It’s the buzzword these days: Create passive income! Earn more money by doing less work! We dream of travelling the world while our business whirs away behind the scenes. People buying our product day after day, and we have the time and money to enjoy life!
I love the idea of passive income and totally support the concept. The alternative, active income (like a job, seeing clients, etc.), requires you to trade hours for dollars, and can leave you feeling exhausted, disillusioned, and frustrated that you just can’t seem to get ahead in your business.
Diversifying your business income with both active and passive income can bring a little more balance to your finances and your life, and give you the things you desire – whether it’s time, money, or both.
Before You Create Passive Income, Develop These Three Things
There are plenty of people out there selling courses, ebooks, webinars, and programs to help you create this passive income. What I’m aiming to do is give you some pointers on what you need BEFORE you start thinking about creating passive income, so read on.
First, you need someone to sell your product to, and they won’t appear overnight. An audience must be cultivated over time through communication, value, and interaction. They need to “know, like, and trust” what you have to say. Your audience can help you develop your idea (the next step), and they’ll be the first people who will want to buy whatever you’re selling, once it’s time to launch.
What is your product? What will you be selling that will solve a critical problem for your audience? You can come up with some ideas using the marketing guide above, but then you’ll want to validate those ideas – there’s nothing worse than investing 50+ hours creating a digital course that no one is interested in.
How can you validate these ideas? Write some blog posts and content that focus on your ideas and see which ones get the most traffic and engagement. Create free downloadable content and see how it performs – how many people sign up to receive it? Post polls in Facebook groups you’re in. Interview your current audience and ask them questions – first focusing on what their main problems are, what a dream solution would look like, and how much they’d be willing to pay for it.
Finally, you need to create the time and space for actually creating your product. And time equals money, therefore you must anticipate how much time you’ll need and how you will fund that time… if you’re in business for yourself, where is your revenue coming from during the development phase? Or are you keeping your full-time job while you develop your product on the nights and weekends?
Basically, passive income takes time to create – from conceptualization to development and launch. You need money during that time. Don’t launch your business and immediately focus on passive income, unless you’re OK using your savings for a while.
Even the most successful passive income gurus started by taking clients and consulting… and this actually achieves many things, because by working with clients you are able to develop an audience, an idea, and time (money) all at the same time.
Ramp Up Your Business, Ramp Up for Passive Income
An audience, an idea, and time. That’s what it takes to get started with passive income – and having a plan for establishing each will put you far ahead of the competition.
The first step is ramping up your business – getting a routine marketing strategy down, doing the research, and having the time and money to devote to the development of your product.
It’s absolutely possible to create passive income, and many people are successfully doing it. How quickly you get there, how easy it is for you, and how successful you are depends on the actions you take to ramp up and prepare for developing your product.