming, or pays plenty of money, you probably have some leftover time, desires, or skills to monetize. And in today's digital world, there's simply too much opportunity out there for you to live off of just one salary.
Many people have a business idea but don't know where to start, or they've been working on a project for a while but don't know how to earn money from it.
Over the past six years, I've interviewed hundreds of founders and CEOs. The steps below outline the patterned framework I've observed people use to transform a business idea or side project into a cash flowing income stream.
Idea-to-Income: The 5 Steps
The phases are sequential, but you can start at any point (i.e., you don't have to start at phase 1, and you'll often shuffle between phases).
1. Idea - Think of a thing
Coming up with the right business idea dupes people. Anybody new to entrepreneurship will say it's all about the idea. It's not. "Ideas are just a multiplier of execution," writes Derek Sivers, blogging entrepreneur and speaker. Sivers is just one of many seasoned founders and investors who will tell you the common mantra in the startup world:
"Ideas are worthless, execution is everything."
Nevertheless, how do you know when you have the right business idea, or at least one worth pursuing?
The single most effective way to come up with a business idea is to solve a problem. For yourself, or someone else. It could be a personal pain (e.g., razors are a pain to shop for, or I can't walk my dog while I'm at work), a systematic problem (e.g., I want to invest but I'm not an accredited investor), or a missing preference or convenience (e.g., why are there no gourmet salad shops in this town?). Start with solving a problem.
Also, you can be thinking about an idea for weeks, months, or even years. Author Stephen King said he knows he has a good idea for his next thriller when it sticks in his mind for over six months. If you've had an idea brewing for a while, it's time to take it to the next phase.
2. Project - Create the thing
The project phase is where most of us get stuck. In this step, you bring the idea to life. Whether it's code, carpentry, or culinary, a project is a created idea. It can take ages to materialize a product vision. Examples of projects could be an app, a book, an art piece, a service company, real estate, or an event.
For me, I published a novel, launched an app, and now I'm working on an online course. I'm a project nerd.
Whatever you choose, make sure you leverage the incredible technology available to speed up this phase.
3. Test - Make the thing better
In this phase, your project is nearly complete and it's time to begin putting the project into the hands of real people. This testing phase can be scary; you're finally releasing your brainchild into the public wild. But it should result in good feedback and lead to overall improvement. The end goal is called "product-market fit", something entrepreneurs and investors treasure. Product-market fit happens when the right product reaches the right audience. For example, if you sell crucifixes in a town of atheists, you'll go nowhere fast. But if you cell crucifixes in a town of Catholics, you'll do better. This is the principle of product-market fit at work.
Similarly, your testing will help you hone, tweak, and pivot your project as needed to find something that people want to pay you for.
4. Business Model - Charge money for the thing
Once your project is perfected through testing, it's time to come up with a way to make money from it. Many people fumble when it comes to setting the price for their product. They charge too little. They think, this hand-knit scarf isn't like Patagonia's so I should charge less.
There's no formula for setting the "right" price. However, the following two basic principles of economics will help you understand why you should charge more than you think.
Also, it's much easier to lower your prices after launching your product than it is to higher them.
5. Growth - Get the word out about the thing
Your website is built. Your storefront is open. Your booth is set up. Your business cards are in your pocket. Now it's time to scale. As much as creators hate to do it, this stage is all about sales and marketing. Think about the story of your product. Your story. What is something you believe in that your customers can get behind?
Tom's shoes, Chick-fil-A, Starbucks, and Geico are all brands that offer common things: shoes, chicken sandwiches, coffee, and insurance. But their storytelling differentiates them from the competition. Once you figure out your business's most compelling story, the most powerful type of marketing will flow from it: word of mouth. Word of mouth is when people understand and love the story of your product so much, they must share it with other people. The key to growth is a remarkable story.
You may have one idea, no idea, or a notebook full of them. The first step begins with clarity. So wherever you're at, use this guide to map out next steps. Internet marketer and author Seth Godin said, "Ideas die in secret." Don't let your ideas rot in your head. And don't abandon your projects half-baked. Use these steps to turn your idea into an income stream starting today.
Finally, if you don't know where to start, send me a tweet with your scenario and I'll respond with more specific directions.