Passive income is a strategy to use after you have steady income coming in and you are feeling comfortable and not as worried about just paying the bills. I do not recommend starting with trying to get passive income when you are building a business because it really takes a lot of work first to define your market and really understand what your market needs. You need to hustle and network and do nothing close to being passive when you are starting a business.
Passive income is an income received on a regular basis, with little effort required to maintain it. It is closely related to the concept of “unearned income”. It’s a reward for all your hard work when you start building a business. You will know when the time is right to start adding this into your business model. Your market will tell you. Normally, if you are a service provider, they will tell you they can’t afford your rate for your services or programs to work with you directly. That’s a big sign that you need to add in a passive income stream so they can get your knowledge in one of the below ways instead.
Note: If you want to learn how to put these passive income streams to work in your business, make sure you download our insanely simple business budgeting template!
Generating passive income is not easy and still takes a lot of work to get it set up and to track. It does not happen overnight and you can’t count on it to survive. But, you can count on it to ADD to your revenue and help you reach your goals faster. Your business can run on autopilot and you don’t have to be totally involved in every dollar that comes in.
Here are three ways to create passive income:
1. Evergreen Online Courses
When you first launch your online course, I challenge you to get out there and create a live program. (No, this is not passive!!) I recommended starting with a discount, getting people in and getting feedback to improve the program. That is the number one step. But after you do it once, why not make the videos and worksheets evergreen so that it happens automatically and customers go through it now as a self-study online course. Then, you can start focusing on creating and marketing the upsell and higher level product or program next.
My Dream Career Launchpad course is my completely evergreen online course. I get people purchasing many of them every single day.
P.S. I created this self-study course fast in less than a week. I realized all of the information was in my head and I just needed to get it out. There were lots of late nights during that week but I think it was totally worth it now that it just runs and I can focus on other parts of my business instead. Just set your passive income goal, make a commitment and do it!
If you have been blogging or writing, you probably have enough information already to sell an ebook. But don’t worry, you do NOT need a publisher! As long as you have a laptop, you can easily start selling ebooks. Just create a word document or google document, and PDF it. Then you have your first ebook! You do not even need to have it professionally designed but, of course, you can probably charge a little more for it if you do (and it will probably sell much better!) We also recommend checking out this article about how to find a virtual assistant to help you.
I LOVE teaching and training so I have not focused on ebooks as much. But, you can still find one of my guides in my Business Plan Template. I do have an ebook on Amazon that is available if people want it. When I sell ebooks I feel like I am not providing enough value and I can’t charge as much so that is why I have chosen online training as my passive income focus in my business.
3. Membership Programs
This is an incredible cash flow model that you should definitely consider adding to your business at some point. I love this passive income model because you get recurring revenue from the same customers over and over again automatically. An example of this is a membership site where you can find new healthy recipes and workouts each month or a site that offers new tips and strategies each month on a topic that your customers REALLY want.
The most important thing here though is that they can take a lot of time to run and you definitely need an assistant to deal with credit cards and client questions. You also need to have A LOT of members to earn a solid amount of income if you are charging a lower price.
I have a failure/success story with membership programs myself (because all failures are successes in my book). A few years back, I created the Get Ahead Club and I charged $10/month. I eventually had to close it because I didn’t have the foundation set up in my business yet, so this was just not worth all my time. I hit a plateau because I was still working my day job and just didn’t have the team in place yet to bring this to a mass amount of people. The same number of people were signing up every month as the same amount of people were canceling their membership. This mean no growth! But, I think we have moved onto bigger and better things these days in our membership communities so it’s a failure to a success that I can now share with you!
So remember, a membership site is not the first place to start usually but it can be an excellent addition to your business once you have a solid foundation.
P.S. Make sure you download our insanely simple budgeting template to help you grow your small business.
Which option are you going to explore to add passive income to your business?
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