Graham Cochrane best passive income and side hustle advice

Back in 2009, like so many during the Great Recession, I got laid off. I had been working 9-to-5 as an audio engineer, and working as a freelance music producer for indie bands on the side 

I decided to take the setback of losing my job and use it as a chance to devote time to growing my side hustle, even though I knew nothing about being an entrepreneur. 

Today, I have built two online businesses, a music education company and a business coaching brand, and I make around $160,000 a month in passive income and work less than five hours a week.

DON’T MISS: The ultimate guide to earning passive income online

I’ve learned a lot about what it takes to create a highly profitable business. I have shared my knowledge with over 3,000 clients, and I even wrote a book about my experience. 

So if you want to start a side hustle, this is the No. 1 piece of advice I would give you.

Early on, I was all about what I call “the hustle method.” I had found a problem that I could help people solve — record better sounding music — with my skill set.

I put all my effort into getting clients and selling my services to them. I spent all my time calling, emailing, and DM’ing musicians, artists, and bands to see if they needed help producing their next album. I was working working 32 hours a week on it and making only $2,000 a month.

I asked past clients for referrals and attended events that drew musicians in the hopes of handing out business cards. I did just about anything I could to let the world know that I was open for business.

As I freelanced, I regularly created content online around the topic of audio engineering. And as my audience grew, I began to find strategic ways to monetize the content I created. Within a few months it became clear that if I focused on automation, rather than hustling, I could make more money and have more time.

The automation method has four components. Here’s how I break it down: 

1. Discoverable content. This includes YouTube videos, blog posts/articles, and podcasts. I don’t count social media because it’s not evergreen, meaning it doesn’t stay visible forever. You want to create content that shows up in a Google or YouTube search. Think simple “how to” content that answers your target customer’s biggest questions.

   An example in my music business might be, “How To Build A Home Recording Studio For Only $300.” This might take me two hours to film, edit, create a thumbnail and post.

2. Free gifts. Once someone discovers your work, you want to move them from that content platform to your own email list. This is especially important with the threat of platforms like TikTok being banned. This gift can be a PDF guide, free video masterclass or audio training.

   For example, with that home studio video, I include a free “Studio Gear Guide.” It’s a simple PDF that has all my recommended equipment at different price points so people can skip the guessing and buy what I know and trust.

3. Email autoresponders. Once someone downloads my free gift and gets onto my email list, I will have a few days worth of pre-written emails go out to them that add some more value. Typically I’ll teach a few key concepts that build off of my YouTube videos for the first three days.

   I like to use a tool like Mailchimp or Kajabi to handle all these automated emails. Kajabi isn’t free but it includes a website builder, private community, and hosts your digital products. Mailchimp has a free plan and can be a great place to start. Towards the end of that first series of emails, you’ll want to pitch your product, which is the fourth and final component.

4. Digital products. Being able to sell your knowledge through a digital product like an online video course or paid community is a great way to help free up your time and grow your income. You can sell items like e-books or affiliate products, or encourage people to sign up for your coaching if you prefer. Either way, everything happens automatically, which is key.

   My favorite digital products are online courses. Filming doesn’t have to take long or be expensive. I have business coaching clients who filmed their courses in the space a weekend on their iPhone.

   As far as price point, I have seen hobby and niche courses cost anywhere from $50 to $300, and business and money related classes go for $500 to even $3000. Do some comparison research for your area of expertise to get a sense of what will work for you.

Whatever side hustle you choose to start, ask yourself: Am I building something that can scale easily and cheaply and also be sustainable in the long run? If the answer is yes, I think you’re on the right track.

Graham Cochrane is the author of “How to Get Paid for What You Know” and is a business coach to over 2,800 customers worldwide. Follow him on Instagram and Twitter.

Want to make extra money outside of your day job? Sign up for CNBC’s new online course How to Earn Passive Income Online to learn about common passive income streams, tips to get started and real-life success stories.

Plus, sign up for CNBC Make It’s newsletter to get tips and tricks for success at work, with money and in life.