There's a lot of talk about passive income
You hear a lot of people talking about passive income and everyone has their own way of looking at it or even caring about it. You might even dream of putting key areas of your business on auto-pilot so you can spend more time on the beach, traveling or living carefree with money still coming in. I did say dream, didn’t I?
Instead, you tend to spend your time working “in” your business, even trading hours for money. Even when you do this you are limiting your income because there’s only so many hours in a day. Passive income can bring change to this way of doing your business and even help manage your stress and perhaps chances of burn-out because there’s always so much going on.
What can passive income do for your business?
Setting up a viable passive income stream is the dream of many small business owners and freelance service providers. This is a system where you don't have to be there and work every minute for the money you earn.
You put in the work to set it up and then, as it runs, you earn. In other words, you don't just earn money equivalent to the time you put into your work.
For example, you're an in-demand blog post writer and you get paid by the word. This means that if you write a certain number of words, you get a certain number of dollars.
The rate you receive might be excellent and your earnings high. But there's a ceiling that you'll never break through because even at a good rate, you only have so much time and there's only so much work you can do.
How do you do it?
Here’s a simple example of setting up a passive income stream. So, you write an eBook. You do some background work to create the book, publish it, and advertise it. This includes building a website where people can purchase and download your eBook, and efforts to drive traffic to this site. The site is totally automated. People land there and buy, and the cash rolls in without you doing anything further.
Creating a passive income stream can be as easy as adding a product recommendation to your sales funnel.
Ideas for Passive Income Streams
So, how do people create passive incomes? Here are some of the common ways people do this.
eBooks. You can create eBooks and publish them on platforms like Amazon Kindle or E-Junkie. They can be selling on those platforms (as well as your website) while you take care of other business.
Online Courses. Offer online automated courses and webinars. These aren't live courses, but pre-recorded and automated, and on "evergreen" topics that are always relevant.
Digital Products. Create other types of digital products such as video tutorials and podcasts that teach your audience how to do something. These can be available for purchase and download.
Membership Sites. Create a membership site that charges for membership or runs on a subscription basis.
Affiliate Marketing. Sell similar products offered by other vendors for a commission.
Ad Revenue. Offer ads for your high-traffic website or blog.
There are so many ways to create a passive income depending on your audience, your expertise, and your sales funnel.
What a Passive Income Isn't
Unfortunately, there are some widely-believed myths regarding passive incomes as well, so let's look at what a passive income isn't.
A passive income isn't a lazy way to make money. You're not going to be sitting on a beach sipping a cocktail while the money rolls in. There's work to do to set up a passive stream of income. There may also be some light maintenance. Be prepared to put in this work.
Passive income streams also aren't just about making money. A passive stream of income can help you deal with economic insecurity. It can give you a "salary" that releases you from having to work for every penny. You can give yourself a financial cushion that allows you time to focus on other aspects of your business.