Podcast Ep 136 | How Passive Is Passive? The Reality Behind Online Passive Revenue Streams
How Passive Is Passive? The Reality Behind Online Passive Revenue Streams
Let's talk about passive income, what it even means, what it looks like, how you can perhaps consider this as part of your business model and some of the realities behind the scenes of passive income as well. Because I think it's out there in the world as this golden solution to making mega bucks. But there are some realities that come with passive income streams that I wanted to touch on today - just so that you've got the right expectations around it, but also to see that it is absolutely possible for you and something that you can consider as part of your revenue model within your business. Let's get started and first talk about what passive income actually is...
Essentially passive income is referring to income or revenue that you generate for yourself or your business that doesn't necessarily require you to be present to make that income. It's essentially generating income and revenue while you're off doing other things, going about your life, going about other things in your business and it's ticking away in the background for you. And hence that's where the "passive" word comes from because you're not actively having to go and do things to make that income over and over and over again. It's an ideal way to be considering making money for yourself and one where it's really linked to that 'work smarter and not harder' mentality, where you don't necessarily need to be trading your time for money. You don't necessarily need to be present to make the money and it can be a really great way to generate income for your business.
Some of the examples of what passive income can look like if you have absolutely no idea what that looks like, what this term even means or you're just starting to come across the passive income world. Some really common and traditional examples of this are investments. That might be things like investment properties, purchasing real estate, purchasing stocks or shares, investing in businesses and just being like a shareholder or a stakeholder in a business - but you're not actually doing any of the work, you might just be more of an advisor or like an investor that's contributing to the cashflow. And basically these are examples of where you can be going about your day, working in your job, working in your business, hanging out with your family, whatever it might be. And these investments are bringing in dividends or bringing in potential income and I guess assets that you now have within your portfolio.
In the example of a house or an investment property, it might be bringing in rental income for you that's paying off the mortgage or it's essentially creating an asset that's building in wealth over time, so that when you're ready to sell that property, you're most likely going to make a profit from that investment. Those are some really traditional ways of passive income. Having those as part of your portfolio. As the internet has grown over time, as the capabilities and the software systems and supports that are available online have enhanced, passive income has also become something that we've been able to access via the internet and leveraging ourselves via the internet and what it can offer us. Some examples of how this has been playing out specifically over the last 10 years is with digital products and digital services. So perfect example that has grown significantly over the last 10 years is online e-commerce.
Many traditionally retail stores or brick and mortar stores...most of them will now have an online shop component where you can actually purchase from them online. You can set up your shipping and you can get these products delivered to your door without even having to leave your house. And in a sense from the business owner's perspective, they're potentially making sales while they're sleeping - so they can wake up in the morning and their online business has made money for them while they haven't been at the shop or at the store in person. In terms of services, this has also been something that's been increasing over time where we're now able to almost host our services in an online capacity. We've seen things like Skype and Zoom and different types of software that are allowing us to do video calls, video conferencing, really starting to connect with clients and customers around the globe and not necessarily being confined to only seeing people who are in our local vicinity.
You might have seen examples of digital products or services in the form of eBooks, online courses, online programs like group coaching or group support programs, maybe even professionals that are offering their services in a one-on-one capacity or consulting capacity online. You don't actually have to meet with them in person. And even so far as things like digital products on Etsy where people are selling things like digital prints or digital templates or website templates, things like that, that can essentially be delivered and downloaded and take place essentially via the internet. It's becoming more of a passive revenue stream because the person that's conducting that service or selling that product doesn't actually have to be present 100% of the time for it to take place. A lot of it can be humming along in the background and making sales for them and bringing in more clients and more customers with less work.
This is obviously why this sense of passive income is so attractive because it essentially means you can have a bigger impact and a bigger income. You can have more time for the things that you love to do in your business and your life, without necessarily having to work harder. Online automated products and services really do allow you to adopt that one to many model where you're able to provide one service to a number of different people at the same time, and it really frees up your time compared to one on one in-person type consultations or appointments where you're having to spend an hour or more with one person alone rather than being able to deliver that same service or that same information in perhaps an online digital format that can reach multiple people at the same time.
Realities of Passive Revenue Streams
I just want to talk a little bit about some of the realities of passive income and just I guess clear the air around the expectations of it because I think that it can be portrayed online as something that it's not and people can get sucked into this passive income cloud and realize that perhaps it's not exactly what they thought it was going to be or it's not exactly what they expected. I thought it would be helpful just to talk to some of the realities around this and then I'm going to go into some of the benefits as well.
1. Short Term Effort for Long Term Gain One of the biggest realities of passive income, and I'm talking specifically now in terms of online passive revenue streams, I'm not really talking about investment properties and investing in businesses and shares and things like that. I'm talking specifically about running your products or your services in an online capacity. The biggest reality of this is that there's essentially short term pain for long term gain. So any passive revenue stream that you're setting up, whether that is like an online course, an online program, an ebook, a membership, even if it is just online consultations, there's an element of work that needs to go into that to get it set up. Now, some things are easier than others. That is granted. You know, if you're doing online Zoom calls, that's relatively simple to get set up and there's not a lot of groundwork that really needs to happen with that. But with eBooks, courses, programs, there is an element of upfront work. You need to be able to set up the systems, set up the content, set up the automations and get it all running and humming along so that it is something that can be set up and run in the background for you. It's not going to set itself up for you. You can invest in people that can help you to set up all of those things. But there is a reality of upfront work. But the benefit of this is that once it's all set up, you just rinse and repeat. You don't have to keep creating it. You don't have to be on that content hamster wheel. You don't have to repeat the same things over and over and over again to different people because you've already created it and you're then able to scale it and distribute it to more and more people over time. This is where the profit and the passive income really comes in. Once you've created it the first time, it might not be as profitable, there's time that you're going to need to invest into getting everything set up and potentially energy and money as well. But once it's all done and dusted, you just gave rinsing and repeating and you can continue to sell it and bring in clients for that service or that product on autopilot. And that's when you're gonna start to see the profit and the passive income coming through.
2. Passive income is not entirely passive. Even though you are able to set things up and automate them and systematize them so that there's much, much less work involved for you, over time there is going to still be an element where you need to show up for your business. It's not so much that you just set it and forget it. If you are running a business, especially a health and wellbeing business where you are the brand, then there's an element that you still need to show up in your business. You're going to need to be on social media. You're going to need to be creating valuable content for your audience. You might need to show up within your online program for Q&A calls or any personalized or individualized support that you're offering. You're going to need to be potentially answering emails or showing up on your Facebook group or whatever avenues that you have. Maybe a podcast or a blog. There is still an element where you need to show up in your business, but the benefit of having a passive automated income stream is that once that's all set up, it frees you up to actually spend the rest of the time in your business on the things that are going to generate the most growth, the most impact, and the most income for you. Instead of feeling like you're tinkering away on low level tasks or you're stuck spending all of your time in person with clients, you're actually going to have your time freed up to be showing up on social media, to be writing really awesome blog content or email content or podcast episodes, and you're also going to have more energy to be able to show up at all for the clients that you have in your programs or in your course or however it is that you're running your passive revenue stream, and really be able to provide a better service because you're not feeling as overwhelmed and is stressed and is burnt out.
3. They need to be based on proven systems, supports and software programs. There is an element of planning that needs to go into this and you can't just slap a course up on the internet and expect it to sell thousands and thousands of dollars for you - without any sense of attracting an audience, any sense of forming relationships with potential clients, any sense of getting your name out there and positioning yourself as a person that can be trusted. There is an element of having to have a plan and a system in place behind the scenes that really supports your client journey and encourages people that come across you in your business to get to know you, get to know your brand, get to know what you're all about and then want to be able to participate in whatever online revenue stream it is that you have within your business. One of the easiest ways to be able to make sure you're following a system and a proven path is investing in your own support, your own coach, your own mentor, your own consultant in business that can really assist you to get all of the wheels in motion and set this whole online business ecosystem up in a way that's actually going to attract and convert clients for you. And it's not going to feel that you put all of this effort in, you've got something up and running and then it's just crickets. So I'll talk about that a bit more later because that's obviously something that I support people with. But if it's not me, I do recommend investing in some kind of support with some kind of coach or mentor who is trusted within this space and has demonstrated that they're able to get the results and get all of this set up in a way that's actually going to make you a passive income.
4. Considering price when it comes to passive income. So there are many people that offer quite low level passive income products or services in the form of like $97 online courses or $27 eBooks or mini programs or $97 strategy calls or anything like that. That is quite a lower level investment. Now the only thing to consider with this is if you are looking to generate more of a passive income over time and be able to support yourself and your lifestyle, then the price is obviously going to come into that because if you are selling a lower level product or service, say for $97 that generally means you going to have to bring in more clients to reach your income and your revenue goals. You are going to need to sell more product or more services to get to the revenue that you're looking to get to. That's just a consideration as well. And if you are just starting out, if you don't have a big audience or you don't really have a lot of marketing expertise to be bringing in a consistent flow of potential clients, I would be recommending considering a more premium option and more premium service where you can bulk up the value, you can make it more premium or high touch, more supportive. And essentially you need less clients to hit your revenue goals because you're charging a more premium price. That's just something to think about as well. Some people think, “Oh, I'll just create a $27 ebook, slap it up on the internet and I'm going to be a millionaire.” But they don't really think about all of the effort that needs to take place to actually get eyes on that ebook, get people to buy it, and then how many $27 eBooks they actually have to sell to reach their revenue goals. That's just something to consider as well. And why I'm more of a proponent of considering more premium, supportive, high touch options for your clients. And often that is the kind of support that they actually want and need.
5. Revenue is not profit. A lot of the time online and especially in the last few years, we've seen a lot of business owners becoming a lot more transparent about their income and the revenue for the month or the year. We see a lot of six figure goals thrown around, five figure months, seven figure business owners. And - I have done that myself because it is true and it is a big part of my credibility that I have built and run a seven figure skincare brand and that I have an understanding of what it takes to reach those kinds of revenue goals with quiet low valued products as well. It's not like we were selling $300 skincare. So there is an element of credibility that comes in for me around that, but at the same time it's not a big part of my brand and my messaging because I don't think that's necessarily what defines my trust and my credibility on the whole. I think that I bring a lot to the table in terms of my previous counseling experience, my empathy, my understanding, my patients. So there are many other things that come into play above income, and that's why I don't really shout that from the rooftops as much. But you probably have come across a number of ads or professionals out in the world that are really pushing these kinds of numbers publicly.So something that I just want to remind you of is that revenue doesn't equal profit. Now what I mean by that is revenue is the total amount of money that someone's bringing into their business that they're making. So let's say that is $10,000 for the month. So their revenue is $10,000. But that doesn't mean that they have made $10,000 in the bank as pure profit. If they are leveraging automations and services, they might take home quite a big chunk of that. But a lot of the time there are overheads, there are softwares that they need to pay for. There are expenses that come with the business. Maybe it's things like stationery or hiring their own coaches, hiring their own mentors. There are expenses that every single business has and that is going to be taken out of that $10,000 so it could be that their profit for that month is actually more like $2,000 or $5,000 depending on how they're set up their business. I just want to make that clear because sometimes it can sound really attractive to be inspired by these numbers or maybe even uninspired. Maybe it actually makes you feel really crappy about yourself and you're kind of comparing yourself to these numbers and these people. And I just want you to understand that the revenue isn't always the reality. Just be mindful of that and that this is also something to consider within your own business. That if you're pricing your services and your products, you just need to be mindful that the money that you make is not pure profit and you need to be taking into account the expenses that you have within your business, the expenses that you have within your lifestyle, what does it actually cost you to live? And to support yourself and your family and how much you need to be bringing into your business to cover those expenses and also to be able to take home a wage or a profit for yourself or your family.6. You Need To Establish Trust - Then finally on top of that one as well, I just wanted to note that the internet isn't really regulated so a lot of people can go out there and create passive income streams via leveraging the internet and it's really up to you to be doing your research. To be understanding who are the people that you can trust, who are the people that you can see are actually genuine in their approach and able to get results just to make sure that you're investing in. That people that are not scamming you and not making up things to make themselves look more credible when it's not really the reality. And on the other side of the coin, it's something that you need to be considering yourself as well. With the internet, the biggest thing that you need to get across is trust. You need your audience and your potential clients to trust you. In a sea of people that are out there on the internet, they need to be able to trust you over other people, so you always need to be thinking in your copy, in your messaging, in the services and the products that you're selling and the content that you're producing. 'How Is this demonstrating trust? How am I forming relationships and being able to ensure that what I'm putting out in the world is trustworthy, that I'm positioning myself as an expert in my niche and my space, my audience and my potential clients can believe in me and the work that I do and believe in the ability for me to help them achieve their goals?'
Benefits of Passive Revenue Streams
Now that I've talked about the realities of passive income, I want to bring it back to the benefits of passive income because while I've talked about some of those realities...they're not all 100% positive or maybe they've just got you thinking a little bit more deeply about this whole passive income online revenue stream side of things. There are still so many benefits that come with having this set up as part of your business model and really making sure that you're leveraging systems and supports, especially through online softwares and things like that to help you to work smarter and not harder in your business. This has been a game changer for me and my businesses and has really allowed us to work less to step back from feeling like that employee in your own business, feeling like you're doing everything, wearing all the hats all the hours and has allowed us to really leverage and lean on other systems and other supports to do a lot of the heavy work for us.
Uncapped Income & Impact Potential - The biggest benefit of passive income streams, online services and products is the ability to scale your income and your impact. This is especially the case with service based businesses where you are able to reach more people with less time. You can be running things like online trainings or online group programs where you are able to have a number of people join you in that training or that program, and deliver the same material to a number of different people rather than having to meet with each person one-on-one and repeat and regurgitate the same information to each person. This is why so many people are moving into this space, especially in the health and wellbeing field because people are starting to make their health decisions online. People are starting to search for health professionals on social media. I know that I've done this myself. I've looked for Naturopaths and things like that purely via Instagram. And the more that I can resonate with that person and what kind of content they're putting out there and their ability to solve my concerns or get me the results that I'm after, the more likely I am to work with them. So this is a shift that is happening and if you're working in a traditional role, whether it's health and wellbeing or a different business industry, I would really encourage you to start thinking about your online presence and your online strategy because it's only gonna become more and more of a thing as the years go on. You don't want to be the last one to the party in terms of having an online revenue stream and online way to support your clients. So that's something to think about as well.
Don't need to be present to make money - Like I have mentioned, there's obviously an element that you do need to show up for and you do need to serve your clients and do the groundwork to get everything set up. But essentially you can be making money while you're asleep, while you're out at brunch with the girls, while you're down at the park with your kids - if you set up the right automations and the right systems and supports to have this working behind the scenes, like a well oiled machine.
Help More People Globally -The other thing, and this is one that I really love as a health and wellbeing professional, is that you've got the ability to support people who couldn't normally access you in person or locally. You can reach people around the globe with your services and have a bigger impact than you would by working in a local clinic or in more of like a brick and mortar set up. I think that it really opens up the doors for people to be able to access health and wellbeing, support any kind of support depending on your industry, to really be able to make a difference in their own lives and invest in themselves when they might not have been able to do so. If you weren't available on the internet, if you weren't available and accessible to them unless they lived within like a 10 kilometer radius of your clinic, the fact that it is scalable for your income and your impact as well also means that you're able to work smarter and not harder.
4. You're able to leverage your time, your energy, your money - and set things up to work for you to work to your advantage so that you don't have to be doing the same things with a number of different clients, saying the same things with a number of different clients, packing your day full of one on one appointments and feeling like the only way to make more money is to see more clients work more hours and work harder. This is really a great way of avoiding that burnout and that overwhelm that can come with creating your own business and the pressure to provide and the pressure to bring in more and more clients. Being able to access and support clients online, globally and in an automated, systemised way is going to free up your own time, your own pressure, and allow you to focus more in on the things that really matter to you inside your business and outside of your business and rolling off from that. It gives you more time to spend in other areas of your business in life so you have more time to be able to spend on business growth tasks, on creating content that really resonates with your audience on being able to spend time with your family perhaps or being able to kind of split your time between being a parent and being a business owner. Most of the things that you can do with an online revenue stream only require a laptop or a computer, so the overheads are very low in that respect and the only things you're really going to need to be investing in our software systems and automation supports and then also potentially a coach or a mentor that's guiding you through as well. It also opens the door for things like traveling. Like I said, if you're able to do the bulk of your work from a laptop, you really just need to have that and an internet connection and you can still be delivering your services, checking in with clients, posting content and things like that while you're in a completely different country because it doesn't rely on having to see you face to face in person.By this point you might be thinking, how do I actually create a passive income stream, an automated online revenue stream for my business and what does this actually look like in practice? I have spoken about some of the options in terms of things like eBooks, digital products, online programs, online courses, memberships, online consulting. There are a number of different ways that this can look and it will really depend on what you feel works best for you, what's within your capabilities, and also what's in the best interest of your clients. How do they like to receive information? How do they like to access support and so on and so forth. But the best way that I recommend creating an online revenue stream is through an online signature program. This is basically an online program that I recommend runs as an intimate group program - so you have a small number of clients that join you in this program and you provide more high touch premium support and community for this group to basically overcome a specific problem and achieve a specific result. There is an online course training element that can come as part of that and then there's more of that high touch personalized support that can come through group coaching or group Q&A or dropping in and doing lives for your client group and being more present and supporting them with implementation.
One of the biggest things that I hear from people that invest in online courses is there's a huge lack of access to the trainer and when you're doing any new training or implementing any new things in your business, there's going to be questions that naturally come up and if you don't have any access to the trainer, it is really hard to get traction and implement some of the things, if you're not really sure what the right way to go about it is. That's why I always recommend having that personalized high premium access to the trainer, which would essentially be you and also an element of community where there's also an opportunity for your clients to connect with other like-minded people. And so that's kind of what can encompass as signature program. There's obviously a lot more that comes into it. But just to give you a bit of an overview, and that is why I essentially help people to set this up in their business. Because this is essentially what can become the core of your online business model. It allows you to stand out in a niche, it allows you to stand out as an expert in your space and it really allows you to speak to that one specific type of client.
If I was to go back to my counseling right now and start up like a new counseling business, a new counseling clinic, I would actually be doing no in-person counseling. I wouldn't have a clinic. I wouldn't go and drop into any like wellness clinics or multidisciplinary clinics and do in-person counseling and I probably wouldn't only focus on one-on-one counseling either. I would go and pick one niche problem that I specialize in supporting people with (this could be something like reducing alcohol intake, pregnancy anxiety or maybe business stress) and I would set up an online group therapy program and community and then I'd have an option to also add private counseling as well for anybody who felt they needed that extra personalized support.
I would be doing my counseling business in this way to create a passive online program that can reach more paying clients with less work for me because I'm not having to sit with every individual client, but I'm able to reach them all. I'm able to provide them with some general support and information to support them with whatever it is that I'm focusing on in my program. And then I'm also giving them group therapy support and perhaps also that individualized support as well, depending on what they're after.This is exactly why I teach women in health and wellbeing businesses to set up their own signature program and really create this more automated scalable revenue stream. Because I really believe that this is one of the easiest ways to establish that elusive work life balance and have a bigger impact and a bigger income without actually having to sacrifice your wellbeing, your relationships, or your life goals in the pursuit of your business. And this is the exact premise and the exact message behind Wellbeing Weekly, and the whole reason that I started it was to help people have that work life balance to create a business and life that worked together.
One of the easiest ways to do that is to consider more passive automated, systemised, supportive revenue models. And the way that I really think that that is the most beneficial for you but for also your clients is through an online unique signature program. Wealthy Wellpreneurs is opening up again at the start of the new year and that is exactly what I support you to do. I help you to create and sell your own online at signature program.But if you want to get all of the details when it's actually time, then I recommend getting my free Productivity Plan which covers seven quick wins to double your productivity in half the time and what that will do is get you the guide but it will also get you onto my email list when I'll be updating everybody about my next round of the group program. Or you can also join my free Wellpreneur Women Facebook group I've got over 430 women in the health and wellbeing space in there and I'm dropping tips and support in there regularly, but I'll also be updating everybody with information when Wealthy Wellpreneurs is looking to open up again in the new year.
Otherwise you can come and follow me on Instagram @wellbeingweekly where I'm always sharing information and resources and support and we'll also be letting you know about any content and trainings that I have coming up and obviously also when the program is opening up again and how you can join me. I hope that that's given you a little bit of an overview of passive income. If you were wondering what it's all about, what it actually looks like and how it might look for you and your business.I think that is something that every business you consider most multi-millionaires have over seven streams of income coming their way. And I'm telling you now, many of them are passive revenue streams. They might have automations and online supports and systems that are generating them an income and then they might have more in-person things that they're working on. And then as you obviously get richer and richer, you can also look to invest in other business projects. But many millionaires that are out there at the moment are taking advantage of this online space and opportunity and looking at how they can leverage their knowledge and their skills in the online space to reach more people with less work.