From Side Hustle to Real Business

My first $1.26 came from a new project while I was on a layover in Brussels—not enough for a Belgian waffle, but I had a good feeling about the future.

The three tweaks that grow any business

Here's the not-so-secret to improving income in an existing business. If you grow your traffic a little, increase your conversion rate a little, and increase the average sale price a little... your business grows a lot.

Those are the three levers.

Increase traffic

I heard from a new business owner who was disappointed that only four people bought during her first product launch. "How many prospects were on your list?" I asked. "Maybe one hundred?" she said.

I was impressed. Four percent is a great conversion rate for many businesses. Her problem wasn't getting more of her limited audience to buy. It was getting more of an audience in the first place. When you're stuck at low sales, the first question to ask is: are enough people seeing my offer?

Increase conversion

Once you have stable traffic, look at the conversion rate. The classic approach is A/B testing—measuring one headline or offer against another and going with the winner.

But here's what Ramit Sethi told me: "Testing is important, but it pales in comparison to the traffic source." People love to split-test headlines and tiny boxes. They can usually get greater returns by focusing on where the customers come from rather than what happens after they arrive.

Increase average sale price

This one's the easiest to overlook and the fastest to implement. You can increase average sale price through upsells ("Would you like fries with that?"), cross-sells ("Customers who bought this also bought these"), and sales-after-the-sale ("This additional offer is only available right now").

The confirmation page after someone makes a purchase is one of the best and most underused places for an upsell. Conversion rates there can hit 30% or higher. Your customer just gave you money. They're in buying mode. Make a strong offer right there.

Growth in action: $50 report to $1 million

Perry Marshall is a Chicago-based business consultant. He'd written a popular report that sold multiple copies every day for $50. He was also doing one-on-one consulting at a high hourly rate. Good setup—but there was a gap in the middle.

One day someone pointed it out: "Everyone who buys this report loves it, but they don't always know how to implement what you teach. They also don't need your high-end consulting. So why not offer a series of jump-start workshops that people could take as a group?"

Perry wasn't sure. But he decided to try it. When the idea generated more than a million dollars for his small firm, he was astounded.

The lesson: Perry didn't create a new business. He created a new level of his existing one. Same audience, same expertise, new price point between the $50 report and the expensive consulting. That's a tweak, not a pivot.

Reese Spykerman, my designer, did the inverse. She was getting far more inquiries than she could handle. Her husband Jason noticed the requests fell into three groups: prospects who could afford custom work, prospects who couldn't, and a third group in the middle—people with decent budgets and interesting projects who didn't need a fully custom solution. So Reese created a line of website themes at a flat rate. Not as custom as her full service, but much better than everything else on the market. Same skills, productized for a different price point.

Both Perry and Reese grew by filling a gap that was already there. They didn't work harder. They worked sideways.

Raise your prices

This one scares people more than it should.

Andy Dunn is a developer in Belfast, Northern Ireland. He left his day job after pitching a web application to a CEO—and not just pitching an idea, but building the entire app first and sending it over. Out on his own, Andy had no trouble finding work. But he had a big problem with pricing. He'd set his rates so low that they were unprofitable. In one case he ended up several thousand euros in debt from bidding too low and then outsourcing part of the work.

The fix was a 25% raise. He was terrified to do it, then greatly relieved once it was done.

"The simple act of raising my rates by 25% allowed me to either work seven hours less a week, or make a significant increase in my monthly income," he told me. "The other, unexpected benefit was that it gave me much more confidence. Until I upped the rates, I didn't make the connection that I was worth more than I had been charging."

I separately surveyed fourteen freelancers who'd raised their rates—a veterinarian, a voice coach, a sign language interpreter, consultants, writers, and designers, spread across Canada, Australia, New Zealand, South Africa, the UK, and the US. Despite the different backgrounds, I heard the same story: "Before my price increase, I was worried that no one would hire me again. After the price increase, I realized how easy it was and I wish I had done it sooner."

Common customer response when told about the increase: "It's about time! You're worth more than you've been charging."

When your clients are complaining that the price is too low, you should listen.

Offer a range of prices

Even Apple does this—entry level, mid-level, high end. Having a premium version creates an anchor price. When someone sees the $199 option, the $87 version suddenly feels like a deal.

Here's the math. Say you sell a widget for $87 and get 20 sales. That's $1,740. Now offer three tiers: Premium at $199, Better at $129, Budget at $87. Of 20 buyers, 14 pick the middle, 3 pick the budget, 3 pick premium. Total: $2,664. That's $924 more from the same number of customers.

The shift: instead of asking "do you want to buy this?", you're asking "which version do you want?" That's a different question. It assumes the sale and lets the customer choose how much value they want.

Get paid more than once

Subscriptions, memberships, continuity programs—whatever you call them, the principle is the same: getting paid over and over from the same customers for ongoing access.

Run the numbers. A hundred subscribers at $20 a month is $24,000 a year. A thousand subscribers at the same rate is $240,000 a year. Add 50 subscribers and you've got $1,000 more per month. Raise the price to $25 and your thousand-subscriber base generates $60,000 more per year.

Brian Clark at Copyblogger built his entire model this way. Some products are one-time purchases that begin the customer relationship. Others are recurring. His strategy: "Move as many one-time purchase customers as possible to a more lucrative recurring service."

Here's the line from Brian that stuck with me: "The key to this model is not market share. It's share of customer." He doesn't worry about what other people are doing. He worries about improving his customers' lives through useful services. And they keep paying him for it.

Grow wide or grow deep

You can expand one of two ways. Horizontally, by going wide—creating different products for different people. Or vertically, by going deep—creating more levels of engagement for the same customers.

Perry Marshall went deep: same audience, new price tier. Nathalie Lussier, whose full story is on the one-person business examples page, went wide: she took her tech skills to a completely different audience while keeping her original business on autopilot. She called it franchising herself—her skills were the franchise, not the niche.

Both work. The point is that you have a choice, and it's worth thinking about which direction makes sense before adding products and services at random.

There's also the hub-and-spoke model. Your hub is your main website—your home base, where you control the content and where customers ultimately buy. Your spokes are everywhere else you spend time: social networks, forums, meetups, guest posts. The goal for each spoke is to support the hub, not the other way around. You own the hub. Social platforms own everything else.

The outsourcing question

Of all the topics I covered in the research, outsourcing was the only one that produced wildly different opinions. Every other theme—bootstrapping, limited planning, the connection between freedom and value—got similar responses from almost everyone. But outsourcing? It split the room.

The pro camp

Jamila Tazewell started making handbags and wallets in New York while waiting tables. Three years in, she was glad she no longer waited tables, but she felt like she'd bought herself a job—she did everything herself. So she hired a local seamstress, then brought in someone to do printing and shipping. "Getting the product out of my home office was incredibly liberating. It felt like my child was finally old enough to go off to boarding school or something."

The anti camp

Adam Westbrook, a UK-based design services business owner: "I can fit my whole business into a backpack and take it wherever I go. Keeping my overhead to zero has lowered the risks and kept profits high."

Brandy Agerbeck, graphic facilitator: "My motto: Never have a boss, and never be a boss."

Andy Dunn (same developer from Belfast): "My experiences with outsourcing left me spending nearly as much time managing the work as it would to actually do it myself."

I tend to fall in with the anti-outsourcing camp in my own business. But I know it's not the best fit for everyone. The answer depends on two things: the specific business and the personality of the owner. A business built on repetitive tasks might benefit from outsourcing. A business built on personal relationships probably won't. And your own temperament matters just as much—some people genuinely thrive with a team, and others work best alone.

Growing on your own terms

There's no point in pursuing growth for growth's sake. You should scale only if you really want to. Here are three people who resolved that question in completely different ways.

Tom Bihn: turned down the biggest opportunity

Tom runs a factory in Seattle's SoDo district with twenty-plus employees and a floor full of sewing machines, making popular backpacks and laptop bags. Big-name retailers have repeatedly asked to distribute his products. He's turned them all down.

"We chose to be our own manufacturer and direct retailer because it's more interesting: we get to march to our own drummer. If the goal is simply to make money, well that's just boring—we wanted to make a cool business, with cool products, cool customers and cool employees."

Cash flow comes from many individual customers, so Tom never has to worry about one big store dropping his inventory. When I asked about bad days, he said something I think about all the time: "All the bad days have two things in common: you know the right thing to do, but you let somebody talk you out of doing it."

Jessica Reagan Salzman: grew, then deliberately shrank

Jessica runs a bookkeeping shop in Attleboro, Massachusetts. When her husband was laid off—second child just three weeks old—she had to take the business from side project to full-time income, fast. It grew, then started growing too fast.

"We had made major progress in growing revenues, but we had also experienced soaring costs, and our bottom line clearly reflected the necessity for a major change."

She'd assumed that's what you were supposed to do—as the business improves, you hire people. Right? But hiring creates higher costs and fixed obligations. Jessica switched back to a sole proprietorship and returned to a one-woman shop—on purpose.

Tsilli Pines: the cautious path

Tsilli crafted custom Jewish wedding contracts as a night-and-weekend business for eight years while working at a design studio. At the end of 2009, she gave notice at the studio and went full-time.

The first week felt great. The second week, she started wondering what to do all day. "I underestimated the value of having some work that was collaborative and not self-directed." The all-or-nothing paradigm was too much pressure. It was, as she put it, "a creativity killer."

Six months later, she went back to her old employer—part-time, three days a week, as a contractor. The business is still profitable, and she's still running her plan, just without the pressure of needing it to cover everything. "The feeling is that I'm still laying brick after brick. The different pieces interlock, and over time they may build to critical mass."

What to do this week

Pick one tweak—just one.

If you're not getting enough attention, focus on traffic. If plenty of people see your offer but few buy, work on conversion. If people buy but the amounts are small, increase your average sale price—add an upsell, create a premium tier, or just raise your prices.

If you want to run a proper launch around your changes, that's even better. But a tweak doesn't require a big event. It requires a small change, measured carefully.

And if you're still at the very beginning, before any of this growth stuff matters, go test your idea first. Pick one from the list of $100 businesses if you don't have one yet. Then come back here when you've got something to grow.

Frequently asked questions

Do I have to quit my day job?

No. Many people in the study kept their day jobs permanently and ran the business on the side. Tsilli Pines went full-time, then went back to part-time at her old studio because the all-or-nothing model didn't suit her. There's no single right answer. It depends on you.

What's the fastest way to grow revenue without working more hours?

Raise your prices. Andy Dunn raised his rates 25% and either worked seven fewer hours a week or earned significantly more. Most of the service providers I surveyed said the same thing: "I wish I'd done it sooner." If your clients respond with "It's about time! You're worth more than that," you've definitely waited too long.

Should I hire help or stay solo?

Depends on your business and your personality. Jamila Tazewell said hiring a seamstress and shipper freed her to focus on design. Brandy Agerbeck's motto is "Never have a boss, and never be a boss." Both are successful. If your business runs on repetitive tasks, outsourcing might help. If it runs on personal relationships, you're probably better off solo.

How do I know if my business is ready to grow?

When the first sale is behind you and customers keep coming back, you're ready to start tweaking. Focus on the three levers: traffic, conversion rate, and average sale price. Improve any one and revenue goes up. Improve all of them, even a little, and it compounds fast.