How to create financial security going solo. Part 2.
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Last week, I kicked off a 2-part series on creating financial security as a solopreneur.
In case you missed it, the punchline for part 1 was: your value in the marketplace is determined by the value of the problems you solve and your unique qualifications to solve it. Being a generalist doesn’t pay.
To further help you, this week I’m going to focus on how I make my income, including the pros and cons of each category.
Keep in mind, one size never fits all. That’s why I’ll offer “my take” on each category.
Let’s jump in!
Book Sales.
Most execs I talk to have daydreams about writing a book. So, I’ll start here. But as you’ll soon see, it’s the least impressive category.
Keep in mind, my book was a best-selling title, and I own all publishing rights. That means, I don’t share revenue with a publisher.
Still, book sales only account for 2% of my total income.
Pros: writing a book will build authority in the marketplace, unless it’s a turd. You’ll generate substantial ancillary income streams and enjoy premium rates, if it’s a good one.
Cons: revisit your personality profile from week 2. If creativity isn’t a signature strength, this will be a painful process yielding mediocre results.
My take: a book allows you to introduce breakthrough thinking and quickly establish authority. But be prepared, everyone has an opinion—and they’ll share it with you.
Speaking Engagements.
You don’t need to be an author to grace a stage. You can still build authority in the marketplace, and people will pay to hear your stories and advice.
For me, speaking engagements account for 12% of my income. Keep in mind, I only do keynote talks, and I’m usually the top-billed speaker for an event.
Pros: if you like travel, this is the easiest money you’ll make. Events will pay you to be a walking billboard of your business—meanwhile, other vendors will be paying the event to have their booth largely ignored in the sponsor cheap seats.
Cons: I truly believe you’re born comfortable being on stage or not. There are many people who lean on Toastmasters and orgs like that to improve public speaking. I don’t think it works. So, be honest with yourself.
My take: I love travel, but it’s been tough at times. There were many mornings of waking up in a hotel and not remembering what city I was in. But by and large, this is my fav thing to do to earn money.
Consulting.
This is generally the most lucrative income stream for solopreneurs. And you’ll learn the most lessons about adding value to organizations you serve.
You don’t want to trade time for money. Instead, you need to trade wisdom. That means, fixed fee engagements focused on outcomes more than activities.
You also need to “productize” your offering. Most businesses know how to buy widgets, but they suck at buying services. So, make your service look like a widget with defined outcomes and product-like branding.
As an example, my flagship product is called the Leadership Operating System. It’s a 12-month consulting program full of tools, templates, and methods that help tech leaders overcome dysfunctions and collaborate more effectively. It’s priced at $76,000.
Consulting represents 71% of my income.
Pros: you don’t have to do as much “hunting” when it comes to sales. Your clients tend to be long-term, loyal buyers of your services. They also happily provide referrals.
Cons: you may get more entangled in your clients’ business than you prefer. If you’re not careful, it might even feel like full-time employment.
My take: it’s all about client fit. If they pay me for my heart and mind, things go well. If they pay me for my hands and feet, it doesn’t. Over time, you get better at recognizing your ideal clients but prepare for a few heartaches along the way.
Coaching.
The coaching business is growing fast. At times, it feels like the market might be over-saturated. But if you follow my advice from last week and focus at a sub-niche level, you’ll be able to cut through the noise.
Coaching is different than consulting because you typically work with clients in a one-to-one setting. You also don’t solve problems for your clients—rather, through inquiry you help them discover insights and implementation plans.
I also offer a group coaching course, called Reset Your Compass. It helps participants do a deep dive on major career decisions, including going solo. I only offer it a few times a year, and it generates a decent size waitlist.
While consulting is the biggest piece of my business today, my hope is coaching will replace it in the long-run.
For now, coaching is 14% of my income.
Pros: individuals are usually more self-motivated to make change happen on a personal level than they are solving problems for their employer. You will gain so much self-satisfaction watching highly motivated people change their lives and careers with your help.
Cons: it’s a lot of effort to sell. You need to build a really big funnel of prospects. And unfortunately, people have a hard time understanding they aren’t paying you for an hour of help. Rather, they’re paying for 30 years of know-how to fast track their goals. So, they tend to get sticker shock 95% of the time.
My take: I absolutely love coaching. People’s stories are so inspiring, and they absolutely kick ass when they put their heart into a really important goal.
Digital Products.
I saved this one for last because it’s the toughest path to financial security. Digital products for me have included an online training course and a software company I partially own, called POPin.
The promise of digital products is they’re “passive income” and you earn money “while you sleep.” Cutting through the BS, nothing is passive. In fact, the overhead can be quite high.
The ROI I’ve received on this income stream isn’t very impressive. In fact, digital products have contributed 1% of my income. Yikes!
Pros: if you like tech and tinkering with blinking lights, you’ll love it!
Cons: if you want to make money, you’ll likely hate it!
My take: digital products are a complete crapshoot. In consulting, speaking, and coaching, people pay to hear my advice. In software, they want me to just shut up and give them $10/mo. pricing for something that costs $22/mo. to provide.
Call to action.
Given our discussion the last two weeks, what do you think you would offer if you were a solopreneur tomorrow?
Send me a message to chris@peoplebeforethings.co (not .com) and share your ideas.
Keep in mind, the value of your services is based on the value of the problem you solve. So, tell me a little bit about that, too and your unique qualifications to solve it.
As I’ve said before, there’s no sales catch here. I just want to help, and you’d be crazy not to take me up on it!
Your coach,
Chris
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