ABC Good Money Week 3 Get 3 Paying Clients Main Segment

Over the past couple of weeks, we've been talking a lot about ways to earn more by identifying skills that can bring in some extra cash and putting them into practice. So after you identify your skill, what's next? Well, we hear about the importance of having a solid plan before moving forward. But where do we begin? Here with some answers is ABC personal finance contributor and author of I Will Teach youh to Be Rich. Ramit Sethi. He joins me from San Francisco. Hi there, Ramit. Great to see you again.

Good to be here.

So Ramit, we've talked a little bit about identifying your money making idea. Let's say I've done that, I have my idea in hand and I'm ready to go for it. What do I do?

Well, actually, what should you not do is the first question I like to ask. You know, we hear experts telling us start a blog, create a Twitter account, get business cards and none of those things will help you make money. If you have an idea, the only thing you need to worry about when it comes to earning money is to identify who your customers are and what they are willing to pay you to do.

So Ramit, you think all of those things, the blog, the business cards, are they just a waste of time, complete.

Waste of time for 94, 99% of people. What they need to do is focus on who's going to pay them money for services. You know, we've been talking over the last few weeks about things like taking your idea, whether you are a designer, whether you're a project manager, dog walker, whatever it may be. And you don't want to just focus on starting these things that won't directly pay you, focus on getting the clients. That's what matters.

So you think people that get caught up in making the business cards and starting the blog and putting up the website, all of that stuff, you think it just makes them feel better, like, feel like a legitimate business owner?

Yes, absolutely. Look, I have a website with over 300,000 readers a month. I've been doing it for six years. And people don't just come to the website and rain money down. That's not how it works. It takes years if you want to do a website. If I were starting a business today, what would I do? I would go out and find those clients. And even though it doesn't feel as deliberate as starting a website, you know that you're going to be making a lot more in a month or two.

All right, so loud and clear. The first order of business is to be get is to get our first client, is that right?

Yep. Your first. Actually, I like to say your first three clients. Because your first client, it could be your mom, it could be your sister, your friend. You know, you get them just to give you a little bit of money to validate your service. But what you really want to do is get three. When you have three, you know that it's not a fluke. You know that you're actually getting people who don't know you, who value your service enough to pay for it. And then, you know you're on the right track.

You mentioned mom, but then you said, you know, we want some strangers, so we don't want those three to be friends and family, right?

That's correct.

So how do we get the word out then? How do we get those three paying clients that we have no contact with?

Okay, so you want to. In order to get these clients you to want, you need to understand them. Now I'm going to just give you an example. Let's say that you are really good at interior decorating, right? You know how to put a place together, you know how to use furniture. It looks beautiful. So you want to figure out how to turn that skill into income. What I would do is I would start off by talking to some of my friends and say, hey, I'm thinking of starting this idea. You know, you recently moved into a new place. How was that? Was it painful? Were there any things that you didn't like doing? Would you ever consider paying someone to help you? All of a sudden now you've got ideas, now you're speaking their language. And now, you know, you have clues on how you can turn your skill into income.

So how should we approach answering these questions that you propose?

So these, these questions are the ones that are generated by, you know, these people. They're saying like, oh, I don't know, I'm thinking about this, I'm thinking about that. What I would suggest is first starting off and saying like, who am I targeting? So I'm going to ask you a question, Tanya. Let's say that you are that interior decorator. You're really good. You think you can earn some money or who do you think your customer is?

Hmm. Well, I would say maybe newlyweds who are moving into their first apartment and have no idea how to integrate the. His. Her furniture that's coming in.

Beautiful. That is a great. So that's a great idea. That might be one. Another one might be, let's say a 40 year old, 40 to 50 year old mother, right? Who's really busy, works somewhere and just moved into a new house. She needs it to be decorated. She wants it to look good. She doesn't have time. So either one of those are great. Now you know who you're going after. And now you can start speaking their language because those two audiences speak very different languages.

Okay, so now that we know who our customer is, how do we go about finding solutions to their specific problem?

Yep. So you want to know, first of all, where are these people hanging out? And I'm going to give you three ideas, three ideas for where you could reach these people. One is just friends and family. Like, you might say, you know, tanya, hey, like, I have some friends. Do you know any newlyweds who are moving into a new place? So you'd be surprised how many referrals you get that way. 2. Craigslist. Anytime I'm looking for something, I need some help. Sometimes I'll post an ad on Craigslist and I get a flood of responses. And then this is a third one. This is a little bit different. You can actually, if you know a community center or you know something that's going on with newlyweds, like a newlywed event, you could throw a little free talk saying how to decorate your first home, and all of a sudden they're coming to you instead of you having to go to them.

And so I think I'm beginning to get. Get the feel of it here. I'm getting the gist of it. So you want to be with your pitch as specific as possible. You want to say, you know, are you newlyweds and you can't figure out how to integrate his ratty couch with your floral wallpaper? Come and I'll show you that.

That's exactly right. And that is going to speak exactly to that newlywed audience, which. Whereas the 40 to 50 year old mother, it's not going to speak to her at all. That's good. You want to be as specific as possible.

Got it. I got it. So now it's all about learning to communicate with these people who will then become your clients, hopefully.

Exactly. Exactly. Because in your customer research phase, you learned what they want. Now you can speak their language.

Okay, so once you've got those three clients, then you feel like this has confirmed that you're on the right track.

Exactly. Once you got three, you know, it's not a fluke. You know, there's something going on here.

And.

And then you can expand, you can raise your rates, you can get more customers, and all of a sudden, you know, a Lot of my students are earning hundreds or even thousands of dollars a month doing exactly this in this block.

Ramit is going to answer some questions sent in to us from our viewers. Ramit, thanks for sticking around. Our first question comes from Chris. He writes, my freelancing consulting idea is to teach the financially uninformed. What I know is that there is a need for this help. What I am looking for is suggestions on how to reach those people. How can I find the people looking or not even looking for help? Any suggestions?

This is a tough one, and I have to be honest with you. You don't want, if your goal is to make money, you don't want to go after people who don't want your services. So I happen to know, having served lots of people who are financially uninformed, it's difficult to reach them if they don't want. And I use this back of the napkin technique, I call it the pay certainty technique. You ask yourself, does my audience have the ability and willingness to pay? And for people who are financially uninformed, they don't have the ability, they don't have any money. Probably. And willingness. Maybe, Maybe not. Probably not. What I would suggest is just tweaking it a little bit, saying, maybe I'll go after people who have a little bit more money, they're more financially secure, but they have a problem like they want to raise their credit score. That would be a more palatable way to go about your freelancing idea.

So his idea, which is kind of to get people who maybe don't even know that they need the help. The help, there isn't any market for that. People who might say, oh, you know what, I didn't realize that I was looking for this, but this is exactly what I need.

No, unfortunately not. I mean, you want to do it as a hobby, that's great. You want to do it as a volunteer service, that's great. But if you want to do it for business, there's no market.

All right. The bottom line, I love it. You always bring it back to the bottom line. Our next question is from Mazarin, who says, I am a professional fundraiser and my specific customer is someone who needs money for their cause. My opening line in an email them, do you need more money for your nonprofit? What do you think, Ramit? It's to the point. I mean, what nonprofit doesn't need more money?

Yeah, I like it. I like the pitch. I think she should try it out again before. I've cautioned that going after nonprofits can be tough because they don't always have the funding, but there are some nonprofits that do, and they're looking to even raise more fundraising. So if you can reach those people, it can be good. Just be cautious because you want to go after the market that has the ability to pay you. What?

Well, that's what I was going to say. I mean, the definition of nonprofit is they don't have a lot of money to spend on extra. So can you ever really make a lot of money serving nonprofits? I mean, obviously you can feel good about it, but if making money is your goal.

Good. Exactly. If making money is your goal, I would probably take those skills. I would test that with nonprofits a little bit. My guess is she's not going to find too much success. And then I would say, who else is trying to raise money? Let me go help them.

Right. All right, Great. Help Ramit there. Our third question comes from Eric in Bethlehem, Pennsylvania, and he writes in saying, I know my target market is married, aged 40 to 60, making 70 to 100,000 a year, but how do I effectively communicate with enough of them to fill the funnel to qualify them? I am a part time financial coach, so I'm fairly sure you can relate. Can you relate, Ramit?

I love this. This person clearly knows their audience. Eric, good job. You know who you're going after. And I can totally relate. What I would suggest is talk to them. Say, like, what are your biggest challenges at this income level? At this age level, they have very specific challenges such as retirement planning or college planning. Those are the things where you could offer a free course and say, hey, come take the free course or take it online. And then you get their phone number and you follow up and say, is there anything I can do to help? That is a very, very nice freelancing business.

You know, Ramit, this Target audience age 40 to 60 is not really the audience that's going to be online much. A little bit, you know, depending on the lower end. So where would you. Would you just go out and burn a little shoe leather and meet people in your neighborhood? Is that what you would suggest?

Yeah, I mean, like, where do these people hang out? Are they at a church group? Are they at a community group? Could you partner with that community person and say, hey, you've got these people coming. I can offer them a valuable service. Why don't you let me offer a free course? It's value added to the people who are 40 to 60. They would love this stuff. So if your material is good, everyone's going to be Glad that you're offering it.

Alright, sounds good. Sounds like he actually does have a good plan. All right, now our last question is from Jen who says my specific customer is someone who wants whole fresh foods and superior nutrition for their dog. One way I can break in is to email my old client base with contest info for new home cooked prepared food for their dogs. I would love any feedback you have, Ramit. Do you think in this economy that there's a huge market for this kind of a thing?

I love this idea. Let me first ask you, Tanya, do you have any pets?

I have two cats, yes.

Okay. All right. So pet owners are absolutely nuts about their pets. They'll spend anything on it. Okay. Especially dog owners. So, I mean, pets are a multi billion dollar industry. I think it's a great idea because not only is she thinking about pet owners, but they're thinking about specific, you know, health conscious pet owners. So I don't think that you need to run a contest. I think what you need to do is get on the phone with a few of these people, say, what are your biggest challenges when it comes to your pet? Maybe keeping them healthy, feeding them, right, whatever it is, and then say, how can I take my skills and serve that need? That is a great market.

So you think, go for it. You think it's even. Even in a down economy, people who are in crazy love with their pets will spend lots of money on them.

Doubtedly you can look at the numbers and see that pet owners spend in down economies. Up economies, it doesn't matter. They are totally irrational and weird about their pets. God bless them.

Do you have a dog, Ramit?

No, I don't have a dog. I get in trouble when I have my theories on pet owners. So I'm gonna stay out of this one.

All right, thanks so much, Ramit for joining us today.

Thank you.

And if you have any financial questions, remember you can go to our website. Take out a pen. It's abcnews.com business. You can ask Ramit or any of our personal finance experts all your questions. We'll try to answer them right here on the show.