How to create passive income for your business
I’m sure you have heard the term "passive income" get thrown around a lot, and it has definitely gotten a bad reputation over the years.
Today I want to share with you how I have developed passive income streams in my business, and how you can replicate the process. About 85% of my business is passive income.
This post may contain affiliate links.
I use several different methods to generate that income every month, and it isn’t from having a huge e-course or product. One of the ways I make recurring income is from something that only costs $7.99.
It is all about being intentional and creating strategic paths for your audience.
I am going to go into more detail about all of that in a minute, but for right now, let’s talk about what passive income means.
What is Passive Income?
Passive income is an income received on a regular basis, with little effort required to maintain it.
This means that it is income that you aren’t constantly working at every single day to make.
Examples of passive income in your business could include:
● Affiliate Marketing
● eBook Sales
● Digital Downloads or Product Sales
● Paid Email Courses
With passive income, you create something and then continue to make money from it, without having to actively work to generate that money every day.
Active income that you make in your business is not something that you can just do and then forget all about it.
You are trading your time for payment.
You have to put in the work to to get paid. It is non-recurring income that your business receives.
This is how most businesses earn their money.
With active income, you aren’t able to put in the time and work and then sell it over and over again. It does require constant effort and work.
An active income is being hired to complete a job; you complete it and you get paid.
You will not generate any more money from doing it. Examples could include:
● Freelance Work
● Sponsored Posts
Although passive income does require work, it is normally minimal because you can set up automations and paths for your audience, so that you can continue to earn income month after month.
There is still work such as customer service, marketing, and updates that are made for these passive income streams, but you will still get recurring income for this work.
You get paid over and over again for the same task that you completed.
The key is finding ways that you can automate or set up passive income streams in your business.
Doing this will provide you with the freedom and time to do what you want to do in your business.
You know all the tasks that you love doing? Like creating new products or e-courses? You can spend time doing those tasks once you have created your passive income streams.
How I Make Passive Income
I told you that about 85% of my business is passive. Let me break it down for you so that you can see where that money comes from.
I wrote a book called Breakthrough: The Complete Guide to Growing Your Platform & Earning a Full-Time Income Blogging. I published this book in June of 2015.
After the book launched, it became completely automated.
I still promote it when I can, but I consistently make money every single month from the sale of this book on Amazon. It can be purchased as an eBook, a hard copy and there is even an audio version of it.
Even though I am not actively working on this book, it still continues to make money every month.
This is the perfect example of passive income. Even though I put in a lot of time when I wrote the book and launched it, I have recurring income without having to work on it now.
Automated Digital Download Purchase
On my other site, Frugal Fanatic, I created a monthly and yearly household budget. It is a digital download that my readers can purchase for either $0.99 or $7.99.
It is an electronic file so there isn’t a set amount that can be sold. It can be downloaded over and over again without me having to do more work.
It doesn’t have to be a huge product that costs hundreds of dollars. I make money from a product that only costs $7.99. I made it years ago and I still generate money every month.
I know a lot of bloggers get overwhelmed because they feel like they need to create a massive e-course or a huge in-depth product, but you can start small.
Think of a smaller product that you can create and automate so that you can stop trading your time for money.
One way that I earn this passive income is by setting up an automated process for when someone new subscribes to my site.
The majority of my audience comes to Frugal Fanatic to save money, so I knew when I created my Monthly Budget and Yearly Budget products that they would be interested in purchasing them.
Here is how I have automated this process to earn money from a small product every single month.
Whenever someone opts into my site using this form in my header,
They are immediately sent to a sales page to purchase my product bundle for $5.99. They have 15 minutes to get the discount, otherwise they will have to purchase it for full price at another time.
If they choose to purchase the bundle, it is automatically sent to their inbox.
I do not have to do anything.
This process occurs over and over again every single day. I do not offer this small product to everyone who signs up for my email list. Right now, I only have it for the one form that I showed you and it has generated thousands of dollars.
I am currently using WooCommerce to sell my budget spreadsheets. There are other options like Shopify and DPD.
You will need to have some kind of shopping cart and a way to distribute the product when you make a sale.
One of the most common ways to generate passive income from your business is through affiliate marketing.
This is one of the top ways that I make money without having to do more work.
I am not going to go into a lot of detail about affiliate marketing in this post, but you can read about how I Earned $9k From One Blog Post using affiliate marketing.
This is a great option if you do not have a product or service to offer, or if you are looking for a way to diversify your income without having to maintain it every single day.
If you are completely new to affiliate marketing, you can check out my Affiliate Marketing Beginner’s Guide to help you get started.
A huge part of the income I make as an affiliate partner comes from Pinterest. I leverage my Pinterest traffic, and have set up automated paths for my readers so that I make passive income.
The processes that I have put in place consistently earn money for my business.
(I have a course to help you easily implement my entire process. You can learn more here: Pinaffiliate Masterclass)
More than 58% of my income is generated from affiliate marketing.
Free e-course to Paid Product
Another way that I strategically earn money behind-the-scenes for my business is through a free email course that leads into a paid product.
I have created a simple funnel for my audience that is automated, and generates sales again and again.
I created a free email course, Affiliate Blueprint. It provides a TON of value for my audience and helps them learn how to earn money as an affiliate partner.
It is all set up through Convertkit. Once someone opts-in, either on my landing page or through another link on my website, they are automatically added to my Affiliate Blueprint sequence from Convertkit and will receive the free email course over the next 4 days.
Convertkit makes this entire process extremely easy. I wrote an entire post about Why I Switched to Convertkit, but the entire automation process is through their platform. Someone signs up, and they are added to a specific form which sends out my email course sequence.
This process works very well because I provide the value upfront before I try to make the sale to my audience.
At the end of the free email course, I pitch my paid product, Pinaffiliate Masterclass. This sells my course without me having to do anything else.
I even took it a step further and created video lessons and a worksheet that corresponds with every lesson in the Teachable platform. I wanted to be able to provide my readers with the best content and show them how great my free course about affiliate marketing is before leading into a paid product.
There is still a small portion of this process that I actively work on, but it is VERY minimal. I drive traffic to the post using Pinterest.
Here is how the process works:
Once the course was finished, I created a pinnable image so that I could promote it on Pinterest. Once they land on my website, they can sign up for the free course, go through the funnel, and then purchase my paid course.
It’s all about being intentional and creating strategic paths for your audience. You need to sit down and map out how you can automate your business to earn passive income.
Here are some ideas to get you started:
● Can you create an email autoresponder or funnel that will lead into a paid product or an affiliate product?
● Do you have a small product that you can immediately offer for a limited time frame to your audience when they sign up for your email list?
● Can you monetize existing content on your website to include a relevant affiliate offer?
● Can you host a joint venture webinar?
It may be easier for you to visualize by filling in the blanks:
The end goal is to make money from either your own product or an affiliate product that you promote to your audience.
Once you have figured out your paths, you will need to figure out how you can automate the entire process. You want these systems to save you time while earning you money.
The goal is to make it as passive as possible.
I would love to hear how you are earning passive income in your business; please share in the comments below.