SmallBizLady: What exactly is passive revenue?
Erin Blaskie: Passive revenue is loosely defined as income that you earn inside of your business that you aren’t trading time for money for. This means that you can generate the revenue while you sleep, while you are on vacation or while you are working on other income generating projects.
SmallBizLady: How can earning passive revenue affect a small business?
Erin Blaskie: Passive revenue allows you to create one-to-many opportunities. What this means is that instead of answering questions or providing solutions on a per person basis, you can reach more people using the same amount of effort. There is only one of you but many, many customers so you need to leverage that.
SmallBizLady: What is one of the biggest myths surrounding passive revenue?
Erin Blaskie: The big myth that I need to dispel is that passive revenue does NOT mean that it is income you don’t have to work for. The difference between passive revenue and regular revenue is that you only need to setup a passive revenue stream once and you can benefit from it for a long time to come. Usually, passive revenue streams are also streams in which you can earn on-going, recurring revenue.
SmallBizLady: What are the most common passive revenue streams?
Erin Blaskie: The most common passive revenue streams include things like information products (e-books, audio programs, e-courses, etc.), affiliate programs (referring other people’s businesses / services / products for commission), online training, group coaching programs which are turned into self-study programs afterward, membership programs, virtual events (teleseminars) and service-based income (sub-contracting, private labeling, etc.)
SmallBizLady: How do you know when your business is ready for passive revenue streams?
Erin Blaskie: Everyone is ready to implement passive revenue. Every single entrepreneur can and will benefit from setting up multiple streams of income. You don’t need to have lengthy education or special knowledge of the industry. You simply need to know how to solve your customer’s problems. You simply need to be able to provide real solutions in real time.
SmallBizLady: How can someone get started with generating multiple streams of income?
Erin Blaskie: The easiest form of passive revenue to start with is the information product. Information products are e-books, audio programs, e-courses, online training, etc. Any product that you are setting up that is delivering information to your target audience is an information product.
SmallBizLady: What is the one common element in the information product creation process?
Erin Blaskie: The end product may be different, ie: e-book, audio program, etc., but the process to get there always starts with the same piece of information: the idea. You simply need to have an idea and that idea is going to come from one of your customer’s problems. You need to ask yourself, “What does my client struggle with and how can I help?” as it is in that, “How can I help?” part that you will find the idea for your information products.
SmallBizLady: How can a small business owner implement passive revenue into a marketing plan?
Erin Blaskie: Small business owners need to evaluate their existing marketing funnel and see where they have opportunity to provide alternative, monetized resources. For example, if the primary service is coaching and people can generally only consume your services in that way, consider creating an e-book that walks people through your coaching process but in a way that allows them to do it themselves and on their own time.
Erin Blaskie: Small business owners also need to move into a one-to-many format of giving information to their audience. For example, if a small business owner is responding to e-mails on a one-to-one basis, they may instead want to add that answer to their blog in the form of a post. To monetize it, a relevant banner ad could be placed between the post and the comments to encourage clicks.
SmallBizLady: What format should I use for my information products?
Erin Blaskie: One of the early business lessons I learned is that not everyone wants to consume information in the same way. Some people are auditory learners where others are visual. Some people like to learn on their own whereas some people prefer the group format. The key to creating a successful business is to tap into each of your customer’s learning styles.
SmallBizLady: What are some low cost tools that can be use to create info products?
Erin Blaskie: There are many, many excellent tools that allow you to create info products but let me just focus on one for now. I always recommend that our clients subscribe to Audio Acrobat so that they can easily record and publish a paid podcast or paid audio recordings. You can also record bridge line recordings using the tool, which is a fantastic way to monetize a teleseminar after it is over. People can also use Audio Acrobat to record an audio, have it transcribed and turn that into an e-book.
SmallBizLady: What are some other forms of passive revenue?
Erin Blaskie: Other than information products (e-books, audio programs, e-courses, etc.), the other passive revenue streams include: affiliate programs (referring other people’s businesses / services / products for commission), online training, group coaching programs which are turned into self-study programs afterward, membership programs, virtual events (teleseminars) and service-based income (sub-contracting, private labeling, etc.)
SmallBizLady: What is the one thing you wish you knew about creating passive revenue before you got started?
Erin Blaskie: I wish I knew just how easy it was to start setting up multiple streams of revenue for my business. It would have generated me more business income much more quickly. A lot of people develop fear over adding passive revenue because the process of doing so seems difficult or above a particular skill level but that isn’t true. Anyone can implement passive revenue streams if they have a plan and some ideas on what to offer.
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Melinda F. Emerson, known to many as SmallBizLady is one of America’s leading small business experts. As a seasoned entrepreneur, professional speaker, and small business coach, she develops audio, video and written content to fulfill her mission to end small business failure. As CEO of MFE Consulting LLC, Melinda educates entrepreneurs and Fortune 500 companies on subjects including small business start-up, business development and social media marketing. Forbes Magazine recently named her one of the Top 20 women for entrepreneurs to follow on Twitter. She hosts #SmallBizChat Wednesdays on Twitter 8-9pm ET for emerging entrepreneurs. She also publishes a resource blog www.succeedasyourownboss.com Melinda is also the author of the national bestseller Become Your Own Boss in 12 months; A Month-by-Month Guide to a Business That Works. (Adams Media 2010)