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How to make money online for beginners (step-by-step guide)

How to make money online for beginners (step-by-step guide)

It’s no secret that times are tough. But even in uncertain financial times, you can still make money. I’ll show you how to start earning online.

With the magic of the internet, you can easily start earning money online this very same month— through freelancing—and the best part is I’ve developed a simple step-by-step guide absolute beginners can use to start making money online

The bad news: Freelancing online is only for people who are willing to work hard and put in the time, NOT for those who just want to find a “magic bullet” to make money instead.

If you’re looking to get-rich-quick, I suggest you find another article. For everyone else, if you want to make money through freelancing, there are just a few things you need to know:

Step 1: Find your first client

To find your first client you need to know where they live.

No, I don’t mean stalk them, you creep. I mean knowing who they are and what problems they have. Ask yourself:

  • Who is my client?
  • Where do they go when they want to look for a solution to their problems?
  • Where are they ALREADY looking for solutions to their problems?
  • How can you connect them to your service?

In classic marketing terms, you’re going to want to define your target market. It’s an essential first step that, unfortunately, A LOT of people gloss over when they start making money freelancing online. If you don’t do this, you’re going to be at a loss at what exactly you’re selling and to whom you’re selling it.

 

Who EXACTLY is the type of person who might want to buy your product? Ask yourself even more specific questions now about your potential client.

  • How old are they?
  • Where do they live?
  • What are their interests?
  • How much do they make?
  • What books do they read?

You’re going to want to get into your clients’ heads in order to figure out exactly what they need so that you can provide it for them.

Then, find out where they go to find solutions. Get in their heads:

  • Want to pitch to moms that blog about children? Go to The Mom Blogs and start with the ones under “Popular Blogs.”
  • Looking for physical or massage therapists within 50 miles of your house? Yelp should get you started easily.
  • If you want to do… large dog grooming and sitting, well there’s probably a local pet store or dog park near you where owners are all congregating just waiting for you to offer them a solution.

Here are a few suggestions of some other great sites freelancers can use to find business online:

So many people email me saying things like, “But Ramit! I have this idea and have NO IDEA where to find customers!” My response is always calm, yet you know that anger boils closely below. “What have you done to research your audience? Have you emailed a few people? Taken them out to lunch? Asked complementary service providers if this is a good idea?”

The answer is almost always no.

An example that made me angry: Last night, someone said they were going to start a wedding-montage photo business. What should they do? They appeared to be stuck. Answer: Go talk to a few wedding photographers and ask them if this is a good idea. Would their customers buy it? Are there holes in the market that are not being served? What about event planners? Florists? You could do this in 1-2 weeks and save 1 year of your life.

80% of your ideas will be strengthened — or washed out — with this simple exercise. And it only takes a week or two to get started.

Get in these people’s heads & then niche it down. Read their minds and then act on those insights. So you’ve figured out where the secret large dog pet store is. Great. Now look at their website, visit the store, talk to the owner. GET OFF YOUR ASS AND TAKE ACTION.

Could you pitch one potential client each morning? You probably could if you created an email template (more on that in a bit). How about 10 over the weekend, playing with different headlines/offers so you can see which ones work better?

It doesn’t have to take a long time, and it doesn’t have to be agonizing.

Bonus: Ready to start a business that boosts your income and flexibility, but not sure where to start? Download my Free List of 30 Proven Business Ideas to get started today (without even leaving your couch).

Step 2: Make your offer

After you niche down your offering and find a few good leads, you’ll need to craft a pitch that is tailored to them.

In doing so, you’ll want to stress the BENEFITS of working with you — while not giving away too much information as to how you’ll help. I lost my fair share of clients while I was starting out by giving away exactly how I’d help them in my initial reach out. Stupid.

Since I’m such a benevolent and generous person, I’m going to let you in on the exact 5-line email template I’ve used to craft the perfect pitch to potential clients. It includes:

  1. The introduction. You’re going to want to build rapport by introducing yourself and how you know about the client.
  2. The offer. Talk about them. What do you want to do for them? Why are you good for that role? You’re going to want to do some research on the organization to see what they need help with.
  3. The benefit. Walk them through how your work will benefit their company. Are you going to free up more time for them? Are you going to maximize profits by X amount?
  4. The foot-in-the-door. This is a classic technique that utilizes an old psychology trick to get the client to agree to a small agreement so you can ask for a larger agreement later.
  5. The call to action. Be clear with this and ask them if they would like to proceed. The call to action is a critical part of this script.

When it’s all put together, it’ll look something like this:

CLIENT’S NAME,

[Introduction] I read your article about X and noticed that you’ve recently started using videos on your website.

[The offer] I’ve been doing video editing for three years and I’d like to offer to help you edit your videos and get them optimized for the web.

[The benefit] That would make them look more professional and load faster, which is important for your readers. And you’d free up time that you could use to create new content.

[The foot-in-the-door] We can discuss the details, of course, but first I wanted to see if this is something you might be interested in.

[The call to action] If so, would it be okay if I sent you a few ideas on how to help?

Best,

Ramit Sethi

And that’s it. What I love the most about this email is the fact that there’s zero fat on it. Each word here has earned its place and carries a weight with it. That’s what you want out of a good email.

If you don’t hear back from them after a week, you should send a follow-up email. After all, life happens. Your email might have gotten lost or they might have seen it, meant to reply, and simply forgotten about it. If that happens, here’s a good template for a follow-up email.

CLIENT’S NAME,

I just wanted to follow up with the email I sent you last week regarding my offer.

If you have any questions or concerns, I’d be happy to address them.

Best,

Ramit Sethi

Once again, the message is simple — but it allows you to go back to the top of their inbox, and therefore, to the front of their minds.

Step 3: Know what to charge

This is where the HUGE majority of people get tripped up when freelancing for the first time…and I don’t blame you if you do too. There’s no exact science on what to charge and so much of it is guesswork until you land on the right price for you.

What you should focus on, though, is your pricing model — of which, there are a few to choose from:

  • Hourly. Most of us have had a job like this before. You charge an hourly rate and your client pays you per hour. The benefit for the client is that they mitigate their risk since they can just stop paying you whenever they want if they’re dissatisfied. This benefits you because there are many industry standards on what normal hourly rates for your job are.
  • By project. For this, you’ll be paid per project. So say, if a client wants you to illustrate their e-book, you’ll know exactly what you’re getting paid for for the entire project with more concrete deliverables for them.
  • By retainer. This allows the client to have access to you at any given time during a month. Usually, you’ll be paid on retainer if you’re incredibly integral to the company.
  • Commission/Bonus. This payment model can work in conjunction with all of the other ones and can provide a healthy incentive for you to get your work done. For instance, if your client promises you a $1,000 bonus for attaining X amount of leads with your landing pages.
  • Value-based. As the name suggests, this payment model is based on the amount of value you’re giving the company. For example, if you promise to write a sales page you know will generate $200,000 in revenue for the client, you can negotiate for them to pay you $15,000 for it.

Though all of the above pricing models are perfectly fine to use when freelancing, I highly suggest you get paid by the hour when starting out. After all, you’re a beginner freelancer. Clients are going to be wary of you and won’t be inclined to pay you a big project fee. If you charge by the hour, they feel safer knowing they can stop paying you whenever they want. It’s just much simpler.

Of course, as you progress in your freelance career and attain more clients, you’ll be able to embrace the whole gamut of pricing models as you see fit. But it’s just simpler to stick with charging by hour at first.

When it comes to exactly how much you should charge at first, there’s no right answer. Luckily, though, there are a few handy back-of-the-napkin tricks you can use to find a rough estimate of what you should be charging. They are:

  1. Drop Three Zeros MethodSimply take your ideal (read: realistic) salary, drop three zeroes from it, and voila, you have your hourly rate!For example, say you’d really like to earn at least $40,000. Just take the three zeroes from the end and you now have your rate: $40/hour.
  2. Double your “resentment number”I love this one because it’s both really interesting and effective. Ask yourself: What’s the lowest rate you’ll work for that’ll leave you resentful of your work?Say you’ll work for $15/hour at the VERY LEAST. Just double that number so now you’ll earn $30/hour.
  3. Do what the next guy doesGo to Google and search for the average hourly rate for whatever service you’re providing. You’ll get a good sense of where to start when you’re charging your clients.

The best part is after you start charging your clients, you can start to take on more or less work until you earn the amount you want.

For example, after you earn your first $1,000 it’s incredibly easy to start dialing your prices up and charge even more money from your clients.

This is called the Tuner Strategy. Start “tuning” your rates after your first few clients. Were you making $30/hour? Start charging $40 or even $50. There’s no hard and set rule for how much you should charge. Just start tuning until you find a rate you’re happy with.

Investing in yourself

Remember: it’s okay to make mistakes. Especially when you’re just starting out. The important thing is that you get started and learn from those mistakes.

Now, one thing that you will find very common with people who have not taken the time to invest in learning how this stuff works, is they will create what’s called levels of abstraction.

Rather than just going directly to what they want, they will create all these different levels of abstraction — like making a Facebook page or a blog — that make them feel good, but that actually don’t require them to do the hard work.

Once you’ve found a place to get clients and have an email that gets responses, keep iterating on it until you are constantly getting new clients. This is what separates winning freelancers from losers. Losers wait for the perfect client to fall from the sky. Winners start somewhere, then improve their pitch bit by bit.

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