‘Make money while sleeping’ – is that not every business’s dream? What if I told you that there are ways to make it more than a dream? Yes, that’s passive income. This is money that takes little to no effort to generate. In other words, once you have put in the initial effort, you can sit back and let your money work for you.
A passive income strategy is a business strategy that allows businesses to make profits regularly from a source other than the main business, which means you can essentially earn money without ‘doing extra work’. In other words, once the initial work is put in, you sit back and let your money work for you.
Having a source of passive income is important because it allows you to maximize your time how you want to. It also lets you take on more projects and work on big projects since funding is available.1
Passive income can be any of the two categories: the category that requires money to start, and the category that requires time and effort to start and set up.
Passive Income that Requires Money
1. Investment, Bonds, and Stocks
One way to generate passive income is through investments. You can invest your business profits in stocks, projects, companies, or mutual funds and your money grows while you sleep or focus on other things such as your core business. However, you have to conduct extensive and thorough research before investing. You should note that there are risks; you have to decide if you are a high risk, low risk, or moderate risk investor. This helps to determine the types of risks to take up as well as investments to partake in.
It is also advised to diversify. That is do not put all your eggs in one basket, so that in case of a loss, you do not lose it all at once.
2. Real Estate Property
Another popular way to generate passive income for your business is via real estate.2 Business owners and entrepreneurs have opted to rent out homes, apartments, condos, and office space to generate healthy monthly or yearly revenue. Clearly, real estate is a great source for generating some automatic income, but it also requires funds to start and sustain.
You can purchase real estate to rent out to long-term tenants, office spaces, co-working spaces, short term rentals, vacation homes, or even Airbnb.
Passive Income that Requires Effort and Time
The growth of the internet and technological developments has supported the rise of blogging as a way to earn passive income by selling advertisements or products on a website that generates a lot of traffic.
As long as your business is creating entertaining and useful content that people like, they will keep on coming back for more hereby generating traffic for your website. The more traffic your business website generates, the more you can charge and make from the sale of advertisements as well as products or services on the website.
You need money to purchase a domain and hosting plan, but that’s not a lot. You have to put in the time to set up a blog and create a plan, as well as a content strategy, to aid content creation and posting.
4. Skill Branding and Selling
Some of these include masterclasses, ebooks, videos, online courses, tutorials, coaching, templates, etc.
What is your business an expert in? What is your business a master at? Package it into a course, video, ebook, blog post, newsletter, and sell online. Work on your business’s skill or knowledge, and generate a strategy to build passive income with it. For instance, you can create a “how-to” ebook, promote a sponsored video on how to do something, or an online course.3
You can then promote and sell this on your business website or on platforms like Teachable or Udemy. Once you complete the creation of the course, people can purchase it and move along at their own pace without any extra work from you.
5. Sales Funnel
Sales funnels conceptualize the steps of converting prospective customers to paying customers. An automated sales funnel creates a series of steps. In these steps, the leads get to know about your business and its offering, based on the level of interest they show via certain action triggers, till they are turned into paying customers.
However, building a proper sales funnel is no easy task. It requires a serious amount of upfront investment of your time, and requires lots of actions and triggers to set up.
In order to build your sales funnel, you need to offer something in exchange for an email address, effectively creating a free offer, e.g. courses, ebooks, masterclass, tutorial, worksheet, template, discount, etc. Create a free offer and build an automatic email series that will move your leads up the value ladder of products that you are selling.
6. High-yield savings accounts
Another way to earn passive income is by putting money away in a high-yield online savings account, such as BizVest’s Savings account. This can also be ideal for growing your emergency fund. The interest paid from the savings account is usually added to your balance, which you earn interest on again
It doesn’t get any more passive than putting your money in a savings account with a platform offering high yields. Then sit back and watch your portfolio grow.