This post is by Michael Pollock, the original owner of Small Business Branding. Yaro Starak now owns and produces the latest content for this blog.
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As I reflect on the podcasts I’ve done this past week, several themes kept coming up in my conversations with people. One theme in particular, passive revenue products, is emerging as the central idea that fuels the thinking of savvy solopreneurs. And then today, I caught this cool little post from Evelyn:
"I know a lot of free agents, consultants, and self-employed folks.
Without ‘productizing’ your services, I’m finding it’s just not an
entirely sustainable venture. Says multimillionaire best-selling author
Robert Kiyosaki, ‘One of the drawbacks to being a successful ‘S’ [self-employed person] is that success simply means more hard work.‘" (emphasis hers)
I tend to see things through the lens of my six years experience in
the professional coaching field. Traditionally, the way to build a
coaching practice is to just start coaching people one-on-one. A
coaching session lasts anywhere from 30-60 minutes, and they’re done
either via telephone or in-person. That means if you have 20 clients,
you spend 10-20 hours on the telephone. For some people, of course,
that situation is fine. In fact, most coaches would be happy elated to have 20 clients.
As Evelyn points out, however, a practice
business like that is not sustainable. It’s a hamster wheel. The income
will continue as long as you’re working with clients, but once you stop
(for whatever reason), so does the income. The same is true for most
consultants, designers, dentists and a plethora of other professional
service providers.
Hamster wheel.
In The Bootstrapper’s Bible, Seth Godin asks: "Do you want to be a freelancer or an entrepreneur?"
"As
you consider different business models, you need to ask yourself the
critical question above. This is the moment of truth, and being honest
now will save you a lot of heartache later."The difference? A freelance sells her talents. While she may have a
few employees, basically she’s doing a job without a boss, not running
a business … There is no huge pot of gold. Just the pleasure and
satisfaction of making your own hours and being your own boss."An entrepreneur is trying to build something bigger than herself.
She takes calculated risks and focuses on growth. An entrepreneur is
willing to receive little pay, work long hours, and take on great risk
in exchange for the freedom to make something big, something that has
real market value."
One of my heroes, the late Thomas Leonard, founded CoachU
in 1992. He could have continued his career as a professional coach
more easily, but he wanted to build something bigger than himself. That
aspiration paid off as he went on to sell CoachU in 1996 – a move that,
in his words, made him "independently wealthy." He later launched Coachville
in 2001, and within the first two years generated over two million
dollars in revenue. Thomas passed away in 2003, but his legacy remains.
CoachU and Coachville are still two of the strongest brands within the
coach training field.
You don’t have to be a Thomas Leonard (some say he was a genius) to
build a self-sustaining business. In 1997, while still in high school,
Jordan McAuley began collecting the addresses of celebrities. As it
turns out, people will pay for that kind of information, and that’s
just what they do when they visit Jordan’s website, www.contactanycelebrity.com.
This is a self-sustaining, information-based business that generates
revenue well over six figures per year. If he chose to do it, Jordan
could probably sell it tomorrow, and retire at a very young age.
It’s not that much easier to be a freelancer
versus an entrepreneur. In fact, some might even say it’s harder. Yes,
some of the requisite skill sets are slightly different, but you can
plan on working your ass off either way you go. You might as well build
something with all that time and energy you’re investing.
You don’t have to start big, but you do have to
start thinking that you’re building a business that has real value. A
business that someone, someday may want to pay you for the opportunity
to take off your hands. A business that you can pass on to your
children when you’re ready to retire. A business that will be here long
after you’ve left the party.
To bring this back to where I started, begin with
the simple idea that any business has products. For many freelancers,
their only product is the personal service they provide to their
clients. Now just take it a step further. What else can you provide
your clients that doesn’t require your presence? What bite-sized chunks
of you can you create to reach more people, more easily?
My friend Helaine recently created an ecourse that she offers for $29.00. Patsi Krakoff and Denise Wakeman created their Build a Better Blog
course. Pat Misterovich formed a licensing agreement with Pez to develop and market an mp3 player that looks like a Pez candy dispenser (here’s the full story).
Will these products turn their businesses into a
self-sustaining enterprise overnight? Probably not, but the real
success lies not in developing a single passive revenue product, but in
developing a process for continued product development. Even if
your first product if a flop, like so many are, at least you’re several steps closer to perfecting a product development process. And it’s the
product development process that helps transform the freelancer into a successful savvy solopreneur.