The idea of not having to work for every penny you make may sound like a dream, but it’s definitely a reality for most entrepreneurs nowadays. Why wouldn’t anyone want to put in the time and hard work once, to later watch their bank balance increase by itself, perhaps while sipping mojitos on a beach somewhere in the Caribbean? Passive income has traditionally been generated through property rentals or stock investments. While these continue to be good sources of revenue, much of human activity has been transferred online and, with that, the possibilities for passive income have drastically increased. We now have multiple ways of making money without putting continuous effort into it. And that’s good news!
As a service provider, your biggest problem is that you only get paid for the time you’re able to put in. The time you spend with your client is the time you cash. That puts a limit on your income since there are only so many hours one can work per day and only so much you can keep increasing your prices. And if you don’t work, you don’t get paid! Therefore, establishing passive income channels to supplement your active income or even surpass it might be a worthy idea to explore. But first, you need to know a few things:
- Passive income is not entirely passive; it requires initial effort and possibly even financial investment (online courses to learn the skills, software, coaching, etc.). You will need to research topics, develop products, and finally, market them.
- The time commitment may continue even after improving the product, for tasks like marketing or customer service.
- It is not a straight road lined with roses. You would need to experiment and learn what strategies are best and what products work for your target audience.
- To generate the most income you might need to implement various streams of revenue.
With that out of the way, let’s explore the most common, but also most profitable, methods of passive income.
Designing Online Courses
Creating a course is an excellent method of helping more than one client at a time. It is not only a money-generating product but also a way to make your knowledge accessible to those who can’t afford to pay for one-on-one sessions. To create a successful online course, first brainstorm the problems and needs of your audience. Focus on a specific niche, since general courses are faced with higher competition. Your marketing strategy should be centered around selling outcomes, not the product itself. It might be scary to think about creating a whole course and marketing it with confidence, but there are plenty of professional guides on how to do it. But know that the eLearning market is expected to be worth 325 billion dollars by 2025. So why should you miss on grabbing a slice of that pie?
Creating Digital Information Products
Information products include downloadable eBooks, templates, guides, and the like. This is another fantastic advantage of the online world. Digital products are easier and cheaper to produce and almost effortless to distribute. Customers can own them in a matter of seconds which makes them even more attractive. The most popular digital products are eBooks. You can sell them via your website, or on eCommerce platforms/digital bookstores like Amazon, iBook, KOBO, Smashwords, NOOK, etc. As it goes with online courses, the digital products you create should also be relevant to your niche and knowledge. Trying to sell information products on subjects you don’t master will show and will only negatively affect your reputation in the end. On the other hand, helpful and high-quality eBooks can serve as a testimonial to your expertise and can motivate potential clients to purchase your services or your online courses.
Employing Affiliate Marketing
Advertising and selling products or services of other companies or other solopreneurs can be an effective way of creating extra income, especially if you yourself have found them interesting or useful. This is called affiliate marketing. People would purchase a product or an online course through a link on your website and you would get paid a commission for each sale. This commission usually ranges between 4-10 % but can be as high as 90 % for some digital products. You do not need to develop the product, so it saves you time and the initial investment. However, you should always practice affiliate marketing in an ethical manner, by being transparent about earning an income from that promotion. Otherwise, your customers might feel cheated. That aside, affiliate marketing definitely has its perks. Besides its large money-making potential, if the clients end up enjoying the products you recommend, they will be more likely to trust you and even thank you, aiding your brand image and generating word-of-mouth marketing in the end.
Utilizing Membership Platforms
A membership platform can include a free Facebook group where the members engage in sharing useful information (crowdsourcing) while also having access to you, and/or a paid monthly subscription to a platform they get access to exclusive benefits and deals. You can offer member discounts for courses and information products, access to members-only content, regular live webinars with Q&As or even live meetups. Membership platforms can be a great addition to service-based online businesses because they allow one’s clients to help and feel useful themselves. Many individuals enjoy that sense of community and support, the ability of seeing others struggle and conquer, and the opportunity to advertise their own offers and gain new clients.
As you can see, investing your time and money into creating sources of passive income and shifting from offering only services to developing digital products as well is definitely worth it. It would allow you to produce higher and continuous revenue with less effort, grow your client base, and ultimately help more people than you could ever imagine. And if this allows you to soak under that hot Caribbean sun for a little longer, then why not give it a shot!